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Questions and Answers

What is the primary focus of economics?

  • The study of how individuals, businesses, governments, and other organizations make decisions to allocate scarce resources (correct)
  • The analysis of how businesses and governments make financial decisions
  • The examination of how societies make decisions about resource allocation
  • The study of how individuals make decisions to allocate abundant resources

What arises because human wants are limitless, yet resources are limited?

  • Poverty
  • Unemployment
  • Inflation
  • Scarcity (correct)

What is the fundamental economic problem?

  • How to increase employment
  • How to reduce poverty
  • How to distribute limited resources efficiently (correct)
  • How to achieve economic growth

What is one of the primary economic questions?

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

Which branch of economics focuses on the decisions of individuals and firms?

<p>Microeconomics (B)</p> Signup and view all the answers

What is studied in macroeconomics?

<p>The overall functioning of an economy (B)</p> Signup and view all the answers

What is a factor that leads to the economic problem?

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

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

<p>Resource allocation and financial capacities (C)</p> Signup and view all the answers

What is the primary role of entrepreneurship in the economy?

<p>Combining other factors to create goods and services (A)</p> Signup and view all the answers

What sector of the economy involves extraction of natural resources?

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

What type of goods are consumed immediately or shortly after purchase?

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

What is a key component of sustainable economic development?

<p>Fair labor practices (D)</p> Signup and view all the answers

What type of measure might a government use to curb environmentally harmful activities?

<p>Regulatory Measure (A)</p> Signup and view all the answers

Which economic participant provides labor and receives income in the circular flow model?

<p>Households (D)</p> Signup and view all the answers

What is the term for the economy's various sectors, including businesses and government?

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

What is a challenge to achieving sustainable development?

<p>Pollution (A)</p> Signup and view all the answers

What is the primary function of the government in the economy?

<p>Collecting taxes and providing public services (D)</p> Signup and view all the answers

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

<p>Prosperity (A)</p> Signup and view all the answers

What is an example of an exogenous reason that can influence the economy?

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

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

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

What tends to happen to inflation during the expansion phase of the business cycle?

<p>It rises (D)</p> Signup and view all the answers

Who are disproportionately affected by business cycles?

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

What is the purpose of understanding business cycles?

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

What happens to employment during the boom phase of the business cycle?

<p>Job creation increases (B)</p> Signup and view all the answers

What is an example of an endogenous reason that can influence the economy?

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

What is the main focus of Monetary Economics?

<p>The role of money in the economy (C)</p> Signup and view all the answers

Which of the following approaches involves developing hypotheses based on existing theories?

<p>Deductive reasoning (B)</p> Signup and view all the answers

What is the main purpose of economic models?

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

What is the main difference between Positive and Normative Economics?

<p>One is based on objective analysis, while the other is based on subjective analysis (B)</p> Signup and view all the answers

What is the main challenge in economic research?

<p>All of the above (D)</p> Signup and view all the answers

What is the fundamental economic problem?

<p>The problem of scarcity (B)</p> Signup and view all the answers

What is the difference between absolute and relative scarcity?

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

What is an opportunity cost?

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

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

<p>All of the above (D)</p> Signup and view all the answers

What is the main difference between economic goods and free goods?

<p>Economic goods require scarce resources to produce, while free goods are naturally available without cost (D)</p> Signup and view all the answers

What is the primary function of financial institutions?

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

What is the Real Flow in the economy?

<p>The movement of goods and services (C)</p> Signup and view all the answers

What is the primary purpose of the Goods Market?

<p>To exchange goods and services (C)</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) (D)</p> Signup and view all the answers

What is Gross National Income (GNI)?

<p>The total income earned by a country's nationals, including production inside and outside the country (C)</p> Signup and view all the answers

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

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

What is a characteristic of business cycles?

<p>They are characterized by alternating periods of expansion and contraction (A)</p> Signup and view all the answers

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

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

What is a coincident indicator in the context of business cycles?

<p>A indicator that moves in tandem with the economy (C)</p> Signup and view all the answers

What is the primary challenge in economics?

<p>Scarcity (A)</p> Signup and view all the answers

Which of the following is a primary economic question?

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

What is the main focus of macroeconomics?

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

What is the main difference between microeconomics and macroeconomics?

<p>Microeconomics studies individuals and firms, while macroeconomics studies the overall economy (B)</p> Signup and view all the answers

Why do individuals, governments, and societies need to make decisions about resource allocation?

<p>Because resources are finite (B)</p> Signup and view all the answers

What is a key aspect of the economic problem?

<p>Limited resources and infinite wants (D)</p> Signup and view all the answers

Which of the following is not a primary economic question?

<p>Why are resources limited? (B)</p> Signup and view all the answers

What is the main focus of economic analysis?

<p>How to make decisions about finite resources (A)</p> Signup and view all the answers

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

<p>High economic activity (D)</p> Signup and view all the answers

Which of the following is an example of an endogenous reason that can influence the economy?

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

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

<p>They are disproportionately affected by economic downturns (C)</p> Signup and view all the answers

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

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

What happens to employment during the recession phase of the business cycle?

<p>Job creation decreases (A)</p> Signup and view all the answers

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

<p>To provide support to economically vulnerable populations (D)</p> Signup and view all the answers

What is the impact of business cycles on economic growth?

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

What is the purpose of understanding business cycles?

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

What sector of the economy provides services rather than goods?

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

What is the term for the economy's various sectors, including businesses and government?

<p>Economic Sectors (C)</p> Signup and view all the answers

What type of goods are long-lasting and can be used multiple times?

<p>Durable Goods (A)</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 (A)</p> Signup and view all the answers

Which economic participant hires labor and produces goods and services?

<p>Businesses (B)</p> Signup and view all the answers

What is a key component of sustainable economic development?

<p>All of the above (D)</p> Signup and view all the answers

What type of measure might a government use to curb environmentally harmful activities?

<p>Regulatory measures (C)</p> Signup and view all the answers

What is the term for the total value of goods and services produced within an economy?

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

What is the primary function of government in the economy?

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

What is the main focus of Developmental Economics?

<p>The policies that promote economic development in less developed countries (B)</p> Signup and view all the answers

What is the purpose of economic models?

<p>To test hypotheses and make economic predictions (D)</p> Signup and view all the answers

What is the 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 (B)</p> Signup and view all the answers

What is the primary challenge in economic research?

<p>The difficulty of conducting controlled experiments (A)</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 (A)</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 but inaccessible (B)</p> Signup and view all the answers

What is the primary function of International Economics?

<p>To focus on international trade and finance (D)</p> Signup and view all the answers

What is the main purpose of the scientific method in economics?

<p>To develop hypotheses and test them against empirical data (B)</p> Signup and view all the answers

What is the primary difference between Positive and Normative Economics?

<p>Positive economics focuses on describing and predicting economic phenomena, while normative economics involves value judgments and subjective perspectives (B)</p> Signup and view all the answers

What is the primary focus of Environmental Economics?

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

What is the main purpose of the Factor Market?

<p>To trade factors of production such as land, labor, and capital (B)</p> Signup and view all the answers

What is the focus of the Goods Market?

<p>To facilitate the movement of goods and services (C)</p> Signup and view all the answers

What is the monetary flow in the economy?

<p>The movement of money in exchange for goods, services, and labor (B)</p> Signup and view all the answers

What is the main purpose of calculating GDP?

<p>To measure the total market value of all final goods and services produced (A)</p> Signup and view all the answers

What is the Income Approach to calculating GDP?

<p>The total income earned from producing goods and services (B)</p> Signup and view all the answers

What is a limitation of GNI?

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

What is a characteristic of business cycles?

<p>Alternating periods of expansion and contraction in economic activity (C)</p> Signup and view all the answers

What is the purpose of leading indicators in understanding business cycles?

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

What is the term for the total income earned by a country's nationals, including production inside and outside the country?

<p>GNI (B)</p> Signup and view all the answers

What is the purpose of per capita income calculation?

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

Why do individuals, governments, and societies need to make decisions about resource allocation?

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

What is the primary focus of the economic question 'What to produce?'

<p>Deciding which goods and services should be produced given limited resources (A)</p> Signup and view all the answers

Which branch of economics addresses broad issues like unemployment and economic growth?

<p>Macroeconomics (D)</p> Signup and view all the answers

What is the main reason why economics is considered a social science?

<p>Because it studies how individuals, businesses, governments, and other organizations make decisions (D)</p> Signup and view all the answers

What is the underlying assumption behind the concept of scarcity?

<p>That human wants are unlimited and resources are limited (C)</p> Signup and view all the answers

What is the primary economic question that involves deciding who will receive the products and services created?

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

Why is it necessary to make decisions about resource allocation in an economy?

<p>Because resources are limited and wants are unlimited (D)</p> Signup and view all the answers

What branch of economics focuses on the decisions of individuals and firms?

<p>Microeconomics (B)</p> Signup and view all the answers

What is the primary focus of Developmental Economics?

<p>Policies that promote economic development in less developed countries (B)</p> Signup and view all the answers

Which of the following approaches involves observing data to develop new theories?

<p>Inductive reasoning (C)</p> Signup and view all the answers

What is the main purpose of economic models?

<p>To test hypotheses and make economic predictions (B)</p> Signup and view all the answers

What is the main difference between Positive and Normative Economics?

<p>Objective vs. subjective analysis (C)</p> Signup and view all the answers

What type of scarcity occurs when resources are sufficient to satisfy needs but are inaccessible to most due to economic constraints?

<p>Relative scarcity (B)</p> Signup and view all the answers

What is the opportunity cost of a choice?

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

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

<p>Sunlight (D)</p> Signup and view all the answers

What is the main challenge in economic research?

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

What is the main focus of International Economics?

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

What is the main focus of Labour Economics?

<p>The supply and demand for labour (D)</p> Signup and view all the answers

What is the primary role of the public sector in the economy?

<p>To control government enterprises and services (B)</p> Signup and view all the answers

What is the main characteristic of durable goods?

<p>They are long-lasting (B)</p> Signup and view all the answers

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

<p>The primary sector involves extraction, while the secondary sector involves manufacturing (C)</p> Signup and view all the answers

What is the main purpose of regulatory measures in achieving sustainable development?

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

What is the main characteristic of the informal sector?

<p>It is not included in official economic statistics (A)</p> Signup and view all the answers

What is the main role of households in the circular flow model?

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

What is the main importance of sustainable development?

<p>It ensures economic growth without depleting natural resources or harming human and environmental health (B)</p> Signup and view all the answers

What is the main difference between capital and entrepreneurship?

<p>Capital involves the use of natural resources, while entrepreneurship involves the combination of other factors of production (D)</p> Signup and view all the answers

What is the main purpose of exchange rates?

<p>To facilitate international trade (B)</p> Signup and view all the answers

What is the main characteristic of the tertiary sector?

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

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

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

Which of the following is an example of an endogenous reason that can influence the economy?

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

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

<p>They are more affected by economic downturns due to reduced income and higher unemployment rates (C)</p> Signup and view all the answers

What is the purpose of understanding business cycles in economic planning and policymaking?

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

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

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

What happens to price levels during the expansion phase of the business cycle?

<p>They tend to rise (C)</p> Signup and view all the answers

What is the main difference between the prosperity and boom phases of the business cycle?

<p>The prosperity phase has high economic activity, while the boom phase has peak economic performance (C)</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 (A)</p> Signup and view all the answers

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

<p>Engaging in trade, affecting imports and exports (C)</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 (D)</p> Signup and view all the answers

Which approach to calculating GDP is based on the total income earned from producing goods and services?

<p>Income Approach (D)</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 by a country's nationals (A)</p> Signup and view all the answers

What is the purpose of per capita income calculation?

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

What are the three main approaches to calculate GDP?

<p>Product Approach, Expenditure Approach, and Income Approach (C)</p> Signup and view all the answers

What is the primary characteristic of business cycles?

<p>They are alternating periods of expansion and contraction in economic activity (A)</p> Signup and view all the answers

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

<p>To analyze changes in the business cycle and understand its phases (B)</p> Signup and view all the answers

What is a coincident indicator in the context of business cycles?

<p>An indicator that moves in tandem with the economy (B)</p> Signup and view all the answers

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

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

What is the underlying assumption about human wants and resources that drives the economic problem?

<p>Human wants are infinite, but resources are limited. (A)</p> Signup and view all the answers

Which economic branch would study the impact of a new technology on the production of a specific good?

<p>Microeconomics (D)</p> Signup and view all the answers

What is the primary concern of individuals, governments, and societies when making economic decisions?

<p>Allocating limited resources efficiently (B)</p> Signup and view all the answers

Which of the following is not a primary economic question?

<p>How to educate the workforce (B)</p> Signup and view all the answers

What is the primary difference between macroeconomics and microeconomics?

<p>Macroeconomics focuses on the overall economy, while microeconomics focuses on individual markets (B)</p> Signup and view all the answers

Which of the following best represents the core challenge in economics?

<p>Scarcity (D)</p> Signup and view all the answers

What is the primary function of economic analysis in the context of resource allocation?

<p>To allocate resources efficiently to satisfy competing wants (C)</p> Signup and view all the answers

Which of the following is a consequence of the fundamental economic problem?

<p>Opportunity costs (A)</p> Signup and view all the answers

What is the primary factor that determines the allocation of resources in a mixed economy?

<p>Market forces (B)</p> Signup and view all the answers

Which of the following sectors is most closely associated with the provision of public goods and services?

<p>Public sector (D)</p> Signup and view all the answers

What is the primary goal of sustainable economic development?

<p>Conducting economic growth without depleting natural resources or harming human and environmental health (C)</p> Signup and view all the answers

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

<p>Clothing (D)</p> Signup and view all the answers

What is the primary function of entrepreneurship in the economy?

<p>Combining the factors of production to create goods and services (C)</p> Signup and view all the answers

Which of the following is a characteristic of the informal sector?

<p>Businesses are unregistered and do not pay taxes (D)</p> Signup and view all the answers

What is the primary role of the government in the circular flow model?

<p>Collecting taxes and providing public services and infrastructure (B)</p> Signup and view all the answers

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

<p>Subsidy for environmentally friendly practices (A)</p> Signup and view all the answers

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

<p>Primary sector involves extraction of natural resources, while secondary sector involves manufacturing (A)</p> Signup and view all the answers

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

<p>All of the above (D)</p> Signup and view all the answers

Which branch of economics studies the policies that promote economic development in less developed countries?

<p>Developmental Economics (D)</p> Signup and view all the answers

What is the primary purpose of economic models?

<p>To test hypotheses and make economic predictions (A)</p> Signup and view all the answers

Which approach involves observing data to develop new theories?

<p>Inductive reasoning (D)</p> Signup and view all the answers

What is the primary challenge in economic research?

<p>Maintaining all variables constant except one (D)</p> Signup and view all the answers

What is the difference between absolute and relative scarcity?

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

What is the opportunity cost of choosing to plant wheat instead of corn?

<p>The foregone benefit of planting corn (B)</p> Signup and view all the answers

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

<p>Sunlight (A)</p> Signup and view all the answers

What is the primary focus of International Economics?

<p>International trade and finance (C)</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 (A)</p> Signup and view all the answers

What is the primary difference between Positive and Normative Economics?

<p>Positive Economics focuses on describing and predicting, while Normative Economics involves value judgments (C)</p> Signup and view all the answers

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

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

Which of the following is an example of an exogenous reason that influences the economy?

<p>Foreign trade dynamics (A)</p> Signup and view all the answers

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

<p>They suffer disproportionately from economic downturns (B)</p> Signup and view all the answers

What is the relationship between aggregate demand and supply during the expansion phase of a business cycle?

<p>Aggregate demand is greater than aggregate supply (D)</p> Signup and view all the answers

What is the primary purpose of understanding business cycles?

<p>To mitigate the adverse effects of economic downturns on vulnerable populations (A)</p> Signup and view all the answers

What is the characteristic of the recovery phase of a business cycle?

<p>Gradual improvement in economic conditions (D)</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 (D)</p> Signup and view all the answers

What is the relationship between inflation and business cycles?

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

Which of the following flows is a movement of goods and services?

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

What is the primary purpose of the Factor Market?

<p>To trade factors of production such as land, labor, and capital (C)</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) (B)</p> Signup and view all the answers

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

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

What is a characteristic of business cycles?

<p>They are characterized by alternating periods of expansion and contraction (A)</p> Signup and view all the answers

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

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

What is a coincident indicator in the context of business cycles?

<p>A movement in tandem with the economy (A)</p> Signup and view all the answers

What is the primary difference between GDP and GNI?

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

What is the underlying assumption that drives the economic problem of scarcity?

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

Which of the following is NOT a primary economic question?

<p>When to consume? (D)</p> Signup and view all the answers

What is the primary distinction between microeconomics and macroeconomics?

<p>Microeconomics studies firms, while macroeconomics studies the overall economy (B)</p> Signup and view all the answers

What is the term for the process of allocating limited resources to meet unlimited human wants?

<p>Resource allocation (C)</p> Signup and view all the answers

Which branch of economics is concerned with issues such as unemployment, inflation, and economic growth?

<p>Macroeconomics (A)</p> Signup and view all the answers

What is the primary challenge in addressing the economic problem of scarcity?

<p>Making decisions about resource allocation (A)</p> Signup and view all the answers

What is the term for the study of how individuals, businesses, governments, and other organizations make decisions to allocate scarce resources?

<p>Economics (A)</p> Signup and view all the answers

What is the primary role of economics in addressing the problem of scarcity?

<p>To allocate limited resources efficiently (A)</p> Signup and view all the answers

What is the primary goal of economic models?

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

Which approach involves developing hypotheses based on existing theories and testing them against empirical data?

<p>Deductive reasoning (B)</p> Signup and view all the answers

What is the primary challenge in economic research?

<p>Maintaining controlled experiments (A)</p> Signup and view all the answers

What is the main difference between absolute and relative scarcity?

<p>One is a physical limitation, while the other is an economic constraint (B)</p> Signup and view all the answers

What is the primary focus of Developmental Economics?

<p>Policies that promote economic development in less developed countries (B)</p> Signup and view all the answers

What is the primary function of the scientific method in economics?

<p>To test hypotheses and draw conclusions based on evidence (C)</p> Signup and view all the answers

What is the primary difference between Positive and Normative Economics?

<p>One focuses on objective analysis, while the other involves value judgments (D)</p> Signup and view all the answers

What is the main feature of economic goods?

<p>They require scarce resources to produce (D)</p> Signup and view all the answers

What is the primary role of opportunity cost in economics?

<p>To reflect the trade-offs involved in making economic choices (D)</p> Signup and view all the answers

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

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

What is the primary reason why business cycles have a significant impact on economically vulnerable populations?

<p>They have a lower ability to absorb economic shocks. (B)</p> Signup and view all the answers

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

<p>Peak economic performance and a potential downturn. (C)</p> Signup and view all the answers

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

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

What is the primary difference between exogenous and endogenous reasons that influence the economy?

<p>Exogenous reasons are external, while endogenous reasons are internal. (B)</p> Signup and view all the answers

What is the primary impact of business cycles on price levels?

<p>Inflation tends to increase during expansion and decrease during contractions. (B)</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. (B)</p> Signup and view all the answers

What is the primary impact of business cycles on employment?

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

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

<p>Gradual improvement in economic conditions. (B)</p> Signup and view all the answers

What is the primary function of the Foreign Sector in a country's economy?

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

Which of the following represents the continuous flow of resources and financial assets in the economy?

<p>Production, Income, and Spending (D)</p> Signup and view all the answers

What is the primary role of the public sector in the economy?

<p>To invest in public goods and services that benefit society as a whole (B)</p> Signup and view all the answers

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

<p>Appliances (B)</p> Signup and view all the answers

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

<p>All of the above (D)</p> Signup and view all the answers

Which of the following indicators would move in the opposite direction of the economy during a recession?

<p>Counter Cyclical Indicator (D)</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 (D)</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 (D)</p> Signup and view all the answers

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

<p>To facilitate international trade by determining how much of one currency can be exchanged for another (B)</p> Signup and view all the answers

What is the primary goal of sustainable development?

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

Which of the following is a characteristic of business cycles?

<p>They are characterized by alternating periods of expansion and contraction (B)</p> Signup and view all the answers

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

<p>To track changes in the economy and predict future changes (D)</p> Signup and view all the answers

What is the main function of entrepreneurship in the economy?

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

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

<p>To provide services that are not included in official economic statistics (C)</p> Signup and view all the answers

What is the primary difference between GDP and GNI?

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

What is the main difference between households and businesses in the circular flow model?

<p>Households provide labor, while businesses produce goods and services (A)</p> Signup and view all the answers

What is the primary function of the Goods Market in a country's economy?

<p>To exchange goods and services (B)</p> Signup and view all the answers

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

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

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

<p>To collect taxes and provide public goods and services (A)</p> Signup and view all the answers

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