June P1 Hard
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Questions and Answers

What is the fundamental reason behind the economic problem of resource allocation?

  • The unlimited nature of human wants and needs (correct)
  • The limited availability of financial resources
  • The unequal distribution of wealth in society
  • The inefficient use of technology in production

    • What is the primary focus of microeconomics?

  • The impact of government policies on the economy
  • The decisions of individuals and firms in the market (correct)
  • The overall functioning of an economy
  • The distribution of resources among different sectors of the economy

    • What is the main concern of macroeconomics?

  • The production decisions of firms
  • The behavior of individual consumers in the market
  • The overall performance of an economy, including issues like unemployment and inflation (correct)
  • The distribution of wealth among different social classes

    • What is the primary reason why resources are scarce?

    <p>The unlimited nature of human wants and needs</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

    What is the main objective of resource allocation in economics?

    <p>To allocate resources efficiently to meet the most important needs</p> Signup and view all the answers

    What is the primary challenge in economics?

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

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

    <p>The mismatch between unlimited human wants and needs, and limited resources</p> Signup and view all the answers

    What is the primary focus of International Economics?

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

    What type of economics involves value judgments and subjective perspectives?

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

    What is the term for the resources that 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 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 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 primary challenge in economic research due to the difficulty of controlling variables and predicting human behavior?

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

    Which type 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 is the term for the goods that are naturally available without cost, like sunlight and air?

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

    What is the systematic approach to research in economics?

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

    What is the primary function of entrepreneurship in the production of goods and services?

    <p>To combine the other three factors of production</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 term for the portion of income available for spending or saving after taxes?

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

    Which of the following is a key component of sustainable economic development?

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

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

    <p>To reduce environmental harm</p> Signup and view all the answers

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

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

    What is the main role 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 total value of goods and services produced within a country's borders?

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

    Which of the following is an example of a formal sector business?

    <p>Registered retail store</p> Signup and view all the answers

    What is the term for the exchange of goods and services without using money?

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

    What is the primary characteristic of the Recession phase in a business cycle?

    <p>Decreasing economic growth and output</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 effect 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 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

    Who are the most affected by business cycles?

    <p>Economically vulnerable populations</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 primary purpose of understanding business cycles?

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

    What is the relationship between inflation and business cycles?

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

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

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

    Which of the following represents the movement of goods and services?

    <p>Real 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 difference between GDP and GNI?

    <p>GDP is a measure of production, while GNI is a measure of income</p> Signup and view all the answers

    Which of the following indicators would move in the opposite direction of the economy during a contraction phase?

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

    What is the primary purpose of economic indicators in the context of business cycles?

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

    Which of the following 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 is the primary purpose of calculating per capita income?

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

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

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

    What is the primary purpose of time series data in the context of business cycles?

    <p>To track economic changes over successive time intervals</p> Signup and view all the answers

    What is the main distinction between monetary economics and public sector economics?

    <p>Monetary economics deals with the control of money in the economy, while public sector economics looks at the economic activities of government.</p> Signup and view all the answers

    What is the primary objective of developmental economics?

    <p>To promote economic development in less developed countries.</p> Signup and view all the answers

    Which of the following is an example of a normative statement in economics?

    <p>The government should increase the minimum wage.</p> Signup and view all the answers

    Which phase of the business cycle is characterized by a peak economic performance, but is also susceptible to a potential downturn?

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

    What is the primary reason why economically vulnerable populations are disproportionately affected by business cycles?

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

    What is the primary challenge in building economic models?

    <p>The difficulty of predicting human behavior.</p> Signup and view all the answers

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

    <p>Because of the limited availability of resources.</p> Signup and view all the answers

    What is the primary implication of the scarcity of resources in economics?

    <p>Choices must be made about how to allocate resources efficiently.</p> Signup and view all the answers

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

    <p>Natural disasters</p> Signup and view all the answers

    What is the impact of business cycles on aggregate demand?

    <p>Aggregate demand increases during expansion and decreases during contraction</p> Signup and view all the answers

    Which of the following is a consequence of the unlimited wants and needs of individuals?

    <p>The economic problem of scarcity arises, and choices must be made.</p> Signup and view all the answers

    What is the primary difference between absolute and relative scarcity?

    <p>Absolute scarcity occurs when resources are insufficient, while relative scarcity occurs when resources are sufficient but unaffordable.</p> Signup and view all the answers

    What is the primary focus of macroeconomics?

    <p>The overall functioning of an economy, including issues like unemployment and economic growth.</p> Signup and view all the answers

    What is the primary role of understanding business cycles in 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 primary function of economic models in understanding and predicting economic phenomena?

    <p>To simplify complex economic activities.</p> Signup and view all the answers

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

    <p>Gradual improvement in economic conditions</p> Signup and view all the answers

    What is the primary distinction between deductive and inductive reasoning in economics?

    <p>Deductive reasoning involves developing hypotheses based on existing theories, while inductive reasoning involves observing data to develop new theories.</p> Signup and view all the answers

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

    <p>Trade-offs must be made due to the scarcity of resources.</p> Signup and view all the answers

    What is the relationship between business cycles and economic growth?

    <p>Expansion phases lead to economic growth, while contraction phases lead to declines</p> Signup and view all the answers

    What is the relationship between the three primary economic questions?

    <p>They are mutually exclusive, and one cannot be answered without considering the others.</p> Signup and view all the answers

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

    <p>To systematic approach to research.</p> Signup and view all the answers

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

    <p>To efficiently allocate resources to satisfy unlimited wants and needs.</p> Signup and view all the answers

    What is the primary challenge in economic research due to human behavior?

    <p>The difficulty of controlling variables and predicting human behavior.</p> Signup and view all the answers

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

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

    Which of the following is a consequence of the dichotomy between infinite desires and finite means?

    <p>The economic problem of scarcity arises, and choices must be made.</p> Signup and view all the answers

    What is the primary role of economics in understanding the allocation of resources?

    <p>To develop a systematic understanding of how individuals, businesses, and governments make decisions.</p> Signup and view all the answers

    What is the primary function of entrepreneurship in the production of goods and services?

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

    What is the primary role 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 durable goods?

    <p>They are long-lasting goods</p> Signup and view all the answers

    What is the primary function of the tertiary sector of the economy?

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

    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 primary function of exchange rates in international trade?

    <p>To determine how much of one currency can be exchanged for another</p> Signup and view all the answers

    What is the primary characteristic of the informal sector of the economy?

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

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

    <p>To own and operate businesses</p> Signup and view all the answers

    What is the primary role of households in the economy?

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

    What is the primary function of the goods market in the economy?

    <p>To provide a platform for the trade of goods and services</p> Signup and view all the answers

    Which of the following is a limitation of GNI 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 primary purpose of using lagging indicators in economic analysis?

    <p>To confirm changes that have already occurred in the economy</p> Signup and view all the answers

    Which of the following is a characteristic of the production, income, and spending flow in the economy?

    <p>It is a continuous flow that affects stock levels of resources and financial assets</p> Signup and view all the answers

    What is the primary purpose of calculating per capita income in economic analysis?

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

    Which of the following is a characteristic of the Income Approach to calculating GDP?

    <p>It sums the total income earned from producing goods and services</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 ignores non-monetary transactions and informal economic activities</p> Signup and view all the answers

    What is the primary purpose of using time series data in the context of business cycles?

    <p>To track economic changes over successive time intervals</p> Signup and view all the answers

    Which of the following is a characteristic of counter-cyclical indicators?

    <p>They move in the opposite direction of the economy</p> Signup and view all the answers

    What is the primary focus of the Goods Market in the economy?

    <p>Exchange of goods and services among consumers and businesses</p> Signup and view all the answers

    Which of the following is a characteristic of the Real Flow in the economy?

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

    What is the primary limitation of using 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

    Which of the following is a characteristic of the Income Approach to calculate GDP?

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

    What is the primary purpose of using per capita income as a measure of economic activity?

    <p>To determine the average income per person in the economy</p> Signup and view all the answers

    Which of the following is a characteristic of a counter-cyclical indicator in the context of business cycles?

    <p>It moves in the opposite direction of the economy</p> Signup and view all the answers

    What is the primary purpose of using economic indicators in the context of business cycles?

    <p>To confirm changes that have already occurred in the economy</p> Signup and view all the answers

    What is the primary cause of fluctuations in aggregate demand during business cycles?

    <p>Changes in investment and technological advancements</p> Signup and view all the answers

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

    <p>It does not account for income earned by nationals abroad</p> Signup and view all the answers

    Which of the following groups is most vulnerable to the negative effects of business cycles?

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

    What is the primary consequence of a boom phase on economic growth?

    <p>Expansion of economic growth</p> Signup and view all the answers

    What is the primary focus of the Foreign Sector in the economy?

    <p>Exchange of goods and services with other countries</p> Signup and view all the answers

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

    <p>Gradual improvement in economic conditions</p> Signup and view all the answers

    Which of the following is a characteristic of the Monetary Flow in the economy?

    <p>Movement of money in exchange for goods and services</p> Signup and view all the answers

    What is the primary effect of exogenous factors on business cycles?

    <p>They influence the economy through external factors</p> Signup and view all the answers

    Which of the following is a limitation of understanding business cycles?

    <p>It is not effective in mitigating the adverse effects of economic downturns</p> Signup and view all the answers

    What is the primary role of aggregate supply in the context of business cycles?

    <p>It represents the total supply of goods and services</p> Signup and view all the answers

    What is the primary consequence of business cycles on price levels?

    <p>Price levels tend to rise during expansion and stabilize or fall during contractions</p> Signup and view all the answers

    What is the primary goal of economic decision-making in the face of scarcity?

    <p>To optimize resource allocation</p> Signup and view all the answers

    Which of the following is a characteristic of macroeconomic analysis?

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

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

    <p>To balance the fulfillment of diverse needs against available financial capacities</p> Signup and view all the answers

    Which of the following is a primary economic question?

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

    What is the primary challenge in making economic decisions?

    <p>Limited resources</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 primary objective of economic decision-making?

    <p>To optimize resource allocation</p> Signup and view all the answers

    What is the primary reason why scarcity arises?

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

    What is the primary distinction between economic models and economic theories?

    <p>Economic models are simplified representations of complex economic activities, while economic theories are general explanations of economic phenomena.</p> Signup and view all the answers

    What is the primary difference between positive and normative economics?

    <p>Positive economics is descriptive, while normative economics is prescriptive.</p> Signup and view all the answers

    What is the primary challenge in economic research due to the complexity of human behavior?

    <p>Human behavior is difficult to predict and diverse.</p> Signup and view all the answers

    What is the primary reason why economic models are critical in testing hypotheses and making economic predictions?

    <p>They are simplified representations of complex economic activities.</p> Signup and view all the answers

    What is the primary difference between absolute and relative scarcity?

    <p>Absolute scarcity refers to the lack of resources, while relative scarcity refers to the lack of access to resources.</p> Signup and view all the answers

    What is the primary role of entrepreneurship in the context of economic development?

    <p>To create new economic opportunities and drive innovation.</p> Signup and view all the answers

    What is the primary distinction between monetary economics and environmental economics?

    <p>Monetary economics focuses on the role of money in the economy, while environmental economics focuses on the economic implications of environmental degradation.</p> Signup and view all the answers

    What is the primary objective of labour economics?

    <p>To analyse the supply and demand for labour and how they affect wage levels and employment.</p> Signup and view all the answers

    Which sector of the economy is responsible for providing services rather than goods?

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

    What is the primary function of entrepreneurship in the production of goods and services?

    <p>To combine the other three factors of production</p> Signup and view all the answers

    What is the primary distinction between free goods and economic goods?

    <p>Free goods are naturally available without cost, while economic goods require scarce resources to produce.</p> Signup and view all the answers

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

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

    Which of the following is a key component of sustainable economic development?

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

    What is the term for the total value of goods and services produced within a country's borders?

    <p>Gross Domestic Product (GDP)</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 primary function of government in the circular flow model?

    <p>To collect taxes and provide public services</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 is the term for the exchange of goods and services without using money?

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

    Which of the following is a key component of the primary sector?

    <p>Extraction of natural resources</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 primary reason why individuals, businesses, governments, and other organizations need to make decisions about resource allocation?

    <p>Because resources are finite, yet human wants are unlimited</p> Signup and view all the answers

    Which of the following is a primary economic question that involves deciding how to allocate resources among different groups of people?

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

    What is the primary focus of macroeconomics?

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

    What is the underlying assumption that drives the need for resource allocation in economics?

    <p>That human wants are limited and finite</p> Signup and view all the answers

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

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

    What is the primary consequence of the scarcity of resources?

    <p>Choices must be made about which needs to prioritize</p> Signup and view all the answers

    What is the primary goal of resource allocation in economics?

    <p>To allocate resources efficiently to fulfill unlimited wants</p> Signup and view all the answers

    What is the underlying assumption that drives the need for decision-making in economics?

    <p>That resources are finite, yet human wants are unlimited</p> Signup and view all the answers

    What is the primary function of entrepreneurship in the production of goods and services?

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

    What is the main goal of supportive measures in promoting sustainable development?

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

    What is the primary function of the tertiary sector of the economy?

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

    What is the main challenge to achieving sustainable development?

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

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

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

    What is the primary objective of regulatory measures in promoting sustainable development?

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

    What is the main characteristic of the informal sector of the economy?

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

    What is the primary function of the public sector in the economy?

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

    What is the primary goal of sustainable economic development?

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

    What is the primary role of the Foreign Sector in the economy?

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

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

    <p>The Real Flow is the movement of goods and services, while the Monetary Flow is the movement of money</p> Signup and view all the answers

    What is the primary purpose of calculating GDP using the Expenditure Approach?

    <p>To measure 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 primary limitation of GDP as a measure of economic activity?

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

    What is the primary focus of Labour Economics?

    <p>The supply and demand for labour and how they affect wage levels and employment</p> Signup and view all the answers

    What is the primary role of leading indicators in understanding business cycles?

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

    What is the main difference between absolute and relative scarcity?

    <p>Absolute scarcity refers to the lack of resources, while relative scarcity refers to the lack of accessibility to resources</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 primary goal of economic models?

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

    What is the main challenge in economic research?

    <p>The difficulty of controlling variables and predicting human behavior</p> Signup and view all the answers

    What is the primary characteristic of the Goods Market?

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

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

    What is the primary approach of Positive Economics?

    <p>Describing and predicting economic phenomena without judgment, using objective analysis</p> Signup and view all the answers

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

    <p>Facilitating savings and providing loans</p> Signup and view all the answers

    What is the primary distinction between the Factor Market and the Goods Market?

    <p>The Factor Market is where factors of production are traded, while the Goods Market is where goods and services are exchanged</p> Signup and view all the answers

    What is the primary role of opportunity cost in economic decision-making?

    <p>To reflect the trade-offs involved in economic choices</p> Signup and view all the answers

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

    <p>Deductive reasoning involves developing hypotheses based on existing theories and testing them against empirical data, while inductive reasoning involves observing data to develop new theories</p> Signup and view all the answers

    What is the primary focus of Monetary Economics?

    <p>The role of money in the economy</p> Signup and view all the answers

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

    <p>To formulate a question, conduct investigations, and draw conclusions based on evidence</p> Signup and view all the answers

    What is the primary distinguishing feature of the Prosperity phase in a business cycle?

    <p>High economic activity, increasing employment, wages, and standards of living</p> Signup and view all the answers

    Which of the following exogenous reasons is most likely to lead to a contraction in aggregate demand?

    <p>Natural disasters</p> Signup and view all the answers

    What is the likely impact of a business cycle on the exchange rate of a country's currency?

    <p>The exchange rate will appreciate during boom phases and depreciate during recession phases</p> Signup and view all the answers

    Why are economically vulnerable populations disproportionately affected by business cycles?

    <p>Because they have a lower income and higher unemployment rates during 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 primary purpose of understanding business cycles?

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

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

    <p>Changes in savings levels</p> Signup and view all the answers

    What is the relationship between inflation and business cycles?

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

    What is the underlying assumption of the discipline of economics?

    <p>Resources are finite, and human wants are unlimited.</p> Signup and view all the answers

    Which of the following is a consequence of the economic problem of scarcity?

    <p>Individuals, governments, and societies must make decisions about resource allocation.</p> Signup and view all the answers

    What is the primary distinction between microeconomics and macroeconomics?

    <p>Microeconomics examines the behavior of individual entities, while macroeconomics studies the economy as a whole.</p> Signup and view all the answers

    Which of the following economic questions is most relevant to the production of goods and services?

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

    What is the primary goal of resource allocation in economics?

    <p>To allocate resources efficiently to satisfy unlimited human wants and needs.</p> Signup and view all the answers

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

    <p>Resources are finite, but human wants are unlimited.</p> Signup and view all the answers

    What is the main reason why individuals, governments, and societies must continuously make decisions about resource allocation?

    <p>To balance the fulfillment of diverse needs against available financial capacities.</p> Signup and view all the answers

    Which of the following is a consequence of the trade-off between competing needs and limited resources?

    <p>Choices must be made about which needs to prioritize and which to forgo.</p> Signup and view all the answers

    What is the primary characteristic of the Boom phase in a business cycle?

    <p>Peak economic performance before a potential downturn</p> Signup and view all the answers

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

    <p>Fluctuations in investment</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 stabilize during contractions</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

    Which of the following groups is most affected by business cycles?

    <p>Economically vulnerable populations</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

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

    <p>Natural disasters</p> Signup and view all the answers

    What is the impact of business cycles on economic growth?

    <p>Expansion phases lead to growth, while contraction phases lead to declines</p> Signup and view all the answers

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

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

    Which of the following sectors is involved in the extraction of natural resources?

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

    What is the primary distinction between durable and semi-durable goods?

    <p>Durable goods are long-lasting, while semi-durable goods are consumed immediately</p> Signup and view all the answers

    What is the primary purpose of regulatory measures in promoting sustainable development?

    <p>To reduce pollution and environmental degradation</p> Signup and view all the answers

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

    <p>It is not registered with the government</p> Signup and view all the answers

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

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

    What is the primary goal of sustainable economic development?

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

    What is the primary role of labour economics in the context of economic development?

    <p>To analyze the supply and demand for labour and its effect on wage levels and employment</p> Signup and view all the answers

    Which of the following is an example of a supportive measure in promoting sustainable development?

    <p>Subsidies for environmentally friendly practices</p> Signup and view all the answers

    What is the primary distinction between public sector economics and monetary economics?

    <p>Public sector economics deals with the role of money in the economy, while monetary economics examines the economic activities of government and its role in the economy</p> Signup and view all the answers

    What is the primary challenge to achieving sustainable development?

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

    What is the primary objective of inductive reasoning in economics?

    <p>To observe data to develop new theories</p> Signup and view all the answers

    What is the primary purpose of understanding the circular flow model?

    <p>To analyze the interactions between different economic agents and markets</p> Signup and view all the answers

    What is the primary characteristic of economic models?

    <p>They are simplified representations of complex economic activities designed to help understand and predict the interactions and outcomes of economic actions</p> Signup and view all the answers

    What is the primary challenge in economic research?

    <p>Controlling variables and predicting human behavior</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 primary goal of developmental economics?

    <p>To study the policies that promote economic development in less developed countries</p> Signup and view all the answers

    What is the primary distinction between absolute and relative scarcity?

    <p>Absolute scarcity occurs when resources are insufficient to produce a good, while relative scarcity occurs when 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 primary function of economic models in the context of economic research?

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

    What is the primary challenge in understanding the economic problem of scarcity?

    <p>Making choices due to the limited availability of resources</p> Signup and view all the answers

    Which of the following markets is concerned with the trading of factors of production?

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

    What is the primary focus of the Income Approach in calculating GDP?

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

    Which of the following is a limitation of both GDP and GNI?

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

    What is the primary characteristic of a leading economic indicator?

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

    What is the primary purpose of calculating per capita income?

    <p>To understand the economic well-being of the population as a whole</p> Signup and view all the answers

    Which of the following is a characteristic of a time series?

    <p>It is a collection of data collected over successive time intervals</p> Signup and view all the answers

    What is the primary focus of the Expenditure Approach in calculating GDP?

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

    Which of the following is a characteristic of the Real Flow in the circular flow model?

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

    What is the primary distinction 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

    Which of the following is a type of economic indicator that moves in the opposite direction of the economy during a contraction phase?

    <p>Counter-cyclic indicator</p> Signup and view all the answers

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