Exploring Basic Economics
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Questions and Answers

Which branch of economics focuses on the behavior and interactions of economic agents and how economies work?

  • Positive economics
  • Macroeconomics
  • Normative economics
  • Microeconomics (correct)

    • What does macroeconomics analyze?

  • The production and consumption of goods and services
  • The behavior of economic agents
  • Factors affecting the economy (correct)
  • Individual agents and markets

    • What is the distinction between positive economics and normative economics?

  • Positive economics analyzes the behavior of economic agents, while normative economics analyzes the outcomes of interactions
  • Positive economics analyzes the economy as a system, while normative economics focuses on individual agents
  • Positive economics focuses on microeconomics, while normative economics focuses on macroeconomics
  • Positive economics describes 'what is', while normative economics advocates 'what ought to be' (correct)

    • What is the main focus of applied economics?

    <p>The application of economic theory to real-world situations</p> Signup and view all the answers

    What is the distinction between rational economics and behavioral economics?

    <p>Rational economics assumes individuals act rationally, while behavioral economics considers psychological and social factors in decision-making</p> Signup and view all the answers

    Which term refers to the basic fact of life that there exists only a finite amount of human and nonhuman resources which the best technical knowledge is capable of using to produce only limited maximum amounts of each economic good?

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

    What is the opposite of scarcity?

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

    What role does scarcity play in economic theory?

    <p>Key role</p> Signup and view all the answers

    What does scarcity include besides the limited availability of a commodity?

    <p>Individual's lack of resources to buy commodities</p> Signup and view all the answers

    According to Walras, what does social wealth refer to?

    <p>Both material and immaterial goods</p> Signup and view all the answers

    Which term refers to the limited availability of a commodity, which may be in demand in the market or by the commons?

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

    What does scarcity include besides the limited availability of a commodity?

    <p>Individual's lack of resources to buy commodities</p> Signup and view all the answers

    What does economics study according to the text?

    <p>The behavior and interactions of economic agents and how economies work</p> Signup and view all the answers

    What would happen if the conditions of scarcity didn't exist?

    <p>No economic goods</p> Signup and view all the answers

    What is the opposite of scarcity?

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

    Which of the following is NOT a purpose of monetary policy?

    <p>To increase government borrowing</p> Signup and view all the answers

    What does fiscal policy rely on to manage business cycle phenomena?

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

    What is the main difference between monetary policy and fiscal policy?

    <p>Monetary policy focuses on interest rates, while fiscal policy focuses on taxation</p> Signup and view all the answers

    What is the purpose of monetary policy in relation to exchange rates?

    <p>To maintain predictable exchange rates with other currencies</p> Signup and view all the answers

    What does monetary policy modify to control the economy?

    <p>The supply of money</p> Signup and view all the answers

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