June P1 Easy
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Questions and Answers

What is the primary function of the public sector?

  • To provide public services and infrastructure (correct)
  • To provide goods and services to private businesses
  • To extract natural resources
  • To create jobs for households

    • What is the main difference between durable and non-durable goods?

  • Durable goods are expensive, while non-durable goods are cheap
  • Durable goods are long-lasting, while non-durable goods are consumed immediately (correct)
  • Durable goods are consumed immediately, while non-durable goods are long-lasting
  • Durable goods are tangible, while non-durable goods are intangible

    • What is the purpose of exchange rates?

  • To determine the value of goods and services
  • To facilitate international trade by determining how much of one currency can be exchanged for another (correct)
  • To measure the economic growth of a country
  • To regulate the flow of money in the economy

    • What is the primary goal of sustainable economic development?

    <p>To conduct economic growth without depleting natural resources or harming human and environmental health</p> Signup and view all the answers

    What is the main challenge to achieving sustainable development?

    <p>Issues like pollution, greenhouse effects, and exploitation of labour</p> Signup and view all the answers

    What is the role of entrepreneurship in the economy?

    <p>To combine the other three factors to create goods and services</p> Signup and view all the answers

    What is the primary function of businesses in the circular flow model?

    <p>To hire labor and produce goods and services</p> Signup and view all the answers

    What is the main characteristic of the informal sector?

    <p>It includes unregistered businesses that are not included in official economic statistics</p> Signup and view all the answers

    What is the primary source of income for households?

    <p>Labor provided to businesses</p> Signup and view all the answers

    What is the main goal of regulatory measures in sustainable development?

    <p>To curb environmentally harmful activities</p> Signup and view all the answers

    What is the primary focus of economics?

    <p>The study of how individuals, businesses, governments, and other organizations make decisions to allocate scarce resources to satisfy their unlimited wants and needs.</p> Signup and view all the answers

    What is the core challenge in economics?

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

    What is the primary economic question that deals with deciding which goods and services should be produced?

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

    Which branch of economics focuses on the decisions of individuals and firms?

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

    What is the objective of making decisions about resource allocation in economics?

    <p>To distribute limited resources efficiently</p> Signup and view all the answers

    What is the fundamental economic problem?

    <p>How to distribute limited resources efficiently</p> Signup and view all the answers

    Which branch of economics addresses broad issues like unemployment, inflation, and economic growth?

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

    Why do individuals, governments, and societies need to make decisions about resource allocation?

    <p>Because of the dichotomy between infinite desires and finite means</p> Signup and view all the answers

    What is the main function of financial institutions in an economy?

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

    What is the Real Flow in the economy?

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

    What is the Goods Market?

    <p>Where goods and services are exchanged</p> Signup and view all the answers

    What is GDP?

    <p>The total market value of all final goods and services produced within a country's borders</p> Signup and view all the answers

    What is the Expenditure Approach to calculating GDP?

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

    What is GNI?

    <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 a limitation of GDP?

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

    What is a business cycle?

    <p>A natural fluctuation in economic activity over time</p> Signup and view all the answers

    What branch of economics studies the role of money in the economy?

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

    What is a leading indicator in a business cycle?

    <p>A signal that precedes future economic changes</p> Signup and view all the answers

    Which approach to economics involves making value judgments?

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

    What is a procyclical indicator in a business cycle?

    <p>An indicator that moves in the same direction as the economy</p> Signup and view all the answers

    What is the fundamental economic challenge?

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

    What type of scarcity occurs when resources are insufficient to produce a good?

    <p>Absolute Scarcity</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

    What is the purpose of economic models?

    <p>To test hypotheses and make economic predictions</p> Signup and view all the answers

    Which approach to economics involves observing data to develop new theories?

    <p>Inductive Reasoning</p> Signup and view all the answers

    What is the main difficulty in economic research?

    <p>Human behaviors are diverse and difficult to predict</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 scientific method used in economics?

    <p>Formulating a question, conducting investigations, and drawing conclusions</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 endogenous reason for business cycles?

    <p>Fluctuations in investment</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 the effect of business cycles on economically vulnerable populations?

    <p>They are disproportionately affected</p> Signup and view all the answers

    What is the primary purpose of understanding business cycles?

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

    What is the phase of the business cycle characterized by a gradual improvement in economic conditions?

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

    Which of the following is a characteristic of the boom phase of the business cycle?

    <p>Peak economic performance</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 sector of the economy involved in?

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

    Which of the following is a characteristic of the formal sector?

    <p>Includes all registered businesses</p> Signup and view all the answers

    What is the term for intangible products like banking and healthcare?

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

    Who are the main consumers of goods and services?

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

    What is the portion of income available for spending or saving after taxes?

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

    What is the role of government in sustainable development?

    <p>To impose bans and taxes on environmentally harmful activities</p> Signup and view all the answers

    What is the circular flow model used to illustrate?

    <p>The dynamics of the economy</p> Signup and view all the answers

    What is the primary function of households in the circular flow model?

    <p>To provide labor and receive income</p> Signup and view all the answers

    What is the term for the interconnections between different economic participants?

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

    What is the term for the extraction of natural resources?

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

    What is the primary reason for the existence of scarcity?

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

    Which of the following is NOT a primary economic question?

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

    Which branch of economics focuses on the overall functioning of an economy?

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

    What is the main goal of making decisions about resource allocation?

    <p>To distribute resources efficiently</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 focus of microeconomics?

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

    Which of the following is a consequence of scarcity?

    <p>The need for resource allocation</p> Signup and view all the answers

    What is the main reason for the existence of the economic problem?

    <p>The mismatch between infinite desires and finite resources</p> Signup and view all the answers

    Which branch of economics focuses on the economic activities of government and its role in the economy?

    <p>Public Sector Economics</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 primary goal of an economic model?

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

    Which of the following is a characteristic of positive economics?

    <p>Focuses on describing and predicting economic phenomena</p> Signup and view all the answers

    What is the main challenge in economic research?

    <p>Dealing with human behaviors</p> Signup and view all the answers

    What is the term for the limited availability of resources?

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

    What is the difference between absolute and relative scarcity?

    <p>Absolute scarcity is when resources are insufficient, relative scarcity is when resources are sufficient but inaccessible</p> Signup and view all the answers

    What is the term for goods that require scarce resources to produce?

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

    What is the primary reason why individuals and societies need to make choices?

    <p>Due to the limited availability of resources</p> Signup and view all the answers

    Which approach to economics involves making value judgments and subjective perspectives?

    <p>Normative economics</p> Signup and view all the answers

    What is the primary focus of studying business cycles?

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

    What is an example of an exogenous reason for business cycles?

    <p>Natural disasters</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 impact of business cycles on price levels?

    <p>Inflation tends to rise during expansion and can stabilize or fall during contractions</p> Signup and view all the answers

    Which phase of the business cycle is characterized by a downturn in economic growth?

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

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

    <p>They are disproportionately affected by economic downturns</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 phase of the business cycle characterized by peak economic performance?

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

    What is the primary function of the Foreign Sector?

    <p>To engage in trade, affecting imports and exports</p> Signup and view all the answers

    What is the Monetary Flow in the economy?

    <p>The movement of money in exchange for goods, services, and labor</p> Signup and view all the answers

    What is the Factor Market?

    <p>A market where factors of production are traded</p> Signup and view all the answers

    What is the Income Approach to calculating GDP?

    <p>The total income earned from producing goods and services</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 focuses on income earned by nationals</p> Signup and view all the answers

    What is the primary purpose of Per Capita Income calculation?

    <p>To understand the economic well-being of the average citizen</p> Signup and view all the answers

    What is the characteristic of a Leading Indicator in a business cycle?

    <p>It signals future economic changes before they occur</p> Signup and view all the answers

    What is the primary focus of understanding Business Cycles?

    <p>To analyze changes in economic activity</p> Signup and view all the answers

    What is the characteristic of a Procyclical Indicator in a business cycle?

    <p>It moves in the same direction as the economy</p> Signup and view all the answers

    What is the main advantage of understanding Business Cycles?

    <p>It helps to forecast economic trends and make informed decisions</p> Signup and view all the answers

    What is the underlying reason for the fundamental economic problem?

    <p>Finite resources and unlimited human wants</p> Signup and view all the answers

    What is the primary focus of microeconomics?

    <p>Individuals and firms</p> Signup and view all the answers

    Which economic question deals with determining the methods and technologies for production?

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

    What is the primary goal of resource allocation in economics?

    <p>To efficiently distribute limited resources</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

    Why do individuals, governments, and societies need to make decisions about resource allocation?

    <p>Because resources are finite</p> Signup and view all the answers

    What is the primary economic question that deals with deciding who will receive the products and services created?

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

    What is the core challenge in economics?

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

    What is the main focus of International Economics?

    <p>International trade and finance</p> Signup and view all the answers

    What is the main function of financial institutions in an economy?

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

    Which approach to economics involves making value judgments?

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

    What is the main purpose of economic models?

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

    What is the main characteristic of the Goods Market?

    <p>Where goods and services are exchanged</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 primary focus of the Expenditure Approach to calculating GDP?

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

    What is the main challenge in economic research?

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

    What is the main 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 is the fundamental economic problem?

    <p>Scarcity</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 by the country's nationals</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

    What is a leading indicator in a business cycle?

    <p>An indicator that signals future economic changes before they occur</p> Signup and view all the answers

    What is the primary focus of Labour Economics?

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

    What is the primary purpose of understanding business cycles?

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

    Which approach to economics involves developing hypotheses based on existing theories?

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

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

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

    What type of indicator moves in the same direction as the economy?

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

    What is the term for 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 main difficulty in economic research?

    <p>Developing theories that accurately reflect complex economic phenomena</p> Signup and view all the answers

    What is the primary function of government budget allocations?

    <p>To provide public services</p> Signup and view all the answers

    Which of the following is a factor of production?

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

    What is the primary focus of the tertiary sector?

    <p>Providing services</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

    Which phase of the business cycle is characterized by a peak economic performance before a potential downturn?

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

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

    <p>Clothing</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 goal of supportive measures in sustainable development?

    <p>To encourage environmentally friendly practices</p> Signup and view all the answers

    Which of the following is a characteristic of the informal sector?

    <p>Unregistered businesses</p> Signup and view all the answers

    What are exogenous reasons for business cycles?

    <p>Natural disasters, political events, and foreign trade dynamics</p> Signup and view all the answers

    What is the primary function of households in the circular flow model?

    <p>To provide labor and receive income</p> Signup and view all the answers

    Which phase of the business cycle is characterized by a gradual improvement in economic conditions?

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

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

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

    What is the primary focus of the secondary sector?

    <p>Manufacturing and processing</p> Signup and view all the answers

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

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

    What is the primary purpose of understanding business cycles?

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

    What is the primary goal of integrating economic principles with ethical considerations?

    <p>To achieve sustainable development</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

    What is the main function of the government in the economy?

    <p>To invest in public goods and services</p> Signup and view all the answers

    Which of the following is a characteristic of the tertiary sector?

    <p>Provides services rather than goods</p> Signup and view all the answers

    What is the primary factor of production that involves human effort?

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

    What is the term for the goods that are consumed immediately or shortly after purchase?

    <p>Non-durable goods</p> Signup and view all the answers

    Which sector of the economy involves the extraction of natural resources?

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

    What is the term for the circular flow of money and goods among households, businesses, and the government?

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

    What is the primary purpose of sustainable economic development?

    <p>To conduct economic growth without depleting natural resources</p> Signup and view all the answers

    Which sector of the economy involves the production of goods and services?

    <p>Private sector</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 businesses in the economy?

    <p>To hire labor and produce goods and services</p> Signup and view all the answers

    What is the primary reason why individuals, governments, and societies need to make decisions about resource allocation?

    <p>To satisfy unlimited wants and needs</p> Signup and view all the answers

    What is the main goal of economic decisions about resource allocation?

    <p>To distribute limited resources efficiently</p> Signup and view all the answers

    Which of the following is not a primary economic question?

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

    What is the focus of macroeconomics?

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

    What is the primary challenge in economics?

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

    What is the primary focus of microeconomics?

    <p>Individuals and firms</p> Signup and view all the answers

    Why do individuals, governments, and societies need to continuously make decisions about resource allocation?

    <p>Because of the dichotomy between infinite desires and finite means</p> Signup and view all the answers

    What is the outcome of the fundamental economic problem?

    <p>Forced choices about which needs to prioritize and which to forgo</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

    What is the primary reason exogenous factors influence the economy?

    <p>External factors such as natural disasters and political events</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 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 effect of business cycles on economically vulnerable populations?

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

    What represents the total market value of all final goods and services produced within a country's borders?

    <p>Gross Domestic Product (GDP)</p> Signup and view all the answers

    What is the Income Approach to calculating GDP?

    <p>Total income earned from producing goods and services</p> Signup and view all the answers

    What is the primary purpose of understanding business cycles?

    <p>To anticipate and mitigate the adverse effects of economic fluctuations on the population</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 does GNI measure?

    <p>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 primary difference between GDP and GNI?

    <p>GDP focuses on production within the country, while GNI accounts for all income by the nationals</p> Signup and view all the answers

    What is the phase of the business cycle characterized by a peak economic performance?

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

    What is the impact of business cycles on employment?

    <p>Employment increases during booms and decreases during recessions</p> Signup and view all the answers

    What is a limitation of GDP?

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

    What is a characteristic of leading indicators in a business cycle?

    <p>They signal future economic changes before they occur</p> Signup and view all the answers

    What is a procyclical indicator in a business cycle?

    <p>It moves in the same direction as the economy</p> Signup and view all the answers

    What is the primary purpose of understanding business cycles?

    <p>To make informed decisions about resource allocation</p> Signup and view all the answers

    What is the name of the flow that represents the movement of goods and services?

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

    What is the primary focus of Developmental Economics?

    <p>Examining policies to promote economic development in less developed countries</p> Signup and view all the answers

    What is the role of economic models in economics?

    <p>To describe and predict economic phenomena using data</p> Signup and view all the answers

    What is the primary difference between positive and normative economics?

    <p>Positive economics describes and predicts economic phenomena without judgment, while normative economics involves value judgments</p> Signup and view all the answers

    What is the primary challenge in economic research?

    <p>The difficulty of conducting controlled experiments</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 primary approach to economics used in developing new theories?

    <p>Inductive reasoning</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 characteristic of relative scarcity?

    <p>Resources are sufficient to satisfy needs but are inaccessible to most due to economic constraints</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

    What branch of economics focuses on the economic activities of government?

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

    Which of the following is NOT a factor of production?

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

    What is the primary goal of the tertiary sector?

    <p>Providing services rather than goods</p> Signup and view all the answers

    Which sector of the economy is involved in manufacturing and processing activities?

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

    What is the primary function of government in the economy?

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

    What is the main difference between semi-durable and non-durable goods?

    <p>Semi-durable goods last longer</p> Signup and view all the answers

    What is the branch of economics that focuses on 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 an example of a household?

    <p>A family living together</p> Signup and view all the answers

    What is the primary goal of supportive measures in sustainable development?

    <p>To provide incentives for environmentally friendly practices</p> Signup and view all the answers

    Which approach to economics 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 term for the simplified representations of complex economic activities designed to help understand and predict the interactions and outcomes of economic actions?

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

    What is the main challenge to achieving sustainable development?

    <p>Issues like pollution and exploitation of labor</p> Signup and view all the answers

    What is the primary function of the circular flow model?

    <p>To describe the movement of money and goods among various economic agents</p> Signup and view all the answers

    What is the main difficulty in economic 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 the goods that are naturally available without cost?

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

    Which of the following is a characteristic of the informal sector?

    <p>Includes unregistered businesses</p> Signup and view all the answers

    What is the fundamental economic problem?

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

    Which approach to economics involves making value judgments and subjective perspectives on what the economy should be like?

    <p>Normative Economics</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

    What is the primary purpose of economic models?

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

    Which approach to economics involves observing data to develop new theories?

    <p>Inductive reasoning</p> Signup and view all the answers

    What is the primary characteristic of the prosperity phase of a business cycle?

    <p>High economic activity, increasing employment, and wages</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 primary reason why individuals, governments, and societies need to make decisions about resource allocation?

    <p>To fulfill their unlimited wants and needs</p> Signup and view all the answers

    What is the main focus of macroeconomics?

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

    What is the effect of business cycles on price levels?

    <p>Inflation tends to rise during expansion and stabilize during contractions</p> Signup and view all the answers

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

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

    Which economic question deals with deciding who will receive the products and services created?

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

    What is the fundamental economic problem of how to distribute limited resources?

    <p>The scarcity of resources</p> Signup and view all the answers

    What is the primary purpose of 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 primary goal of economic decision-making?

    <p>To allocate resources efficiently</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

    Which branch of economics focuses on the overall functioning of an economy?

    <p>Macroeconomics</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

    What is the primary reason for the existence of economic scarcity?

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

    What is the term for the expansion phase of the business cycle that leads to economic growth?

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

    What is the main objective of making decisions about resource allocation?

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

    What is the primary function of Financial Institutions?

    <p>To provide loans and facilitate savings</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 the Income Approach to calculating GDP?

    <p>Total income earned from producing goods and services</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 by the nationals, regardless of where it is earned</p> Signup and view all the answers

    What is a limitation of GDP?

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

    What is a business cycle?

    <p>A natural fluctuation in economic activity that occurs over time</p> Signup and view all the answers

    What is a leading indicator in a business cycle?

    <p>An indicator that signals future economic changes before they occur</p> Signup and view all the answers

    What is the purpose of understanding business cycles?

    <p>To make informed economic decisions and forecasts</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 the primary sector of the economy involved in?

    <p>Resource extraction</p> Signup and view all the answers

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