Economic agents and the circular flow of income

Name the three main economic agents and explain in one sentence what each one does. Give an example from your own life for each one (your family, a firm you know, a government service you use).

Identify the main economic agent in each scene — household, firm or State — and justify it: (a) a bakery bakes $200$ loaves a day; (b) the council tarmacs a street; (c) grandparents look after their grandchildren in the afternoons; (d) a hairdresser's charges $12\ \text{€}$ per haircut.

Explain the difference between a good and a service and classify: a haircut, a sandwich, a dental check-up, a video game, the maths support class and a hoodie. Add an example of each type that you (or your family) have 'bought' this week.

The diagram shows the circular flow of income between households and firms, but one of the streams is covered with a question mark.

1. a) The covered stream returns from firms to households carrying money: state what it is and where it comes from.
2. b) Explain why we talk about a 'circular' flow: trace with your finger the full journey of $100\ \text{€}$ from a worker's wage until it returns to a firm.

Aroa's mother is a teacher at a state secondary school. Describe the full circuit: what flow she gives, what flow she receives, where the money for her wage comes from (follow the taxes), and what flows her family generates when spending it at the local supermarket.

Match each tax with the public service it helps pay for and explain the chain: VAT (when buying), income tax (from wages), road tax (for the car). Choose one public service you use every week and describe which taxes sustain it.

Your school is a state school: nobody pays to study there, but it is not free. Explain who finances it, through which flows (where the money comes from and where it goes), and name two more public services that you use or will use, indicating the tax that supports them.

The council raises the waste collection charge by $20\ \text{€}$ a month and, in return, opens a new library with three employees. Trace the flows: what households lose, what the three employees' households gain, and what everyone gains as users. Analyse why some will pay more than they use and why it can still be considered fair.

You can do it on paper and send a photo with your answer.

In the circular flow, households offer their work to firms and receive an income in return. Name the three kinds of income a household can receive (wages, rent from premises, interest on a deposit) and give an example of each from your surroundings.

Explain what role banks play in the circular flow: where they get the money they lend and who they lend it to. Give an example from your neighbourhood of a project that exists thanks to a loan (a refurbished shop, a new workshop).

Mar's family spends $500\ \text{€}$ a month at the neighbourhood supermarket. Follow the money: name three destinations of those euros inside the shop (wages, suppliers, rent, taxes) and explain how part of it returns to other neighbourhood families, completing the circle. What percentage of each euro do you think stays in the municipality? Give reasons for your estimate.