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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?</p> Signup and view all the answers

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

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

    What is the reason for the economic problem?

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

    What is the outcome of the economic problem?

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

    Which of the following is NOT an economic question?

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

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

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

    What is the primary challenge faced by economic researchers?

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

    What is the fundamental economic problem?

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

    What is absolute scarcity?

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

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

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

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

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

    Which group of people is disproportionately affected by business cycles?

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

    What is the impact of business cycles on economic growth?

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

    What is the main function of financial institutions?

    <p>To facilitate savings and provide loans</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</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)</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</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</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 are economic indicators used for?

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

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

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

    What is the purpose of representing business cycles?

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

    What sector of the economy involves manufacturing and processing activities?

    <p>Secondary 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 development?

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

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

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

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

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

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

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

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

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

    What is the term for the scientific method used in economics?

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

    What is the main challenge faced by economic researchers?

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

    What is the focus of Labour Economics?

    <p>The supply and demand for labour</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 calculated in the Expenditure Approach to calculate GDP?

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

    What is the term for the average income per person in a country?

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

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

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

    What is the primary characteristic of business cycles?

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

    Why is understanding business cycles important?

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

    What is the primary goal of economic decision-making?

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

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

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

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

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

    What is the focus of macroeconomics?

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

    What is the common characteristic of economic wants and needs?

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

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

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

    What is the outcome of the economic problem?

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

    What is the primary reason for the economic problem?

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

    What characterizes 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 endogenous reason for business cycles?

    <p>Fluctuations in investment</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

    How do business cycles affect economically vulnerable populations?

    <p>They are disproportionately affected by economic downturns</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 benefit of understanding business cycles?

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

    What is the main goal of sustainable development?

    <p>To achieve economic growth without depleting natural resources</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</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</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</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 the primary reason for the existence of the economic problem?

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

    Which of the following is a characteristic of microeconomics?

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

    What is the primary goal of economic decision-making?

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

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

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

    What is the primary focus of macroeconomics?

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

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

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

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

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

    What are the two main flows in the economy?

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

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

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

    What is the primary benefit of understanding business cycles?

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

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

    <p>Technological changes</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 is the likely impact of business cycles on economic growth?

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

    Who is disproportionately affected by business cycles?

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

    Why are government and social services crucial during economic downturns?

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

    What is the primary concern of Labour Economics?

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

    Which of the following is an example of Relative Scarcity?

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

    What is the key characteristic of Economic Goods?

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

    Which of the following is NOT a branch of economics?

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

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

    <p>Circular flow model</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</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 the primary role of households in the economy?

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

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

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

    What is the primary focus of government budget allocations?

    <p>To affect the provision of public services</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

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

    <p>Tertiary sector</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.</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?</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.</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.</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.</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.</p> Signup and view all the answers

    What is the primary focus of macroeconomic analysis?

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

    What is the key characteristic of Normative Economics?

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

    What is the core challenge in economics?

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

    What is the main goal of Economic Models?

    <p>To describe and predict economic phenomena.</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</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

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

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

    What is the primary focus of Environmental Economics?

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

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

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

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

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

    What is the primary approach used in Economics to research?

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

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

    <p>Exploitation of natural resources</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.</p> Signup and view all the answers

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

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

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

    <p>Vehicle</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</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</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 is a limitation of GDP as a measure of economic activity?

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

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

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

    What is the primary benefit of understanding business cycles?

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

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

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

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

    <p>Fluctuations in investment</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</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</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</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 is the primary effect of expansion phases on price levels?

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

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

    <p>Boom</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</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</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</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</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

    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</p> Signup and view all the answers

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

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

    What is the primary focus of macroeconomics?

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

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

    <p>The Real Flow Model</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 formula used to calculate GDP using the Expenditure Approach?

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

    Which of the following is NOT a primary economic question?

    <p>How to allocate resources efficiently</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</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.</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 driving force behind the need for resource allocation?

    <p>Unlimited human wants</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.</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 the primary goal of economic models?

    <p>To predict economic phenomena</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.</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</p> Signup and view all the answers

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

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

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

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

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

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

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

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

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

    What is the opportunity cost of a choice?

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

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

    <p>Tertiary Sector</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 is the primary benefit of understanding business cycles?

    <p>To develop effective monetary and fiscal policies.</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</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 a time series in the context of business cycles?

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

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