Podcast
Questions and Answers
Modern technology can decrease the quantity and quality of products, which ultimately translates into a decrease in revenue and profits, or economic growth.
Modern technology can decrease the quantity and quality of products, which ultimately translates into a decrease in revenue and profits, or economic growth.
False (B)
Effectiveness in economics refers to the attainment of goals and objectives.
Effectiveness in economics refers to the attainment of goals and objectives.
True (A)
Equity in economics deals with justice and fairness.
Equity in economics deals with justice and fairness.
True (A)
Technological advancement always benefits all workers by creating more job opportunities.
Technological advancement always benefits all workers by creating more job opportunities.
Signup and view all the answers
Positive economics considers economic conditions 'as they should be'.
Positive economics considers economic conditions 'as they should be'.
Signup and view all the answers
Positive economics answers the question 'what is'.
Positive economics answers the question 'what is'.
Signup and view all the answers
Normative economics is concerned with human welfare.
Normative economics is concerned with human welfare.
Signup and view all the answers
Normative economics is also referred to as policy economics because it deals with the formulation of policies to regulate economic activities.
Normative economics is also referred to as policy economics because it deals with the formulation of policies to regulate economic activities.
Signup and view all the answers
The term 'economics' originates from the Greek words 'oikos', meaning system, and 'nomus', meaning household.
The term 'economics' originates from the Greek words 'oikos', meaning system, and 'nomus', meaning household.
Signup and view all the answers
Economics is the study of how we allocate abundant resources to meet our limited wants.
Economics is the study of how we allocate abundant resources to meet our limited wants.
Signup and view all the answers
Robert Heilbroner defined economics as a 'Worldly Philosophy', this refers to the study of daily activities related to production, wealth accumulation, income, spending, and saving.
Robert Heilbroner defined economics as a 'Worldly Philosophy', this refers to the study of daily activities related to production, wealth accumulation, income, spending, and saving.
Signup and view all the answers
Microeconomics focuses on the aggregate performance of the entire economic system, including topics like unemployment and inflation.
Microeconomics focuses on the aggregate performance of the entire economic system, including topics like unemployment and inflation.
Signup and view all the answers
Macroeconomics is concerned with the decisions made by individual economic agents, such as a single firm.
Macroeconomics is concerned with the decisions made by individual economic agents, such as a single firm.
Signup and view all the answers
Unemployment rate is a topic typically studied in macroeconomics.
Unemployment rate is a topic typically studied in macroeconomics.
Signup and view all the answers
A socialist economy prioritizes equitable distribution of income and wealth.
A socialist economy prioritizes equitable distribution of income and wealth.
Signup and view all the answers
Economists exclusively use empirical observation without economic theories to understand economic systems.
Economists exclusively use empirical observation without economic theories to understand economic systems.
Signup and view all the answers
The Philippine economy is purely a command economy.
The Philippine economy is purely a command economy.
Signup and view all the answers
The two main branches of economics are environmental economics and behavioral economics.
The two main branches of economics are environmental economics and behavioral economics.
Signup and view all the answers
Wealth only includes cash holdings.
Wealth only includes cash holdings.
Signup and view all the answers
Consumption refers to the satisfaction obtained from using goods and services.
Consumption refers to the satisfaction obtained from using goods and services.
Signup and view all the answers
Production is the process of combining land, labor, and capital to create outputs.
Production is the process of combining land, labor, and capital to create outputs.
Signup and view all the answers
A normative statement describes the world as it is.
A normative statement describes the world as it is.
Signup and view all the answers
Exchange exclusively involves trading goods for money.
Exchange exclusively involves trading goods for money.
Signup and view all the answers
Releasing a stimulus package to minimize the effect of global recession is a normative economic statement.
Releasing a stimulus package to minimize the effect of global recession is a normative economic statement.
Signup and view all the answers
Distribution is the exclusive domain of government agencies.
Distribution is the exclusive domain of government agencies.
Signup and view all the answers
In a purely traditional economy, families primarily produce for their own consumption.
In a purely traditional economy, families primarily produce for their own consumption.
Signup and view all the answers
Consumption is the creation of new goods and services.
Consumption is the creation of new goods and services.
Signup and view all the answers
In a command economy, resources are owned collectively, and the government dictates production.
In a command economy, resources are owned collectively, and the government dictates production.
Signup and view all the answers
A key feature of a market economy is that resources are privately owned and decisions are independently made.
A key feature of a market economy is that resources are privately owned and decisions are independently made.
Signup and view all the answers
Capitalism's basic characteristic is that the resources are collectively owned, and that the government makes the decisions.
Capitalism's basic characteristic is that the resources are collectively owned, and that the government makes the decisions.
Signup and view all the answers
In socialism, the state controls a large portion of capital assets and is often responsible for the distribution of essential goods.
In socialism, the state controls a large portion of capital assets and is often responsible for the distribution of essential goods.
Signup and view all the answers
In a socialist economy, private ownership is not recognized.
In a socialist economy, private ownership is not recognized.
Signup and view all the answers
Adam Smith is known as the 'Father of Political Science'.
Adam Smith is known as the 'Father of Political Science'.
Signup and view all the answers
Adam Smith's book, 'Wealth of Nations', was published in 1776 and became highly influential in the field of economics.
Adam Smith's book, 'Wealth of Nations', was published in 1776 and became highly influential in the field of economics.
Signup and view all the answers
David Ricardo was the successor to John Stuart Mill.
David Ricardo was the successor to John Stuart Mill.
Signup and view all the answers
Karl Marx's work, 'Das Kapital', greatly influenced socialist thought.
Karl Marx's work, 'Das Kapital', greatly influenced socialist thought.
Signup and view all the answers
Neoclassical economics emerged around the 1920s, focusing primarily on macroeconomic policies.
Neoclassical economics emerged around the 1920s, focusing primarily on macroeconomic policies.
Signup and view all the answers
John Maynard Keynes is considered a key figure in neoclassical economics.
John Maynard Keynes is considered a key figure in neoclassical economics.
Signup and view all the answers
Alfred Marshall developed the concept of 'marginalism' and contributed to the analysis of equilibrium in a particular market.
Alfred Marshall developed the concept of 'marginalism' and contributed to the analysis of equilibrium in a particular market.
Signup and view all the answers
Leon Walras is known for his analysis of equilibrium only in a single market.
Leon Walras is known for his analysis of equilibrium only in a single market.
Signup and view all the answers
John Maynard Keynes provided insight on unemployment and solutions for the interwar depression in his book 'The General Theory of Employment, Interest and Money'.
John Maynard Keynes provided insight on unemployment and solutions for the interwar depression in his book 'The General Theory of Employment, Interest and Money'.
Signup and view all the answers
Classical economists focused primarily on the forces determining the overall level of economic activity, according to Keynes.
Classical economists focused primarily on the forces determining the overall level of economic activity, according to Keynes.
Signup and view all the answers
The IS-LM model, analyzed by John Hicks, integrates the goods market (IS) and labor market (LM) to determine general equilibrium.
The IS-LM model, analyzed by John Hicks, integrates the goods market (IS) and labor market (LM) to determine general equilibrium.
Signup and view all the answers
In the IS-LM model, 'IS' represents the goods market for a given savings rate.
In the IS-LM model, 'IS' represents the goods market for a given savings rate.
Signup and view all the answers
The IS-LM model was developed during the Post-Keynesian period.
The IS-LM model was developed during the Post-Keynesian period.
Signup and view all the answers
Paul A. Samuelson and Milton Friedman are considered major neoclassical economists of the Post-Keynesian period.
Paul A. Samuelson and Milton Friedman are considered major neoclassical economists of the Post-Keynesian period.
Signup and view all the answers
Milton Friedman led the Keynesian stream of thought during the Post-Keynesian economics period.
Milton Friedman led the Keynesian stream of thought during the Post-Keynesian economics period.
Signup and view all the answers
Demand is typically influenced by consumer behavior, while supply is influenced by producer behavior.
Demand is typically influenced by consumer behavior, while supply is influenced by producer behavior.
Signup and view all the answers
Flashcards
Modern Technology in Production
Modern Technology in Production
Utilizing advanced methods to enhance product quantity and quality.
Effectiveness in Economics
Effectiveness in Economics
Attainment of goals and objectives using resources in production.
Equity in Economics
Equity in Economics
Justice and fairness in economic activities and outcomes.
Positive Economics
Positive Economics
Signup and view all the flashcards
Normative Economics
Normative Economics
Signup and view all the flashcards
Policy Economics
Policy Economics
Signup and view all the flashcards
Production Displacement
Production Displacement
Signup and view all the flashcards
Economic Goals
Economic Goals
Signup and view all the flashcards
Economics
Economics
Signup and view all the flashcards
Origin of Economics
Origin of Economics
Signup and view all the flashcards
Macroeconomics
Macroeconomics
Signup and view all the flashcards
Microeconomics
Microeconomics
Signup and view all the flashcards
Economic Theory
Economic Theory
Signup and view all the flashcards
Empirical Economics
Empirical Economics
Signup and view all the flashcards
Aggregate Performance
Aggregate Performance
Signup and view all the flashcards
Worldly Philosophy
Worldly Philosophy
Signup and view all the flashcards
Adam Smith
Adam Smith
Signup and view all the flashcards
Wealth of Nations
Wealth of Nations
Signup and view all the flashcards
Invisible Hand
Invisible Hand
Signup and view all the flashcards
John Stuart Mill
John Stuart Mill
Signup and view all the flashcards
Karl Marx
Karl Marx
Signup and view all the flashcards
Neoclassical Economics
Neoclassical Economics
Signup and view all the flashcards
Leon Walras
Leon Walras
Signup and view all the flashcards
Alfred Marshall
Alfred Marshall
Signup and view all the flashcards
Keynes' General Theory
Keynes' General Theory
Signup and view all the flashcards
IS-LM Model
IS-LM Model
Signup and view all the flashcards
Post-Keynesian Economics
Post-Keynesian Economics
Signup and view all the flashcards
Demand
Demand
Signup and view all the flashcards
Supply
Supply
Signup and view all the flashcards
Mass Unemployment
Mass Unemployment
Signup and view all the flashcards
Classical Political Economics
Classical Political Economics
Signup and view all the flashcards
Monetarism
Monetarism
Signup and view all the flashcards
Socialist Economy
Socialist Economy
Signup and view all the flashcards
Mixed Economy
Mixed Economy
Signup and view all the flashcards
Wealth
Wealth
Signup and view all the flashcards
Consumption
Consumption
Signup and view all the flashcards
Production
Production
Signup and view all the flashcards
Exchange
Exchange
Signup and view all the flashcards
Distribution
Distribution
Signup and view all the flashcards
Marketable Wealth
Marketable Wealth
Signup and view all the flashcards
Normative Statement
Normative Statement
Signup and view all the flashcards
Traditional Economy
Traditional Economy
Signup and view all the flashcards
Command Economy
Command Economy
Signup and view all the flashcards
Market Economy
Market Economy
Signup and view all the flashcards
Socialism
Socialism
Signup and view all the flashcards
Investor Confidence
Investor Confidence
Signup and view all the flashcards
Stimulus Package
Stimulus Package
Signup and view all the flashcards
Study Notes
Macroeconomics Overview
- Macroeconomics studies the overall performance of an economy
- It focuses on large-scale economic phenomena like unemployment, inflation, growth, and business cycles.
Origin of Economics
- Combining the Greek words "oikos" (household) and "nomos" (management)
- "Oikonomia" or "oikonomus" translates to "management of a household."
Introduction to Economics
- Economics studies the allocation of scarce resources to meet unlimited human wants
- It examines human behavior related to material well-being (individuals and societies)
Heilbroner's View
- Robert Heilbroner describes economics as a "world philosophy"
- It examines daily activities, specifically related to goods/services production, wealth accumulation, income, and future consumption.
Categories of Economics
- Microeconomics: concerns individual economic decision-making (firms, consumers, industries, etc.)
- Macroeconomics: focuses on the aggregate performance of the entire economy ( unemployment, inflation, etc)
Methods in Economics
- Economic theory: relies on principles to analyze economic agent behavior within rigorous mathematical models.
- Empirical economics: uses facts to describe economic activities through statistical analysis (econometrics).
Two Forms of Logic
- Inductive logic: creates principles from observations, common in sociology, psychology, and anthropology.
- Deductive logic: formulates and tests hypotheses, a primary method in economics.
Ceteris Paribus
- Economic assumption: "all other things being equal."
- Useful to isolate factors under examination.
Economic Goals, Policy, and Reality
- Positive economics: examines what is.
- Normative economics: examines what should be (economic goals).
- Policies formulated to achieve economic goals.
- Evaluation steps: stating goals, identifying options, and evaluating outcomes.
- Steps are dynamic, based on public opinion, and economic situation.
Economic Goals
- Efficiency
- Economic growth
- Economic freedom
- Economic security
- Equitable distribution of income
- Full employment
- Price level stability
- Trade balance.
Policy Formulation
- Public policy: guidelines, regulations, laws to achieve economic goals.
- Private policy: rules, regulations for company operations.
- Steps involved: defining goals, evaluating options, and evaluating the effectiveness of policies.
The 3 Es of Economics
- Efficiency: refers to productivity, proper allocation of scarce resources.
- Effectiveness: means achieving goals/objectives through optimal utilization of production methods.
- Equity: emphasizes fairness and justice in production and resource distribution.
Positive vs. Normative Economics
- Positive economics describes economic conditions as they are, objective statements, answering "what is?".
- Normative economics suggests what economic conditions should be, prescriptive, answering "what ought to be?".
Types of Economic Systems
- Traditional: a subsistence economy. production decisions made by households. based on traditions.
- Command: production (what, how, how much, for whom to produce) decisions dictated by the government.
- Market: Resources are privately owned; individuals make decisions on production and consumption.
- Socialism: key enterprises owned by the state, seeks equitable distribution; border between capitalism and communism
- Mixed: a combination of market and command (or traditional) systems, such as that in developing countries.
Important Economic Terms
- Wealth: anything of functional value, tradable for goods/services.
- Consumption: utilization of goods/services.
- Production: the creation of goods and services by combining land, labor, and capital.
- Exchange: trading or buying/selling goods and services.
- Distribution: allocates scarce resources, moving products to customers, often through intermediaries.
Brief Economic History
- Classical economics (mid-1700s to 1800s): Adam Smith, John Stuart Mill, David Ricardo
- Neoclassical economics (1870s): highlighted market efficiency, Leon Walras, Alfred Marshall.
- Keynesian economics (1930s): highlighted role of government intervention in response to economic crises, John Maynard Keynes.
- Non-Walrasian economics (1930s): explored the interaction between different macroeconomic markets with the IS-LM model development
- Post-Keynesian economics (1940s-50s): considered different approaches to macroeconomics post WWII
Basic Analysis of Demand and Supply
- Demand: the consumer's willingness and ability to buy goods/services at various prices.
- Supply: the producer's willingness and ability to sell goods/services at various prices.
- Market: the interaction between buyers and sellers.
- Demand schedule: a table showing quantities of goods demanded at different prices.
- Demand curve: a graph illustrating the relationships between price to quantity demanded.
- Inverse relationship between price and demand, depicted by a downward sloping curve.
- Market equilibrium: the point where supply equals demand.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
This quiz covers fundamental concepts in economics, including the impact of modern technology on product quality, effectiveness, and equity. It explores the distinctions between positive and normative economics while providing insights into the origins and definitions of economics. Test your understanding of these essential economic principles.
