Untitled Quiz

Introduction to Economics

• Economics is the study of how societies use limited resources to satisfy unlimited wants.
• Defined as the study of how societies manage scarce resources.

The Great Depression (1929-1939)

• Cause: Stock market crash, bank failures, reduced consumer spending.
• Impact: Global economic downturn, widespread mass unemployment, deflation, and the collapse of international trade.

The 1970s Oil Crisis (1973-1974)

• Cause: OPEC oil restrictions against Western countries.
• Impact: Rapid increase in oil prices, stagflation (high inflation and unemployment), and economic recessions.

The Asian Financial Crisis (1997-1998)

• Cause: Over-speculation in financial markets, collapse of currencies, high levels of foreign debt.
• Impact: Severe currency devaluation in Southeast Asia, collapse of financial markets, and recessions in affected countries (Thailand, Indonesia, South Korea, Malaysia).

The Russian Financial Crisis (1998)

• Cause: Drop in oil prices, excessive foreign debt, inability to control inflation.
• Impact: Russian government default, sharp ruble devaluation, and collapse of the domestic banking system.

The Argentine Economic Crisis (1998-2005)

• Cause: Currency devaluation against the US dollar, government and economic mismanagement, and high levels of government debt.
• Impact: Hyperinflation, widespread poverty, default on debt, and collapse of the banking system.

The Dot-com Bubble (1999-2001)

• Cause: Overvaluation of technology companies and speculative investments in internet startups.
• Impact: Stock market crash, significant wealth loss, and bankruptcy of many dot-com companies.

The Global Financial Crisis (2007-2008)

• Cause: Subprime lending crisis, excessive risk-taking by banks, and the collapse of Lehman Brothers.
• Impact: Global recession, massive job losses, government bailouts, collapse of housing markets, and tightening credit markets.

The European Debt Crisis (2010-2012)

• Cause: Excessive government debt in Eurozone countries (Greece, Portugal, Ireland, Spain, Italy), mismanagement of fiscal policies.
• Impact: Bailouts from the EU and IMF, austerity measures, political instability, high unemployment, and weakening of the Euro.

The Greek Debt Crisis (2009-2018)

• Cause: High government spending, tax evasion, and large public debt.
• Impact: Severe austerity measures, bailouts from the EU and IMF, public protests, and a prolonged recession.

The COVID-19 Economic Crisis (2020-2021)

• Cause: Global pandemic, lockdowns, disruption of global supply chains, and decline in consumer demand.
• Impact: Global recession, mass unemployment, business closures, economic stimulus packages, and a rise in government debt.

Sri Lankan Economic Crisis (2022)

• Cause: Foreign exchange crisis, high foreign debt, inflation, and political instability.
• Impact: Food shortages, power outages, fuel shortages, widespread protests, and mass migration.

Pakistan's Economic Crisis (2023)

• Cause: High public debt, foreign exchange crisis, inflation, and political instability.
• Impact: Currency devaluation, inflation, rising import costs, and loss of purchasing power.

Scarcity

• Scarcity is the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources.

Branches of Economics:

• Development Economics
• International Trade
• Monetary Economics
• Mathematical Economics
• Financial Economics
• Environmental Economics
• Issues in Pakistan Economy
• Institutional Economics
• Public Economics
• Statistical Method in Economics
• Econometrics

Additional Concepts

• Opportunity Cost: The value of the next best alternative that is forgone when a choice is made.
• Demand: The willingness and ability of consumers to purchase a good or service at a specific price and time.
• Supply: The total amount of a specific good or service available to consumers at a specific price and time.
• Market Equilibrium: The point where the supply and demand for a good or service are equal.
• Law of Diminishing Marginal Utility: The satisfaction or utility derived from a good or service decreases as the quantity consumed increases, all things being held constant.