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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?</p> Signup and view all the answers

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

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

    What is studied in macroeconomics?

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

    What is a factor that leads to the economic problem?

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

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

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

    What sector of the economy involves extraction of natural resources?

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

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

    <p>Non-durable Goods</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 a key component of sustainable economic development?

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

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

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

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

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

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

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

    What is a challenge to achieving sustainable development?

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

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

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

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

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

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

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

    Who are disproportionately affected by business cycles?

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

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

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

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

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

    What is the main focus of Monetary Economics?

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

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

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

    What is the main challenge in economic research?

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

    What is the fundamental economic problem?

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

    What is an opportunity cost?

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

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

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

    What is the primary function of financial institutions?

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

    What is the Real Flow in the economy?

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

    What is the primary purpose of the Goods Market?

    <p>To exchange 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 Gross National Income (GNI)?

    <p>The total income earned by a country's nationals, including production inside and outside the country</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</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 a characteristic of business cycles?

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

    What is the primary challenge in economics?

    <p>Scarcity</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 main focus of macroeconomics?

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

    What is a key aspect of the economic problem?

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

    Which of the following is not a primary economic question?

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

    What is the main focus of economic analysis?

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

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

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

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

    <p>Job creation decreases</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</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</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</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 sector of the economy provides services rather than goods?

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

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

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

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

    <p>Durable Goods</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 economic participant hires labor and produces goods and services?

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

    What is a key component of sustainable economic development?

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

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

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

    What is the purpose of economic models?

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

    What is the primary challenge in economic research?

    <p>The difficulty of conducting controlled experiments</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 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</p> Signup and view all the answers

    What is the primary function of International Economics?

    <p>To focus on international trade and finance</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</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</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 main purpose of the Factor Market?

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

    What is the focus of the Goods Market?

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

    What is a characteristic of business cycles?

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

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

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

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

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

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

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

    What is the main purpose of economic models?

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

    What is the main difference between Positive and Normative Economics?

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

    What is the opportunity cost of a choice?

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

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

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

    What is the main focus of International Economics?

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

    What is the main focus of Labour Economics?

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

    What is the main characteristic of durable goods?

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

    What is the main purpose of exchange rates?

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

    What is the main characteristic of the tertiary sector?

    <p>It provides services rather than goods</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</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</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</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</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</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</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</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 primary function of the Foreign Sector in the economy?

    <p>Engaging in trade, affecting imports and exports</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

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

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

    What are the three main approaches to calculate GDP?

    <p>Product Approach, Expenditure Approach, and Income Approach</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</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</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</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</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.</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</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</p> Signup and view all the answers

    Which of the following is not a primary economic question?

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

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

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

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

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

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

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

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

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

    What is the primary purpose of economic models?

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

    Which approach involves observing data to develop new theories?

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

    What is the primary challenge in economic research?

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

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

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

    What is the primary focus of International Economics?

    <p>International trade and finance</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 difference between Positive and Normative Economics?

    <p>Positive Economics focuses on describing and predicting, while Normative Economics involves value judgments</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</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</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</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</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</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</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 relationship between inflation and business cycles?

    <p>Inflation tends to rise during expansion and stabilize or fall during contraction</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 flows is a movement of goods and services?

    <p>Real Flow</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</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 a 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 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 a characteristic of business cycles?

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

    Which of the following is NOT a primary economic question?

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

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

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

    What is the primary goal of economic models?

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

    What is the primary challenge in economic research?

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

    What is the main feature of economic goods?

    <p>They require scarce resources to produce</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</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</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.</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.</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.</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.</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.</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 employment?

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

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

    <p>Appliances</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</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</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</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 purpose of exchange rates in international trade?

    <p>To facilitate international trade by determining how much of one currency can be exchanged for another</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</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</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</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</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 function of the informal sector in the economy?

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

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