CH SUM : Macro Economics
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Questions and Answers

What is the main reason for the economic problem?

  • Limited resources (correct)
  • Unlimited wants and needs
  • Lack of technology
  • High prices of goods and services

    • What is the primary focus of microeconomics?

  • The impact of government policies on the economy
  • The distribution of goods and services among countries
  • The overall functioning of an economy
  • The decisions of individuals and firms (correct)

    • What is the core challenge in economics?

  • Scarcity (correct)
  • Poverty
  • Unemployment
  • Inflation

    • What is one of the primary economic questions?

    <p>What to produce?</p> Signup and view all the answers

    What branch of economics studies the overall functioning of an economy?

    <p>Macroeconomics</p> Signup and view all the answers

    What is the fundamental economic problem?

    <p>How to allocate limited resources to satisfy unlimited wants and needs</p> Signup and view all the answers

    What is the main reason for the difference between human wants and available resources?

    <p>Human wants are limitless, yet resources are limited</p> Signup and view all the answers

    What is one of the economic decisions that individuals, governments, and societies must make?

    <p>Balancing the fulfillment of diverse needs against available financial capacities</p> Signup and view all the answers

    What is the focus of International Economics?

    <p>International trade and finance</p> Signup and view all the answers

    What is the primary challenge in economic research?

    <p>Human behavior and unpredictability</p> Signup and view all the answers

    What is the main purpose of economic models?

    <p>To understand and predict economic interactions and outcomes</p> Signup and view all the answers

    What is the definition of opportunity cost?

    <p>The benefit of the next best alternative</p> Signup and view all the answers

    What is the primary function of entrepreneurship in the economy?

    <p>To combine the factors of production to create goods and services</p> Signup and view all the answers

    What is the difference between absolute and relative scarcity?

    <p>Absolute scarcity is when resources are insufficient, while relative scarcity is when resources are sufficient but inaccessible</p> Signup and view all the answers

    What sector of the economy involves the extraction of natural resources?

    <p>Primary Sector</p> Signup and view all the answers

    What is the term for goods that are consumed immediately or shortly after purchase?

    <p>Non-durable Goods</p> Signup and view all the answers

    What is the focus of Developmental Economics?

    <p>Policies promoting economic development in less developed countries</p> Signup and view all the answers

    What is the difference between positive and normative economics?

    <p>Positive economics is value-neutral, while normative economics involves value judgments</p> Signup and view all the answers

    What is the portion of income available for spending or saving after taxes?

    <p>Disposable Income</p> Signup and view all the answers

    What is the main goal of sustainable economic development?

    <p>To promote economic growth without harming the environment or human health</p> Signup and view all the answers

    What is the main approach to research in economics?

    <p>A systematic approach using both deductive and inductive reasoning</p> Signup and view all the answers

    Which sector of the economy provides services rather than goods?

    <p>Tertiary Sector</p> Signup and view all the answers

    What is the term for registered businesses whose activities are measured in official statistics like GDP?

    <p>Formal Sector</p> Signup and view all the answers

    Who are the main consumers of goods and services in the economy?

    <p>Households</p> Signup and view all the answers

    What is the phase of the business cycle characterized by high economic activity and increasing employment?

    <p>Prosperity</p> Signup and view all the answers

    Which of the following is an exogenous reason for business cycles?

    <p>Natural disasters</p> Signup and view all the answers

    What is the total demand for goods and services in the economy?

    <p>Aggregate Demand</p> Signup and view all the answers

    What is the impact of business cycles on economically vulnerable populations?

    <p>They suffer the most during economic downturns</p> Signup and view all the answers

    What is the primary purpose of understanding business cycles?

    <p>To anticipate economic changes and implement measures to mitigate adverse effects</p> Signup and view all the answers

    What is the phase of the business cycle characterized by a gradual improvement in economic conditions?

    <p>Recovery</p> Signup and view all the answers

    What is the impact of business cycles on employment?

    <p>Job creation increases during booms</p> Signup and view all the answers

    Which of the following is an endogenous reason for business cycles?

    <p>Fluctuations in investment</p> Signup and view all the answers

    What is the primary function of financial institutions in the economy?

    <p>To facilitate savings and provide loans</p> Signup and view all the answers

    What is the main difference between the Goods Market and the Factor Market?

    <p>The Goods Market is for goods and services, while the Factor Market is for factors of production</p> Signup and view all the answers

    What is the formula for calculating GDP using the Expenditure Approach?

    <p>GDP = C + I + G + (X - M)</p> Signup and view all the answers

    What is the main limitation of GDP as a measure of economic activity?

    <p>It does not account for the distribution of income among the population</p> Signup and view all the answers

    What is the main difference between GDP and GNI?

    <p>GDP is a measure of domestic production, while GNI is a measure of national income</p> Signup and view all the answers

    What is the purpose of calculating per capita income?

    <p>To understand the economic well-being of the average citizen</p> Signup and view all the answers

    What is the main characteristic of a leading indicator in a business cycle?

    <p>It signals future economic changes before they occur</p> Signup and view all the answers

    What is the purpose of using economic indicators in business cycles?

    <p>To analyze changes in the business cycle</p> Signup and view all the answers

    What branch of economics deals with the economic activities of government and its role in the economy?

    <p>Public Sector Economics</p> Signup and view all the answers

    What is the primary goal of economic models?

    <p>To understand and predict economic phenomena</p> Signup and view all the answers

    What type of scarcity occurs when resources are insufficient to produce a good despite its availability?

    <p>Absolute Scarcity</p> Signup and view all the answers

    What is the approach to research in economics that involves value judgments and subjective perspectives?

    <p>Normative Economics</p> Signup and view all the answers

    What is the term for the foregone benefit of the next best alternative when a choice is made?

    <p>Opportunity Cost</p> Signup and view all the answers

    Which of the following is NOT a branch of economics?

    <p>Developmental Biology</p> Signup and view all the answers

    What is the primary challenge in economic research?

    <p>Dealing with human behaviors that are diverse and difficult to predict</p> Signup and view all the answers

    What type of goods are naturally available without cost?

    <p>Free Goods</p> Signup and view all the answers

    Which sector of the economy involves manufacturing and processing activities?

    <p>Secondary Sector</p> Signup and view all the answers

    What is the term for individuals who combine the other three factors of production to create goods and services?

    <p>Entrepreneur</p> Signup and view all the answers

    Which of the following is an example of a durable good?

    <p>Vehicle</p> Signup and view all the answers

    What is the term for the portion of income available for spending or saving after taxes?

    <p>Disposable Income</p> Signup and view all the answers

    Which sector of the economy provides services rather than goods?

    <p>Tertiary Sector</p> Signup and view all the answers

    What is the term for businesses owned by individuals or corporations?

    <p>Private Sector</p> Signup and view all the answers

    What is the main goal of sustainable economic development?

    <p>Economic growth without depleting natural resources or harming human and environmental health</p> Signup and view all the answers

    Which of the following is a key component of sustainable economic development?

    <p>Both A and B</p> Signup and view all the answers

    What is the phase of the business cycle characterized by decreasing economic growth, output, and employment?

    <p>Recession</p> Signup and view all the answers

    What are the external factors that influence the economy?

    <p>Natural disasters, political events, foreign trade dynamics, psychological factors, and monetary policies</p> Signup and view all the answers

    What is the total supply of goods and services available in the economy?

    <p>Aggregate Supply</p> Signup and view all the answers

    Which group is disproportionately affected by business cycles?

    <p>Economically vulnerable populations</p> Signup and view all the answers

    What is the main focus of economics as a social science?

    <p>The study of how individuals, businesses, governments, and other organizations make decisions to allocate scarce resources</p> Signup and view all the answers

    What is the primary purpose of understanding business cycles?

    <p>To anticipate economic changes and implement measures to mitigate the adverse effects</p> Signup and view all the answers

    What is the impact of business cycles on price levels?

    <p>It tends to rise during expansion and stabilize or fall during contractions</p> Signup and view all the answers

    What is the reason why human wants are not fulfilled?

    <p>Because human wants are limitless, yet resources are limited</p> Signup and view all the answers

    What is the role of government and social services during economic downturns?

    <p>To support economically vulnerable populations</p> Signup and view all the answers

    Which of the following is NOT a primary economic question?

    <p>What is the weather like today?</p> Signup and view all the answers

    What is the main difference between microeconomics and macroeconomics?

    <p>Microeconomics focuses on individual decisions, while macroeconomics focuses on the overall functioning of an economy</p> Signup and view all the answers

    What is the phase of the business cycle characterized by high economic activity, increasing employment, wages, and standards of living?

    <p>Prosperity</p> Signup and view all the answers

    What do individuals, governments, and societies need to make decisions about?

    <p>How to allocate limited resources</p> Signup and view all the answers

    What is the main challenge in economics?

    <p>The dichotomy between infinite desires and finite means</p> Signup and view all the answers

    What is the purpose of answering the primary economic questions?

    <p>To efficiently distribute limited resources</p> Signup and view all the answers

    Which branch of economics focuses on the market interactions between individuals and firms?

    <p>Microeconomics</p> Signup and view all the answers

    What is the primary function of the Foreign Sector in the economy?

    <p>To engage in trade, affecting imports and exports</p> Signup and view all the answers

    Which of the following represents the movement of goods and services?

    <p>Real Flow</p> Signup and view all the answers

    What is the total market value of all final goods and services produced within a country's borders in each period?

    <p>Gross Domestic Product (GDP)</p> Signup and view all the answers

    Which approach to calculating GDP involves summing up all outputs produced?

    <p>Product Approach</p> Signup and view all the answers

    What is the main limitation of GDP as a measure of economic activity?

    <p>It ignores wealth distribution</p> Signup and view all the answers

    What is the primary function of leading indicators in business cycles?

    <p>To signal future economic changes before they occur</p> Signup and view all the answers

    What type of economic indicator moves in the same direction as the economy?

    <p>Procyclical indicator</p> Signup and view all the answers

    What is the purpose of calculating per capita income?

    <p>To provide an average income per person</p> Signup and view all the answers

    What is the primary function of entrepreneurship in an economy?

    <p>To combine the other factors of production</p> Signup and view all the answers

    What is the difference between durable and semi-durable goods?

    <p>Durable goods last longer, while semi-durable goods have a shorter lifespan</p> Signup and view all the answers

    What is the primary focus of sustainable economic development?

    <p>Economic growth conducted without depleting natural resources or harming human and environmental health</p> Signup and view all the answers

    What is the formal sector of the economy?

    <p>Registered businesses whose activities are measured in official statistics like GDP</p> Signup and view all the answers

    What is the primary purpose of government regulatory measures in sustainable development?

    <p>To curb environmentally harmful activities</p> Signup and view all the answers

    What is the primary function of households in the circular flow model?

    <p>To provide labor and receive income</p> Signup and view all the answers

    What is the main challenge to achieving sustainable development?

    <p>Pollution and exploitation of labor</p> Signup and view all the answers

    What is the primary role of the tertiary sector of the economy?

    <p>To provide services rather than goods</p> Signup and view all the answers

    Which branch of economics examines the economic activities of government and its role in the economy?

    <p>Public Sector Economics</p> Signup and view all the answers

    What is the primary purpose of economic models?

    <p>To understand and predict the interactions and outcomes of economic actions</p> Signup and view all the answers

    What is the main difference between absolute and relative scarcity?

    <p>Absolute scarcity refers to the unavailability of resources, while relative scarcity refers to the limited accessibility of resources due to economic constraints</p> Signup and view all the answers

    What is the main approach to research in economics?

    <p>The scientific method, involving the formulation of a question, conducting investigations, and drawing conclusions based on evidence</p> Signup and view all the answers

    What is the primary challenge in economic research?

    <p>Dealing with human behaviors that are diverse and difficult to predict</p> Signup and view all the answers

    What is the term for goods that require scarce resources to produce?

    <p>Economic goods</p> Signup and view all the answers

    What is the focus of International Economics?

    <p>International trade and finance, studying how countries interact economically</p> Signup and view all the answers

    What is the term for the foregone benefit of the next best alternative when a choice is made?

    <p>Opportunity cost</p> Signup and view all the answers

    What is the primary impact of a recession on employment?

    <p>Job creation decreases.</p> Signup and view all the answers

    What is the relationship between aggregate demand and inflation?

    <p>Inflation tends to rise during expansion phases.</p> Signup and view all the answers

    What is the primary goal of economic analysis?

    <p>To allocate resources efficiently</p> Signup and view all the answers

    What is the primary purpose of understanding business cycles?

    <p>To implement measures to mitigate the adverse effects on the population.</p> Signup and view all the answers

    What is the fundamental question that economics seeks to answer?

    <p>How to allocate resources efficiently</p> Signup and view all the answers

    Which branch of economics examines the overall functioning of an economy?

    <p>Macroeconomics</p> Signup and view all the answers

    What is the primary characteristic of economically vulnerable populations during economic downturns?

    <p>Their income and employment opportunities decrease.</p> Signup and view all the answers

    Which of the following is an example of an exogenous reason for business cycles?

    <p>Natural disasters.</p> Signup and view all the answers

    What is the primary reason for the difference between human wants and available resources?

    <p>Limited resources</p> Signup and view all the answers

    What is the primary impact of business cycles on exchange rates?

    <p>Exchange rates tend to rise during expansion phases.</p> Signup and view all the answers

    What is the primary focus of economic decisions?

    <p>Allocating scarce resources</p> Signup and view all the answers

    What are the primary economic questions that individuals, governments, and societies must answer?

    <p>What to produce, how to produce, and for whom to produce</p> Signup and view all the answers

    What is the primary impact of business cycles on economic growth?

    <p>Economic growth tends to increase during expansion phases.</p> Signup and view all the answers

    What is the primary challenge in making economic decisions?

    <p>Limited resources</p> Signup and view all the answers

    Which phase of the business cycle is characterized by peak economic performance?

    <p>Boom.</p> Signup and view all the answers

    What is the primary focus of microeconomics?

    <p>The decisions of individuals and firms</p> Signup and view all the answers

    What is the primary function of the Foreign Sector in the economy?

    <p>To engage in trade, affecting imports and exports</p> Signup and view all the answers

    What is the main difference between the Real Flow and the Monetary Flow in the economy?

    <p>Real Flow deals with the movement of goods and services, while Monetary Flow deals with the movement of money</p> Signup and view all the answers

    What is the primary focus of the Goods Market?

    <p>The exchange of goods and services</p> Signup and view all the answers

    What is the formula for calculating GDP using the Expenditure Approach?

    <p>GDP = C + I + G + (X - M)</p> Signup and view all the answers

    What is the primary limitation of GDP as a measure of economic activity?

    <p>It does not account for the distribution of income among the population</p> Signup and view all the answers

    What is the main difference between GDP and GNI?

    <p>GDP focuses on production within the country, while GNI accounts for all income earned by the nationals</p> Signup and view all the answers

    What is the purpose of calculating per capita income?

    <p>To understand the economic well-being of the average citizen</p> Signup and view all the answers

    What is the main characteristic of a leading indicator in a business cycle?

    <p>It signals future economic changes before they occur</p> Signup and view all the answers

    What is the primary focus of Labour Economics?

    <p>Analyzing the supply and demand for labour</p> Signup and view all the answers

    What is the purpose of economic models in economics?

    <p>To provide a simplified representation of complex economic activities</p> Signup and view all the answers

    What is the main difference between absolute and relative scarcity?

    <p>Absolute scarcity occurs when resources are insufficient, while relative scarcity occurs when resources are sufficient</p> Signup and view all the answers

    What is the term for the approach to research in economics that involves objective analysis?

    <p>Positive economics</p> Signup and view all the answers

    What is the primary challenge faced by economists when conducting research?

    <p>Difficulty in controlling variables</p> Signup and view all the answers

    What is the focus of Environmental Economics?

    <p>Examining economic issues with environmental implications</p> Signup and view all the answers

    What is the term for the systematic approach used in economics?

    <p>The scientific method</p> Signup and view all the answers

    What is the primary goal of economic research?

    <p>To understand and predict economic phenomena</p> Signup and view all the answers

    What is the main function of a financial institution?

    <p>To facilitate savings and provide loans</p> Signup and view all the answers

    What is the term for the movement of goods and services?

    <p>Real Flow</p> Signup and view all the answers

    What is the formula for calculating GDP using the Expenditure Approach?

    <p>GDP = C + I + G + (X - M)</p> Signup and view all the answers

    What is the main limitation of GDP as a measure of economic activity?

    <p>It does not account for income distribution</p> Signup and view all the answers

    What is the term for the total income earned by a country's nationals?

    <p>GNI</p> Signup and view all the answers

    What is the primary role of entrepreneurship in the economy?

    <p>To combine the other three factors of production to create goods and services</p> Signup and view all the answers

    What is the purpose of calculating per capita income?

    <p>To understand the economic well-being of the average citizen</p> Signup and view all the answers

    What type of economic indicator moves in the same direction as the economy?

    <p>Procyclical Indicator</p> Signup and view all the answers

    What is the main difference between the primary and secondary sectors of the economy?

    <p>The primary sector involves extraction of natural resources, while the secondary sector involves manufacturing and processing activities</p> Signup and view all the answers

    What is the term for goods that are long-lasting and can be used multiple times?

    <p>Durable goods</p> Signup and view all the answers

    What is the main characteristic of a leading indicator in a business cycle?

    <p>It signals future economic changes before they occur</p> Signup and view all the answers

    What is the main goal of sustainable economic development?

    <p>To conduct economic growth without depleting natural resources or harming human and environmental health</p> Signup and view all the answers

    What is the term for the unregistered businesses that are not included in official economic statistics?

    <p>Informal sector</p> Signup and view all the answers

    What is the main function of the government in the circular flow model?

    <p>To collect taxes and provide public services and infrastructure</p> Signup and view all the answers

    What is the term for the portion of income available for spending or saving after taxes?

    <p>Disposable income</p> Signup and view all the answers

    What is the main characteristic of the tertiary sector of the economy?

    <p>It provides services rather than goods</p> Signup and view all the answers

    What is the primary objective of the economic system?

    <p>To allocate scarce resources to satisfy unlimited wants and needs</p> Signup and view all the answers

    What is the key consideration when deciding how to produce goods and services?

    <p>The availability of resources</p> Signup and view all the answers

    Which branch of economics examines the interactions among individuals and firms in the market?

    <p>Microeconomics</p> Signup and view all the answers

    What is the fundamental challenge that arises from the mismatch between human wants and available resources?

    <p>The economic problem</p> Signup and view all the answers

    What is the primary concern when deciding for whom to produce goods and services?

    <p>The distribution of goods and services</p> Signup and view all the answers

    What is the primary focus of macroeconomics?

    <p>The study of the overall functioning of the economy</p> Signup and view all the answers

    What is the main implication of the scarcity of resources?

    <p>Necessity of making choices about resource allocation</p> Signup and view all the answers

    Which of the following is a primary economic question?

    <p>What to produce</p> Signup and view all the answers

    What is the primary characteristic of the prosperity phase in a business cycle?

    <p>High economic activity, increasing employment, wages, and standards of living</p> Signup and view all the answers

    Which of the following is an example of an endogenous reason for business cycles?

    <p>Fluctuations in investment</p> Signup and view all the answers

    What is the impact of business cycles on price levels?

    <p>Inflation tends to rise during expansion and stabilize or fall during contraction</p> Signup and view all the answers

    Which of the following is a characteristic of boom phase in a business cycle?

    <p>Peak economic performance before a potential downturn</p> Signup and view all the answers

    What is the primary reason why economically vulnerable populations are disproportionately affected by business cycles?

    <p>Reduced income and higher unemployment rates</p> Signup and view all the answers

    What is the primary purpose of understanding business cycles?

    <p>To anticipate economic changes and implement measures to mitigate the adverse effects</p> Signup and view all the answers

    What is the primary characteristic of the recession phase in a business cycle?

    <p>Decreasing economic growth, output, and employment, leading to a downturn</p> Signup and view all the answers

    What is the relationship between business cycles and economic growth?

    <p>Expansion phases lead to economic growth, while contraction phases lead to declines</p> Signup and view all the answers

    What is the primary purpose of economic decision-making?

    <p>To allocate scarce resources efficiently</p> Signup and view all the answers

    Which economic question addresses the distribution of goods and services?

    <p>For whom to produce?</p> Signup and view all the answers

    What is the key distinction between microeconomics and macroeconomics?

    <p>Microeconomics studies individual economic units, while macroeconomics studies the overall economy</p> Signup and view all the answers

    What is the underlying assumption behind the concept of scarcity?

    <p>Human wants are infinite, but resources are finite</p> Signup and view all the answers

    What is the fundamental economic problem addressed by microeconomics?

    <p>How to allocate resources efficiently</p> Signup and view all the answers

    Which economic concept is closely related to the idea of unlimited wants and limited resources?

    <p>Scarcity</p> Signup and view all the answers

    What is the primary goal of macroeconomic analysis?

    <p>To examine the overall functioning of an economy</p> Signup and view all the answers

    What is the central theme underlying the study of economics?

    <p>The efficient allocation of scarce resources</p> Signup and view all the answers

    What is the primary function of the foreign sector in the economy?

    <p>To engage in trade, affecting imports and exports</p> Signup and view all the answers

    What is the primary difference between the real flow and monetary flow in the economy?

    <p>The real flow represents the movement of goods and services, while the monetary flow represents the movement of money</p> Signup and view all the answers

    What is the primary limitation of GDP as a measure of economic activity?

    <p>It does not account for income distribution among the population</p> Signup and view all the answers

    What is the primary difference between GDP and GNI?

    <p>GDP measures the total value of goods and services produced within the country's borders, while GNI measures the total income earned by the country's nationals</p> Signup and view all the answers

    What is the primary purpose of calculating per capita income?

    <p>To understand the economic well-being of the average citizen</p> Signup and view all the answers

    What is the primary characteristic of a leading indicator in a business cycle?

    <p>It signals future economic changes before they occur</p> Signup and view all the answers

    What is the primary purpose of economic indicators in business cycles?

    <p>To analyze changes in the business cycle</p> Signup and view all the answers

    What is the primary function of financial institutions in the economy?

    <p>To facilitate savings and provide loans</p> Signup and view all the answers

    Which phase of the business cycle is characterized by decreasing economic growth, output, and employment, leading to a downturn?

    <p>Recession</p> Signup and view all the answers

    Which of the following factors is an endogenous reason for business cycles?

    <p>Fluctuations in investment</p> Signup and view all the answers

    What is the total supply of goods and services available in the economy?

    <p>Aggregate Supply</p> Signup and view all the answers

    Which group is disproportionately affected by business cycles?

    <p>Economically vulnerable populations</p> Signup and view all the answers

    What is the primary purpose of the government in allocating budget resources?

    <p>To influence the provision of public services and economic activity</p> Signup and view all the answers

    What is the primary purpose of understanding business cycles?

    <p>To anticipate economic changes and implement measures to mitigate the adverse effects on the population</p> Signup and view all the answers

    What is the impact of business cycles on employment?

    <p>Job creation increases during booms and decreases during recessions</p> Signup and view all the answers

    What is the key characteristic of the tertiary sector of the economy?

    <p>It provides services rather than goods</p> Signup and view all the answers

    What is the primary function of entrepreneurship in the economy?

    <p>To combine the other three factors of production to create goods and services</p> Signup and view all the answers

    Which of the following is an exogenous reason for business cycles?

    <p>Natural disasters</p> Signup and view all the answers

    What is the main difference between the formal and informal sectors of the economy?

    <p>The informal sector includes unregistered businesses</p> Signup and view all the answers

    What is the phase of the business cycle characterized by a gradual improvement in economic conditions and a return to growth?

    <p>Recovery</p> Signup and view all the answers

    What is the primary goal of sustainable economic development?

    <p>To conduct economic growth without depleting natural resources or harming human and environmental health</p> Signup and view all the answers

    What is the primary function of households in the economy?

    <p>To provide labor and receive income</p> Signup and view all the answers

    What is the primary difference between consumer goods and services?

    <p>Consumer goods are tangible, while services are intangible</p> Signup and view all the answers

    What is the primary role of the government in promoting sustainable economic development?

    <p>To impose regulatory measures to curb environmentally harmful activities</p> Signup and view all the answers

    What is the primary focus of Labour Economics?

    <p>The supply and demand for labour and its effects on wage levels and employment</p> Signup and view all the answers

    What is the main difference between deductive and inductive reasoning in economics?

    <p>Deductive reasoning involves developing hypotheses based on existing theories, while inductive reasoning involves observing data to develop new theories</p> Signup and view all the answers

    What is the purpose of economic models in economics?

    <p>To simplify complex economic activities and make predictions</p> Signup and view all the answers

    What is the primary challenge in economic research?

    <p>The difficulty in controlling variables and conducting experiments</p> Signup and view all the answers

    What is the main difference between absolute and relative scarcity?

    <p>Absolute scarcity occurs when resources are insufficient to produce a good, while relative scarcity occurs when resources are sufficient but inaccessible to most</p> Signup and view all the answers

    What is the primary focus of Environmental Economics?

    <p>The economic issues with environmental implications</p> Signup and view all the answers

    What is the primary goal of economic research in economics?

    <p>To describe and predict economic phenomena without judgment</p> Signup and view all the answers

    What is the primary approach to research in economics that involves value judgments and subjective perspectives?

    <p>Normative Economics</p> Signup and view all the answers

    Which branch of economics focuses on the role of money in the economy, including how it's controlled and its effects on economic variables?

    <p>Monetary Economics</p> Signup and view all the answers

    What is the primary difference between deductive and inductive reasoning in economics?

    <p>Deductive reasoning involves developing hypotheses, while inductive reasoning involves observing data</p> Signup and view all the answers

    What is the primary purpose of economic models?

    <p>To simplify complex economic activities and make predictions</p> Signup and view all the answers

    What is the primary challenge in economic research?

    <p>Dealing with human behaviors that are diverse and difficult to predict</p> Signup and view all the answers

    What is the term for goods that are naturally available without cost?

    <p>Free goods</p> Signup and view all the answers

    What is the primary function of entrepreneurship in the economy?

    <p>To combine the other three factors of production to create goods and services</p> Signup and view all the answers

    What is the term for the approach to research in economics that involves value judgments and subjective perspectives?

    <p>Normative economics</p> Signup and view all the answers

    What is the primary difference between absolute and relative scarcity?

    <p>Absolute scarcity occurs when resources are insufficient, while relative scarcity occurs when resources are sufficient but inaccessible</p> Signup and view all the answers

    What is the primary difference between the real flow and monetary flow in an economy?

    <p>Real flow represents the movement of goods and services, while monetary flow represents the movement of money.</p> Signup and view all the answers

    Which of the following is NOT a limitation of GDP as a measure of economic activity?

    <p>It accounts for non-monetary transactions and informal economic activities.</p> Signup and view all the answers

    What is the main difference between a leading indicator and a lagging indicator in a business cycle?

    <p>Leading indicators signal future economic changes, while lagging indicators confirm changes that have already occurred.</p> Signup and view all the answers

    What is the primary purpose of calculating per capita income?

    <p>To provide an average income per person, dividing total GDP or GNI by the population.</p> Signup and view all the answers

    What is the main difference between the Product Approach and the Expenditure Approach to calculating GDP?

    <p>The Product Approach sums the total income earned from producing goods and services, while the Expenditure Approach sums the total spending on final goods and services.</p> Signup and view all the answers

    What is the primary function of financial institutions in the economy?

    <p>To facilitate savings and provide loans.</p> Signup and view all the answers

    What is the main characteristic of a procyclical indicator in a business cycle?

    <p>It moves in the same direction as the economy.</p> Signup and view all the answers

    What is the primary purpose of understanding business cycles?

    <p>To forecast future economic changes.</p> Signup and view all the answers

    What is the primary implication of the fundamental economic problem?

    <p>Choices must be made about how to allocate resources efficiently</p> Signup and view all the answers

    Which of the following is a key characteristic of macroeconomics?

    <p>It addresses broad issues like unemployment and economic growth</p> Signup and view all the answers

    What is the primary role of economic questions in the study of economics?

    <p>To guide decision-making about resource allocation</p> Signup and view all the answers

    What is the primary difference between microeconomics and macroeconomics?

    <p>Microeconomics examines the behavior of individual economic units, while macroeconomics studies the overall economy</p> Signup and view all the answers

    What is the primary implication of the scarcity of resources?

    <p>Choices must be made about how to allocate resources efficiently</p> Signup and view all the answers

    What is the primary focus of the economic problem of for whom to produce?

    <p>Determining who will receive the goods and services produced</p> Signup and view all the answers

    What is the primary role of economic decisions in the economy?

    <p>To allocate resources efficiently</p> Signup and view all the answers

    Which of the following is a key characteristic of the economic problem of what to produce?

    <p>It involves deciding which goods and services to produce given the limited resources</p> Signup and view all the answers

    What is the primary role of the government in the allocation of resources?

    <p>To provide public services and infrastructure</p> Signup and view all the answers

    Which of the following sectors of the economy is responsible for providing services rather than goods?

    <p>Tertiary Sector</p> Signup and view all the answers

    What is the primary difference between durable and semi-durable goods?

    <p>Durability and lifespan</p> Signup and view all the answers

    Which of the following is an example of a supportive measure for sustainable development?

    <p>Subsidies for environmentally friendly practices</p> Signup and view all the answers

    What is the primary role of entrepreneurship in the economy?

    <p>To combine the other three factors of production to create goods and services</p> Signup and view all the answers

    What is the primary challenge to achieving sustainable development?

    <p>Pollution and environmental degradation</p> Signup and view all the answers

    Which of the following is an example of a formal sector business?

    <p>Registered companies with official tax identification</p> Signup and view all the answers

    What is the primary purpose of exchange rates in international trade?

    <p>To determine how much of one currency can be exchanged for another</p> Signup and view all the answers

    What is the primary role of government and social services in supporting economically vulnerable populations during economic downturns?

    <p>To provide financial assistance and support</p> Signup and view all the answers

    What is the primary impact of business cycles on exchange rates?

    <p>It leads to a depreciation of the national currency</p> Signup and view all the answers

    What is the primary difference between aggregate demand and aggregate supply?

    <p>Aggregate demand is the total demand for goods and services, while aggregate supply is the total supply of goods and services</p> Signup and view all the answers

    What is the primary reason why business cycles are important to understand?

    <p>To anticipate and prepare for economic changes</p> Signup and view all the answers

    What is the primary characteristic of the prosperity phase of the business cycle?

    <p>High economic activity and increasing employment</p> Signup and view all the answers

    What is the primary impact of business cycles on economic growth?

    <p>It leads to fluctuations in economic growth, with expansion and contraction phases</p> Signup and view all the answers

    What is the primary reason why economically vulnerable populations are disproportionately affected by business cycles?

    <p>They are more likely to experience reduced income and higher unemployment rates during economic downturns</p> Signup and view all the answers

    What is the primary role of understanding business cycles in economic policymaking?

    <p>To anticipate and prepare for economic changes and implement measures to mitigate the adverse effects</p> Signup and view all the answers

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