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Questions and Answers

What is the primary challenge in economics?

  • Scarcity (correct)
  • Government policies
  • Unlimited resources
  • Infinite desires

What is the fundamental economic problem?

  • How to distribute income
  • How to allocate limited resources efficiently (correct)
  • How to produce goods and services
  • How to increase resource availability

What is the focus of microeconomics?

  • Government policies and their impact
  • The decisions of individuals and firms (correct)
  • The overall functioning of an economy
  • International trade and finance

What is the primary question in economics related to production?

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

Which branch of economics studies the overall functioning of an economy?

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

What is the reason for the economic problem?

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

What is the outcome of the economic problem?

<p>Inefficient allocation of resources (B)</p> Signup and view all the answers

Which of the following is NOT an economic question?

<p>Why do humans have unlimited wants? (B)</p> Signup and view all the answers

Which branch of economics focuses on the role of money in the economy?

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

What is the main goal of economic models?

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

What is the key difference between positive and normative economics?

<p>Positive economics describes and predicts economic phenomena, while normative economics involves value judgments (C)</p> Signup and view all the answers

What is the primary challenge faced by economic researchers?

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

What is the fundamental economic problem?

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

What is absolute scarcity?

<p>When resources are insufficient to produce a good (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 type of good requires scarce resources to produce?

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

What is the scientific method used in economics?

<p>Formulating a question, conducting investigations, and drawing conclusions based on evidence (A)</p> Signup and view all the answers

What is the purpose of economic models in economics?

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

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

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

Which of the following is an exogenous reason for business cycles?

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

What is likely to happen to employment rates during a boom phase of the business cycle?

<p>They will increase (B)</p> Signup and view all the answers

Which group of people is disproportionately affected by business cycles?

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

What is the impact of business cycles on economic growth?

<p>It leads to fluctuations in growth (C)</p> Signup and view all the answers

What is the primary benefit of understanding business cycles?

<p>It enables anticipation of economic changes and implementation of measures to mitigate adverse effects (C)</p> Signup and view all the answers

What tends to happen to price levels during an expansion phase of the business cycle?

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

What is the main function of financial institutions?

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

What is the main difference between the real flow and monetary flow?

<p>Real flow refers to the movement of goods and services, while monetary flow refers to the movement of money (D)</p> Signup and view all the answers

What is the formula used in the Expenditure Approach to calculate GDP?

<p>GDP = C + I + G + (X - M) (A)</p> Signup and view all the answers

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

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

What is the main difference between GDP and GNI?

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

What are economic indicators used for?

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

What type of economic indicator signals future economic changes before they occur?

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

What is the purpose of representing business cycles?

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

What is a time series in the context of business cycles?

<p>Data collected over successive time intervals to track economic changes (B)</p> Signup and view all the answers

What is the primary function of Entrepreneurship in the economy?

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

What sector of the economy involves manufacturing and processing activities?

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

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

<p>Non-durable Goods (D)</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

What is a key component of sustainable development?

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

What is the term for businesses owned by individuals or corporations?

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

What is the term for the economy's circular flow model?

<p>Circular Flow Model (B)</p> Signup and view all the answers

Which economic participant provides labor and receives income used to purchase goods and services?

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

What is the primary role of the Government in the economy?

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

What is the term for unregistered businesses that are not included in official economic statistics?

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

What is the primary focus of Developmental Economics?

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

What type of reasoning 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 purpose of economic models?

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

What is the difference between Positive and Normative Economics?

<p>Positive Economics describes and predicts economic phenomena, while Normative Economics involves value judgments (B)</p> Signup and view all the answers

What is the term for the limitation of resources that compels individuals and societies to make choices?

<p>The Basic Economic Problem (C)</p> Signup and view all the answers

What is the term for goods that are naturally available without cost?

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

What is 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 term for the scientific method used in economics?

<p>The Systematic Approach (A)</p> Signup and view all the answers

What is the main challenge faced by economic researchers?

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

What is the focus of Labour Economics?

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

What is the primary function of financial institutions?

<p>To facilitate savings and provide loans (C)</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 calculated in the Expenditure Approach to calculate GDP?

<p>Total spending on final goods and services in the economy (A)</p> Signup and view all the answers

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

<p>It ignores non-monetary transactions and informal economic activities (D)</p> Signup and view all the answers

What does GNI measure?

<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 the term for the average income per person in a country?

<p>Per capita income (B)</p> Signup and view all the answers

What type of economic indicator signals future economic changes before they occur?

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

What is a time series in the context of business cycles?

<p>Data collected over successive time intervals to track economic changes (B)</p> Signup and view all the answers

What is the primary characteristic of business cycles?

<p>Unpredictable and irregular fluctuations in economic activity (B)</p> Signup and view all the answers

Why is understanding business cycles important?

<p>For economic planning and forecasting (D)</p> Signup and view all the answers

What is the primary goal of economic decision-making?

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

What is the core issue that gives rise to the economic problem?

<p>Unlimited wants and needs (A)</p> Signup and view all the answers

Which economic question deals with the distribution of goods and services?

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

What is the focus of macroeconomics?

<p>Overall economic functioning (C)</p> Signup and view all the answers

What is the common characteristic of economic wants and needs?

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

Which branch of economics examines the interactions of individuals and firms?

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

What is the outcome of the economic problem?

<p>Inefficient allocation of resources (C)</p> Signup and view all the answers

What is the primary reason for the economic problem?

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

What characterizes the prosperity phase of a business cycle?

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

Which of the following is an endogenous reason for business cycles?

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

How do business cycles affect economically vulnerable populations?

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

What is the primary benefit of understanding business cycles?

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

What tends to happen to price levels during an expansion phase of the business cycle?

<p>Price levels tend to increase (D)</p> Signup and view all the answers

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

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

What is the primary role of the land factor in the production of goods and services?

<p>To provide the natural resources necessary for production (C)</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 activities (D)</p> Signup and view all the answers

What is the main difference between the public and private sectors of the economy?

<p>The public sector is owned by the government, while the private sector is owned by individuals or corporations (A)</p> Signup and view all the answers

What is the main characteristic of durable goods?

<p>They are long-lasting goods that can be used for a long period of time (B)</p> Signup and view all the answers

What is the primary role of households in the economy?

<p>To provide labor and receive income used to purchase goods and services (D)</p> Signup and view all the answers

What is the main goal of sustainable development?

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

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

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

What is the main characteristic of the informal sector?

<p>Includes unregistered businesses that are not included in official economic statistics (C)</p> Signup and view all the answers

What is the primary role of entrepreneurship in the economy?

<p>To combine the other factors of production to create goods and services (D)</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 the primary reason for the existence of the economic problem?

<p>Unlimited human wants (A)</p> Signup and view all the answers

Which of the following is a characteristic of microeconomics?

<p>Examining the decisions of individuals and firms (B)</p> Signup and view all the answers

What is the primary goal of economic decision-making?

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

Which of the following economic questions is related to the allocation of resources?

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

What is the primary focus of macroeconomics?

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

What is the result of the mismatch between unlimited human wants and limited resources?

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

Which of the following is an example of an economic decision?

<p>Choosing a career (A)</p> Signup and view all the answers

What is the primary role of economic decision-making in scarce resource allocation?

<p>To distribute resources efficiently (C)</p> Signup and view all the answers

What is the main function of the foreign sector in the economy?

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

What are the two main flows in the economy?

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

What is the formula used in the Expenditure Approach to calculate GDP?

<p>GDP = C + I + G + (X - M) (A)</p> Signup and view all the answers

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

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

What is the purpose of calculating per capita income?

<p>To compare the economic well-being of different countries (A)</p> Signup and view all the answers

What type of economic indicator signals future economic changes before they occur?

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

What is the primary function of financial institutions in the economy?

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

What is the primary benefit of understanding business cycles?

<p>It enables policymakers to make informed decisions (D)</p> Signup and view all the answers

What is a time series in the context of business cycles?

<p>Data collected over successive time intervals to track economic changes (C)</p> Signup and view all the answers

What is the phase of the business cycle characterized by decreasing economic growth, output, and employment?

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

Which of the following is an example of an endogenous reason for business cycles?

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

What is the likely impact of business cycles on economic growth?

<p>Expansion phases lead to growing economic growth (C)</p> Signup and view all the answers

Who is disproportionately affected by business cycles?

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

What is the primary benefit of understanding business cycles?

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

What tends to happen to price levels during a contraction phase of the business cycle?

<p>Price levels tend to stabilize or fall (A)</p> Signup and view all the answers

Why are government and social services crucial during economic downturns?

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

What is the primary concern of Labour Economics?

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

Which of the following is an example of Relative Scarcity?

<p>Unaffordable goods in a developing nation (D)</p> Signup and view all the answers

What is the key characteristic of Economic Goods?

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

Which of the following is NOT a branch of economics?

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

What is the primary purpose of using inductive reasoning in economics?

<p>To develop new theories based on data (D)</p> Signup and view all the answers

Which of the following best describes the approach of Positive Economics?

<p>It focuses on describing and predicting economic phenomena (B)</p> Signup and view all the answers

What is the primary challenge in conducting economic research?

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

Which of the following is an example of an opportunity cost?

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

What is the primary purpose of using economic models?

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

Which of the following is NOT a characteristic of Normative Economics?

<p>It focuses on describing and predicting economic phenomena (B)</p> Signup and view all the answers

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

<p>To allocate resources efficiently and produce goods and services (C)</p> Signup and view all the answers

Which of the following is a characteristic of sustainable development?

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

What is the term for the economy's circular flow model?

<p>Circular flow model (C)</p> Signup and view all the answers

What is the primary difference between the primary sector and the secondary sector?

<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 term for the portion of income available for spending or saving after taxes?

<p>Disposable income (C)</p> Signup and view all the answers

What is the primary role of households in the economy?

<p>To provide labor and receive income used to purchase goods and services (A)</p> Signup and view all the answers

What is the term for businesses that are not included in official economic statistics?

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

What is the primary focus of government budget allocations?

<p>To affect the provision of public services (D)</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 (C)</p> Signup and view all the answers

Which sector of the economy involves providing services rather than goods?

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

What is the underlying assumption behind the concept of scarcity in economics?

<p>Human needs are unlimited, but resources are finite. (B)</p> Signup and view all the answers

Which of the following is NOT a primary economic question?

<p>How can we ensure sustainable economic growth? (A)</p> Signup and view all the answers

What is the key difference between microeconomics and macroeconomics?

<p>Microeconomics focuses on individual markets, while macroeconomics focuses on the overall economy. (C)</p> Signup and view all the answers

What is the relationship between unlimited human wants and finite resources?

<p>Unlimited human wants lead to competition for finite resources. (A)</p> Signup and view all the answers

Why is scarcity a pervasive problem in economics?

<p>Because human needs are unlimited, and resources are finite. (A)</p> Signup and view all the answers

What is the primary focus of Labour Economics?

<p>To analyze the supply and demand for labour and its effects on wage levels and employment. (A)</p> Signup and view all the answers

What is the primary focus of macroeconomic analysis?

<p>Aggregate economic variables such as GDP and inflation. (C)</p> Signup and view all the answers

What is the key characteristic of Normative Economics?

<p>It involves value judgments and subjective perspectives. (A)</p> Signup and view all the answers

What is the core challenge in economics?

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

Which of the following is a characteristic of the economic problem?

<p>Trade-offs between different goods and services. (A)</p> Signup and view all the answers

What is the primary challenge faced by Economic Researchers?

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

What is the main goal of Economic Models?

<p>To describe and predict economic phenomena. (A)</p> Signup and view all the answers

What is the primary characteristic that distinguishes the primary sector from the secondary sector?

<p>Involves extraction of natural resources (C)</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 (C)</p> Signup and view all the answers

Which of the following is a key challenge to achieving sustainable development?

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

What is the term for the total amount of money that households have available to spend or save after taxes?

<p>Disposable income (C)</p> Signup and view all the answers

What is the primary focus of Environmental Economics?

<p>To look at economic issues with environmental implications. (D)</p> Signup and view all the answers

What is the term for goods that are naturally available without cost?

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

Which economic participant provides goods and services and receives payment for them?

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

What is the primary approach used in Economics to research?

<p>The Scientific Method (A)</p> Signup and view all the answers

What is the term for the process of creating goods and services by combining land, labor, capital, and entrepreneurship?

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

What is the term for the study of the economic activities of government and its role in the economy?

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

Which of the following is NOT a characteristic of a sustainable economy?

<p>Exploitation of natural resources (A)</p> Signup and view all the answers

What is the primary focus of International Economics?

<p>To focus on international trade and finance, studying how countries interact economically. (C)</p> Signup and view all the answers

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

<p>Producing goods and services (C)</p> Signup and view all the answers

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

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

What is the term for the sector of the economy that provides intangible products like banking and healthcare?

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

Which of the following is a key component of the circular flow model?

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

Which of the following is a limitation of GDP as a measure of economic activity?

<p>It includes production by foreign entities within the country (A)</p> Signup and view all the answers

What is the main difference between the Real Flow and Monetary Flow?

<p>Real Flow refers to the movement of goods, while Monetary Flow refers to the movement of money (A)</p> Signup and view all the answers

Which approach to calculate GDP involves summing up the total income earned from producing goods and services?

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

What is the primary purpose of calculating per capita income?

<p>To understand the average income of a country's citizens (D)</p> Signup and view all the answers

Which type of economic indicator moves in the opposite direction of the economy?

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

What is the primary benefit of understanding business cycles?

<p>To make informed economic decisions (A)</p> Signup and view all the answers

What is the term for the natural fluctuations in economic activity that occur over time?

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

What is the primary function of financial institutions in the economy?

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

Which of the following is NOT a characteristic of business cycles?

<p>Increasing employment during contraction (A)</p> Signup and view all the answers

What is the primary implication of the recovery phase of a business cycle?

<p>There is a gradual improvement in economic conditions (D)</p> Signup and view all the answers

Which of the following is an internal economic factor that influences business cycles?

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

What is the primary effect of business cycles on economically vulnerable populations?

<p>Reduced income and higher unemployment rates (C)</p> Signup and view all the answers

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

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

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

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

What is the primary effect of expansion phases on price levels?

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

What is the term for the peak economic performance before a potential downturn?

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

What is the underlying reason for the existence of economic questions?

<p>Human wants are limitless, yet resources are limited (B)</p> Signup and view all the answers

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

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

Which of the following is NOT a characteristic of the prosperity phase of a business cycle?

<p>Decreasing economic growth (B)</p> Signup and view all the answers

Which of the following is a characteristic of the economic problem?

<p>Dichotomy between infinite desires and finite means (B)</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. (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 of natural resources, while the Secondary Sector involves manufacturing (B)</p> Signup and view all the answers

Which market is concerned with the exchange of factors of production?

<p>Factor Market (C)</p> Signup and view all the answers

What is the primary focus of macroeconomics?

<p>Broad issues like unemployment and economic growth (B)</p> Signup and view all the answers

What is the primary difference between exogenous and endogenous reasons for business cycles?

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

What is the term for the economy's circular flow model?

<p>The Real Flow Model (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 (D)</p> Signup and view all the answers

What is the formula used to calculate GDP using the Expenditure Approach?

<p>GDP = C + I + G + (X - M) (D)</p> Signup and view all the answers

Which of the following is NOT a primary economic question?

<p>How to allocate resources efficiently (C)</p> Signup and view all the answers

What is the primary focus of sustainable development?

<p>Economic growth that is conducted without depleting natural resources or harming human and environmental health (B)</p> Signup and view all the answers

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

<p>They suffer the most during economic downturns due to reduced income and higher unemployment rates. (B)</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 (A)</p> Signup and view all the answers

What is the driving force behind the need for resource allocation?

<p>Unlimited human wants (D)</p> Signup and view all the answers

What is the primary benefit of understanding business cycles for economic planning and policymaking?

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

What is the primary goal of economic models?

<p>To predict economic phenomena (D)</p> Signup and view all the answers

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

<p>It does not account for non-monetary transactions and informal economic activities. (A)</p> Signup and view all the answers

What is the primary role of the Government in the economy?

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

Which branch of economics examines the interactions between individuals and firms in the market?

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

What is the key difference between deductive and inductive reasoning in economics?

<p>Deductive reasoning involves developing hypotheses based on existing theories (C)</p> Signup and view all the answers

What is the relationship between aggregate demand and economic growth?

<p>High aggregate demand is a key driver of economic growth. (D)</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 earned by the country's nationals. (B)</p> Signup and view all the answers

What is the impact of business cycles on exchange rates?

<p>Economic strength or weakness can affect the value of the national currency. (A)</p> Signup and view all the answers

What is the purpose of calculating per capita income?

<p>To determine the average income per person in a country. (C)</p> Signup and view all the answers

What is the outcome of the economic problem?

<p>Individuals and governments must make choices about resource allocation (D)</p> Signup and view all the answers

What is the primary challenge faced by economists when conducting research?

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

What is the term for businesses owned by individuals or corporations?

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

What type of good is consumed immediately or shortly after purchase?

<p>Non-durable Goods (C)</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 underlying assumption of the economic problem?

<p>Resources are finite and limited (A)</p> Signup and view all the answers

What type of economic indicator signals future economic changes before they occur?

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

What is the opportunity cost of a choice?

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

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

<p>Economic goods require scarce resources, while free goods are naturally available (C)</p> Signup and view all the answers

What is the sector of the economy that provides services rather than goods?

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

What is the primary benefit of understanding business cycles?

<p>To develop effective monetary and fiscal policies. (B)</p> Signup and view all the answers

What is the term for unregistered businesses that are not included in official economic statistics?

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

What is the primary focus of Environmental Economics?

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

What is a time series in the context of business cycles?

<p>Data collected over successive time intervals to track economic changes. (B)</p> Signup and view all the answers

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

<p>To describe and predict economic phenomena (A)</p> Signup and view all the answers

What is the primary focus of studying business cycles?

<p>To develop strategies for mitigating the effects of business cycles. (C)</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 (D)</p> Signup and view all the answers

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