Economics Fundamentals

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

If a country imposes a tariff on imported steel, what is the most likely economic outcome?

Increased domestic steel production and higher prices for consumers. (correct)
Decreased domestic steel production and higher prices for consumers.
Decreased domestic steel production and lower prices for consumers.
Increased domestic steel production and lower prices for consumers.

In a perfectly competitive market, individual firms have the power to set prices.

False (B)

What is the primary difference between GDP and GNP?

GDP measures production within a country's borders, while GNP measures production by a country's residents, regardless of location.

When a central bank lowers the reserve requirement, the money supply in the economy will generally _________.

increase Signup and view all the answers

Match the following economic concepts with their definitions:

Opportunity Cost = The value of the next best alternative foregone. Comparative Advantage = The ability to produce a good or service at a lower opportunity cost than another producer. Inflation = A sustained increase in the general price level of goods and services in an economy over a period of time. Elasticity = A measure of how much the quantity demanded or supplied of a product responds to a change in price. Signup and view all the answers

Which of the following is a key characteristic of a monopolistically competitive market?

Differentiated products and many firms. (D) Signup and view all the answers

Expansionary fiscal policy involves decreasing government spending and increasing taxes.

False (B) Signup and view all the answers

Explain how exchange rates can impact a country's trade balance.

A weaker domestic currency makes exports cheaper and imports more expensive, potentially improving the trade balance; a stronger currency has the opposite effect. Signup and view all the answers

The Gini coefficient is a measure of _________ in a country.

inequality Signup and view all the answers

What is the likely effect of imposing a binding price ceiling on a market?

A shortage of the good. (D) Signup and view all the answers

Flashcards

Microeconomics

The study of economic actions of individuals and firms, focusing on supply, demand, and market equilibrium.

Comparative Advantage

Comparative advantage occurs when a country can produce a good or service at a lower opportunity cost than another country.

Trade Barriers

Restrictions imposed by a government on the free international exchange of goods or services.

Macroeconomics

The study of the economy as a whole, including topics such as inflation, unemployment, and economic growth.