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Which of the following is NOT one of the three basic questions every economic system should answer?
Which of the following is NOT one of the three basic questions every economic system should answer?
What is the primary effect of licensing on lobster fishing in Canada?
What is the primary effect of licensing on lobster fishing in Canada?
How does interdependence manifest in everyday product usage?
How does interdependence manifest in everyday product usage?
Which economic resource is most likely scarce in Hong Kong?
Which economic resource is most likely scarce in Hong Kong?
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What happens to lobsters that are harvested in Canada under the licensing system?
What happens to lobsters that are harvested in Canada under the licensing system?
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Which of the following correctly categorizes economic resources?
Which of the following correctly categorizes economic resources?
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What type of economic resource is a factory considered to be?
What type of economic resource is a factory considered to be?
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How does interdependence manifest in the economy?
How does interdependence manifest in the economy?
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What is an example of a natural resource used in chocolate production?
What is an example of a natural resource used in chocolate production?
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Which question is NOT typically asked by every economic system?
Which question is NOT typically asked by every economic system?
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Which of the following is an example of a human resource?
Which of the following is an example of a human resource?
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What role do shipping companies play in the economic interdependence of chocolate makers?
What role do shipping companies play in the economic interdependence of chocolate makers?
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Which is NOT considered a capital resource in the production of goods?
Which is NOT considered a capital resource in the production of goods?
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What defines the trough phase of the business cycle?
What defines the trough phase of the business cycle?
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Which type of economic indicator adjusts before the economy experiences a change?
Which type of economic indicator adjusts before the economy experiences a change?
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During which phase of the business cycle does the economy contract after reaching its highest point?
During which phase of the business cycle does the economy contract after reaching its highest point?
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Which of the following is NOT a recognized cause of economic cycles?
Which of the following is NOT a recognized cause of economic cycles?
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An example of a lagging economic indicator is:
An example of a lagging economic indicator is:
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What characterizes the recession stage of the business cycle?
What characterizes the recession stage of the business cycle?
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Which stage of the business cycle indicates when the economy stops expanding?
Which stage of the business cycle indicates when the economy stops expanding?
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What typically happens during the trough stage of the business cycle?
What typically happens during the trough stage of the business cycle?
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What was one significant factor that contributed to the Great Depression?
What was one significant factor that contributed to the Great Depression?
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How did the Great Depression primarily affect the banking system?
How did the Great Depression primarily affect the banking system?
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What effect did the Great Depression have on unemployment levels in the U.S.?
What effect did the Great Depression have on unemployment levels in the U.S.?
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What are key economic indicators typically monitored during a recession?
What are key economic indicators typically monitored during a recession?
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What is one of the outcomes expected from learning about the business cycle?
What is one of the outcomes expected from learning about the business cycle?
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What happens during the expansion phase of the business cycle?
What happens during the expansion phase of the business cycle?
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Which of the following is a characteristic of a trough in the business cycle?
Which of the following is a characteristic of a trough in the business cycle?
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What do leading economic indicators do?
What do leading economic indicators do?
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Which factor is NOT a recognized cause of economic cycles?
Which factor is NOT a recognized cause of economic cycles?
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During which phase of the business cycle does the economy reach its highest point?
During which phase of the business cycle does the economy reach its highest point?
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What marks the end of the recession phase in the business cycle?
What marks the end of the recession phase in the business cycle?
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Which stage of the business cycle is characterized by maximum economic activity?
Which stage of the business cycle is characterized by maximum economic activity?
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What are key economic indicators to monitor during a recession?
What are key economic indicators to monitor during a recession?
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Which event is commonly associated with the onset of the Great Depression?
Which event is commonly associated with the onset of the Great Depression?
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During which phase of the business cycle does the economy experience the lowest levels of production and employment?
During which phase of the business cycle does the economy experience the lowest levels of production and employment?
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What effect did the Great Depression have on savings and bank confidence in individuals?
What effect did the Great Depression have on savings and bank confidence in individuals?
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What main factors contribute to the contraction phase of the business cycle?
What main factors contribute to the contraction phase of the business cycle?
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What is a primary characteristic of the expansion phase in the business cycle?
What is a primary characteristic of the expansion phase in the business cycle?
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Study Notes
Economic Resources
- Economic resources are the means through which goods and services are available to consumers.
- Economic resources are also known as factors of production.
- Economic resources can be divided into three types: natural, human, and capital.
Natural Resources
- Natural resources come from the earth, water, and air.
- An example of a natural resource is a cocoa plant.
Human Resources
- Human resources are the people who create goods and services.
- Human resources are also known as labor.
- Examples of human resources include factory workers, construction workers, and farmers.
Capital Resources
- Capital resources last for a long time and are created by people.
- Examples of capital resources include factories, office buildings, trucks, and equipment.
Interdependence
- Our society and economy are interdependent.
- Interdependence means that we rely on other businesses and economies for survival, and vice versa.
- Chocolate companies are dependent on shipping companies, advertising companies, and cocoa farmers.
Economic Systems
- Every country has its own economic system.
- An economic system includes individuals, businesses, and the government to answer three key questions:
- What goods and services should be produced?
- For whom should these goods and services be produced?
- How should these goods and services be produced?
- The Canadian government controls lobster fisheries through regulation and licensing.
- Lobsters are sold to those who can afford them and are primarily exported.
- Anyone with a license can catch lobsters, and the process involves buying a boat, making traps, and fishing.
The Business Cycle
- The business cycle is a recurring pattern of economic expansion and contraction.
- The four stages of the business cycle are recession, trough, expansion, and peak.
- Recession: The economy slows down, consumer purchasing declines, unemployment increases, and businesses contract or close.
- Trough: The lowest point of the business cycle, where production and unemployment are at their lowest levels.
- Expansion: The economy begins to grow again, with increased employment, wages, production, and profits.
- Peak: The highest point of the business cycle, where economic growth reaches its maximum.
- The Great Depression, beginning in 1929, was a severe economic downturn caused by factors like over-speculation in the stock market, heavy reliance on debt, and banking panics.
- Economic Indicators: Measures used to track economic activity and predict future trends.
Types of Economic Indicators
- Leading Indicators: Adjust before economic changes, predicting future trends, like housing starts.
- Lagging Indicators: Adjust after economic changes, reflecting past activity, like the unemployment rate.
- Coincident Indicators: Move in conjunction with the business cycle, reflecting current economic activity, like international trade.
Causes of the Business Cycle
- Monetary Policy: Actions taken by central banks to manage interest rates and the money supply, influencing economic activity.
- Fiscal Policy: Government policies related to spending and taxation, impacting aggregate demand and economic output.
- Consumer Confidence: Consumer sentiment and willingness to spend, driving consumption and economic growth.
- Technological Advancement: Innovations and technological breakthroughs can stimulate economic growth and create new industries.
- Global Events: International events, like wars, trade tensions, or natural disasters, can impact economies worldwide.
- Market Speculation: Buying and selling of assets based on anticipated price movements, potentially driving market volatility.
- Demographic Changes: Shifts in population size, age structure, or migration patterns can influence economic activity and demand for goods and services.
The Business Cycle
- The Business Cycle refers to the recurring periods of increased and decreased economic activity, characterized by expansions and contractions
- There are four stages: Recession, Trough, Expansion, and Peak
Recession
- The economy slows down
- There is a decline in consumer purchasing, an increase in unemployment, and businesses contract or close
- Key economic indicators include exports and construction contracts.
Trough
- Production and unemployment reach their lowest levels
- The economy completes the recession and turns towards prosperity
- A sustained trough is known as a depression.
Expansion
- The economy begins to grow again
- Employment, wages, production, and profits expand
- Investment is strong
Peak
- The top of the business cycle
- The economy stops expanding and begins contracting
Economic Indicators
- Three types of economic indicators:
- Leading: Adjust before the economy experiences a change and predict future economic direction, such as housing starts.
- Lagging: Do not adjust until after the economy has experienced a change, like the unemployment rate.
- Coincident: Move in conjunction with the business cycle, such as international trade.
Causes of the Economic Cycle
- Monetary Policy: Interest rates and money supply play a role.
- Fiscal Policy: Government spending and taxation affect the cycle.
- Consumer Confidence: Consumer spending behaviors influence the economy.
- Technological Advancement: New technologies can drive expansions or contractions.
- Global Events: International events can impact national economies.
- Market Speculation: Speculative activities can influence economic fluctuations.
- Demographic Changes: Population growth and migration influence economic activity.
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Description
This quiz explores the various types of economic resources, including natural, human, and capital resources. It highlights the importance of interdependence in our economy and society. Test your knowledge of how these resources function and interact in the process of producing goods and services.
