Economics Basics Quiz

The study of how people make choices under scarcity, focusing on the production, distribution, and consumption of goods and services.

A system where individuals and firms make decisions about production and consumption based on market prices, with minimal government intervention.

A system where the government plays a significant role in allocating resources and regulating the economy.

The process of creating goods and services using resources like labor, capital, and land.

The total value of all goods and services produced in a country within a specific time period.

Economics is considered a science because it uses a systematic and objective approach to study human behavior related to the allocation of scarce resources. It employs scientific methods like observation, data analysis, and theory building to understand economic phenomena and develop solutions to economic problems.

Fiscal policy refers to the use of government spending and taxation to influence the economy. It aims to achieve macroeconomic objectives like stabilizing the economy, promoting growth, or reducing unemployment.

Demand refers to the quantity of a good or service that consumers are willing and able to buy at a given price and time. It is a relationship between the price of a product and the quantity demanded for that product.

Labor-intensive technology refers to production processes that heavily rely on human labor as the primary factor of production. It involves a high ratio of workers to machinery and capital.

Capital formation is the process of creating new capital goods, such as machinery, buildings, and infrastructure. It is essential for economic development by increasing productivity and output.