June P1 Med
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Questions and Answers

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

  • Decreasing economic growth
  • Gradual improvement in economic conditions
  • Peak economic performance before a potential downturn
  • High economic activity (correct)

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

  • Fluctuations in investment
  • Natural disasters (correct)
  • Technological changes
  • Variations in savings levels

    • What is the core challenge in economics?

  • Finite resources
  • Scarcity (correct)
  • Unlimited wants
  • Infinite desires

    • What is the term for the total demand for goods and services in the economy?

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

    What happens to employment during boom phases of a business cycle?

    <p>Job creation increases (D)</p> Signup and view all the answers

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

    <p>To allocate budget for public services (D)</p> Signup and view all the answers

    What is the primary concern of microeconomics?

    <p>Decisions of individuals and firms (D)</p> Signup and view all the answers

    What is the fundamental economic problem?

    <p>How to allocate limited resources to satisfy unlimited wants and needs (A)</p> Signup and view all the answers

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

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

    What is the primary goal of understanding business cycles?

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

    Which of the following is NOT a primary economic question?

    <p>How to increase profit? (D)</p> Signup and view all the answers

    What is the primary sector of the economy involved in?

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

    What is the focus of macroeconomics?

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

    What is the main purpose of exchange rates?

    <p>To facilitate international trade (A)</p> Signup and view all the answers

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

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

    What is the reason for the economic problem of scarcity?

    <p>Finite resources and infinite desires (C)</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 (C)</p> Signup and view all the answers

    What is the main goal of sustainable development?

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

    Which branch of economics examines the impact of government policies on the economy?

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

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

    <p>The ownership structure of businesses (B)</p> Signup and view all the answers

    What is the primary concern of economics?

    <p>Allocating resources to satisfy unlimited wants and needs (C)</p> Signup and view all the answers

    What is the role of entrepreneurship in the production process?

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

    What is the primary focus of Monetary Economics?

    <p>The role of money in the economy and its effects on economic variables (D)</p> Signup and view all the answers

    What is the main difference between Positive Economics and Normative Economics?

    <p>One focuses on describing and predicting economic phenomena, while the other involves value judgments (A)</p> Signup and view all the answers

    What is the primary function of households in the economy?

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

    What is the main difference between the formal and informal sectors?

    <p>The registration of businesses (D)</p> Signup and view all the answers

    What is the main challenge in economic research?

    <p>The difficulty in predicting human behavior (D)</p> Signup and view all the answers

    What is the main purpose of regulatory measures in achieving sustainable development?

    <p>To ban environmentally harmful activities (A)</p> Signup and view all the answers

    What is the definition of absolute scarcity?

    <p>A situation where resources are insufficient to produce a good despite its availability (B)</p> Signup and view all the answers

    What is the opportunity cost of a choice?

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

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

    <p>Economic goods require scarce resources to produce, while free goods are naturally available without cost (A)</p> Signup and view all the answers

    What is the primary function of economic models?

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

    What is the main characteristic of relative scarcity?

    <p>Resources are sufficient to satisfy needs but are inaccessible to most due to economic constraints (D)</p> Signup and view all the answers

    What is the scientific method in economics?

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

    What is the main approach of deductive reasoning in economics?

    <p>Developing hypotheses based on existing theories and testing them against empirical data (C)</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 (A)</p> Signup and view all the answers

    What is the movement of goods and services referred to as?

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

    What is the Goods Market primarily concerned with?

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

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

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

    What is the main difference between GDP and GNI?

    <p>GDP accounts for all income earned by nationals (D)</p> Signup and view all the answers

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

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

    What is the characteristic of a Leading Indicator?

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

    What is a Time Series in the context of business cycles?

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

    What is the characteristic of a Counter Cyclical Indicator?

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

    What is the primary challenge in economics?

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

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

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

    What is the primary economic question that determines who will receive the products and services created?

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

    Economics is primarily concerned with the study of how to:

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

    What is the primary focus of microeconomics?

    <p>The decisions of individuals and firms (C)</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 (A)</p> Signup and view all the answers

    What is the fundamental economic problem?

    <p>The distribution of limited resources (D)</p> Signup and view all the answers

    What is the reason for the importance of making decisions about resource allocation?

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

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

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

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

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

    What does the Production, Income, and Spending flow represent in the economy?

    <p>A continuous flow affecting resource and financial asset levels (B)</p> Signup and view all the answers

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

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

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

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

    What does per capita income calculation provide?

    <p>An average income per person (C)</p> Signup and view all the answers

    What is a characteristic of a Leading Indicator?

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

    What is the primary focus of understanding business cycles?

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

    What is a characteristic of a Counter Cyclical Indicator?

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

    What is the main purpose of time series analysis in the context of business cycles?

    <p>To analyze changes in economic activities over time (B)</p> Signup and view all the answers

    What is the primary sector of the economy involved in extraction of natural resources?

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

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

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

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

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

    What is the primary function of entrepreneurship in the production process?

    <p>Combining the other three factors to create goods and services (B)</p> Signup and view all the answers

    What is the main goal of sustainable development?

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

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

    <p>Collecting taxes and providing public services and infrastructure (B)</p> Signup and view all the answers

    What is the primary concern of macroeconomics?

    <p>The economy as a whole (B)</p> Signup and view all the answers

    What is the primary function of households in the economy?

    <p>Providing labor and receiving income (A)</p> Signup and view all the answers

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

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

    What is the primary function of businesses in the economy?

    <p>Hire labor and produce goods and services (D)</p> Signup and view all the answers

    What is the primary focus of Labour Economics?

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

    What is the characteristic of Economic Models?

    <p>They are used to test hypotheses and make economic predictions (C)</p> Signup and view all the answers

    What is the primary difference between Positive Economics and Normative Economics?

    <p>Positive Economics focuses on describing economic phenomena, while Normative Economics involves value judgments (D)</p> Signup and view all the answers

    What is the main challenge in economic research?

    <p>Economic research deals with human behaviors that are diverse and difficult to predict (B)</p> Signup and view all the answers

    What is the primary function of economic models?

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

    What is the main difference between absolute scarcity and relative scarcity?

    <p>Absolute scarcity occurs when resources are insufficient, while relative scarcity exists when resources are sufficient but inaccessible to most (B)</p> Signup and view all the answers

    What is the primary goal of understanding economic phenomena?

    <p>To develop theories and make predictions (C)</p> Signup and view all the answers

    What is the primary focus of International Economics?

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

    What is the opportunity cost of a choice?

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

    What is the primary approach of deductive reasoning in economics?

    <p>Developing hypotheses based on existing theories and testing them against empirical data (C)</p> Signup and view all the answers

    What is the primary difference between Aggregate Demand and Aggregate Supply?

    <p>Aggregate Demand is the total demand for goods and services, while Aggregate Supply is the total supply. (C)</p> Signup and view all the answers

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

    <p>A gradual improvement in economic conditions (B)</p> Signup and view all the answers

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

    <p>They are more affected by economic downturns due to reduced income and higher unemployment rates (B)</p> Signup and view all the answers

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

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

    What is the primary reason for understanding business cycles?

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

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

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

    What is the primary effect of business cycles on economic growth?

    <p>Business cycles lead to fluctuations in economic growth, with expansion phases leading to growth and contraction phases leading to declines (D)</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 (D)</p> Signup and view all the answers

    What is the central idea that underlies the study of economics?

    <p>The efficient allocation of scarce resources to satisfy unlimited wants and needs (A)</p> Signup and view all the answers

    What is the primary concern of macroeconomics?

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

    What is the primary impact of business cycles on employment?

    <p>Job creation increases during booms and decreases during recessions. (B)</p> Signup and view all the answers

    What is the fundamental economic problem that arises from the mismatch between unlimited wants and needs and limited resources?

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

    Which of the following is a consequence of inflation during expansion phases of business cycles?

    <p>Increased purchasing power (B)</p> Signup and view all the answers

    What is the primary function of individuals, governments, and societies in the context of economics?

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

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

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

    Which of the following is a primary economic question?

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

    What is the focus of understanding business cycles in economic planning and policymaking?

    <p>To anticipate and mitigate the adverse effects on the population (D)</p> Signup and view all the answers

    What is the focus of microeconomics?

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

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

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

    Which branch of economics examines the impact of government policies on the economy?

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

    What is the primary difference between aggregate demand and aggregate supply?

    <p>Aggregate demand represents total demand, while aggregate supply represents total supply (D)</p> Signup and view all the answers

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

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

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

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

    What is the primary function of Financial Institutions in the economy?

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

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

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

    What is the primary focus of the Goods Market?

    <p>Exchange of goods and services (B)</p> Signup and view all the answers

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

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

    What is the primary difference between GDP and GNI?

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

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

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

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

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

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

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

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

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

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

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

    What is a characteristic of a Leading Indicator?

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

    What is the primary goal of sustainable development?

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

    What is a Time Series in the context of business cycles?

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

    What is a characteristic of a Counter Cyclical Indicator?

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

    Which of the following is an example of entrepreneurship?

    <p>A person who starts a business (D)</p> Signup and view all the answers

    What is the primary difference between the public and private sectors?

    <p>The public sector is owned and controlled by the government (D)</p> Signup and view all the answers

    Which of the following is an example of a service?

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

    What is the primary function of households in the economy?

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

    What is the primary goal of regulatory measures in achieving sustainable development?

    <p>To curb environmentally harmful activities (C)</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 (B)</p> Signup and view all the answers

    What is the primary purpose of economic models?

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

    What is the key difference between positive and normative economics?

    <p>Positive economics focuses on describing and predicting economic phenomena, while normative economics involves value judgments (A)</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 (C)</p> Signup and view all the answers

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

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

    What is the main difference between absolute and relative scarcity?

    <p>Absolute scarcity occurs when resources are insufficient, while relative scarcity exists when resources are sufficient but inaccessible to most (B)</p> Signup and view all the answers

    What is the opportunity cost of a choice?

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

    What is the main characteristic of economic goods?

    <p>They require scarce resources to produce and thus people must pay to obtain them (B)</p> Signup and view all the answers

    What is the primary concern of Labour Economics?

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

    What is the primary function of deductive reasoning in economics?

    <p>Developing hypotheses based on existing theories and testing them against empirical data (A)</p> Signup and view all the answers

    Which factor of production involves human effort in the creation of products and services?

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

    What is the primary sector of the economy involved in extracting natural resources?

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

    What type of goods are long-lasting and can be used multiple times?

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

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

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

    What involves economic growth without depleting natural resources or harming human and environmental health?

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

    What is the main goal of understanding business cycles?

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

    What is the primary function of households in the economy?

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

    What is the core challenge in economics?

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

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

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

    Which of the following is NOT a primary economic question?

    <p>What is the impact of business cycles on exchange rates? (D)</p> Signup and view all the answers

    What is the primary concern of macroeconomics?

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

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

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

    What is the main challenge in achieving sustainable development?

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

    What is the primary goal of economic decision-making?

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

    What is the fundamental economic problem?

    <p>The allocation of resources (D)</p> Signup and view all the answers

    What is the main concern of macroeconomics?

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

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

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

    What is the focus of economic decision-making?

    <p>Satisfying unlimited wants and needs (C)</p> Signup and view all the answers

    Which branch of economics examines the role of money in the economy?

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

    What is the primary purpose of economic models?

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

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

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

    What is the primary challenge in economic research?

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

    Which of the following is an example of relative scarcity?

    <p>Inaccessible goods in many developing nations (A)</p> Signup and view all the answers

    What is the primary focus of International Economics?

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

    What is the primary goal of deductive reasoning in economics?

    <p>To test hypotheses against empirical data (C)</p> Signup and view all the answers

    What is the opportunity cost of a choice?

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

    What is the primary difference between Positive Economics and Normative Economics?

    <p>Objective vs. subjective (B)</p> Signup and view all the answers

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

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

    What is the primary function of the Factor Market?

    <p>Where factors of production are traded. (C)</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) (A)</p> Signup and view all the answers

    What is the primary difference between GDP and GNI?

    <p>GDP focuses on production, while GNI focuses on income. (A)</p> Signup and view all the answers

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

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

    What is the characteristic of a Leading Indicator in the context of business cycles?

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

    What is the primary function of Financial Institutions in the economy?

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

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

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

    What is the primary concern of macroeconomics?

    <p>The overall functioning of an economy, including issues such as inflation, unemployment, and economic growth. (C)</p> Signup and view all the answers

    What is the primary characteristic of a Time Series in the context of business cycles?

    <p>It is a collection of data collected over successive time intervals to track economic changes. (C)</p> Signup and view all the answers

    Which of the following internal economic factors can cause business cycles?

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

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

    <p>The Real Flow represents the movement of goods and services, while the Monetary Flow represents the movement of money. (A)</p> Signup and view all the answers

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

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

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

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

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

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

    What is the primary importance of understanding business cycles?

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

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

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

    Which of the following economic questions deals with the methods and technologies for production?

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

    What is the focus of microeconomics?

    <p>The decisions of individuals and firms. (A)</p> Signup and view all the answers

    What is the primary economic question that determines which goods and services should be produced?

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

    Which branch of economics studies the broader issues like unemployment, inflation, and economic growth?

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

    What is the primary challenge in economics due to the reality that resources are finite?

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

    What is the primary goal of economics as a social science?

    <p>To study how individuals, businesses, governments, and other organizations make decisions to allocate scarce resources (C)</p> Signup and view all the answers

    What is the primary impact of business cycles on employment?

    <p>Job creation increases during booms and decreases during recessions. (C)</p> Signup and view all the answers

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

    <p>They have limited access to social services and government support. (B)</p> Signup and view all the answers

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

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

    What is the primary factor that influences the value of a national currency during business cycles?

    <p>Economic strength or weakness (D)</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 (C)</p> Signup and view all the answers

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

    <p>Inflation increases during booms and decreases during recessions. (D)</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 (C)</p> Signup and view all the answers

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

    <p>A gradual improvement in economic conditions (B)</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 (D)</p> Signup and view all the answers

    What is the primary goal of economic models?

    <p>To simplify complex economic activities (C)</p> Signup and view all the answers

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

    <p>Sunlight (C)</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 inaccessible (D)</p> Signup and view all the answers

    What is the primary approach of inductive reasoning in economics?

    <p>Observing data to develop new theories (B)</p> Signup and view all the answers

    Which of the following is a characteristic of opportunity cost?

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

    What is the primary focus of Developmental Economics?

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

    Which of the following is a difficulty in economic research?

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

    What is the primary difference between Positive Economics and Normative Economics?

    <p>Positive Economics focuses on describing and predicting, while Normative Economics involves value judgments (B)</p> Signup and view all the answers

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

    <p>To test hypotheses using empirical data (B)</p> Signup and view all the answers

    What is the primary function of entrepreneurship in the production process?

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

    Which sector of the economy is involved in the extraction of natural resources?

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

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

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

    What is the primary focus of households in the economy?

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

    What is sustainable development primarily concerned with?

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

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

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

    What is the primary difference between the formal and informal sectors?

    <p>The formal sector is registered and contributes to GDP, while the informal sector is unregistered and does not contribute to GDP (B)</p> Signup and view all the answers

    What is the primary purpose of exchange rates?

    <p>To facilitate international trade by determining how much of one currency can be exchanged for another (D)</p> Signup and view all the answers

    What is the primary concern of macroeconomics?

    <p>The overall performance of an economy (D)</p> Signup and view all the answers

    What is the primary function of businesses in the economy?

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

    What is the primary function of Financial Institutions in the economy?

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

    What is the primary focus of the Goods Market?

    <p>Exchange of goods and services (A)</p> Signup and view all the answers

    What is the term for the movement of goods and services?

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

    What is the primary purpose of the Income Approach to calculate GDP?

    <p>To measure the total income earned from producing goods and services (A)</p> Signup and view all the answers

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

    <p>It does not account for wealth distribution (D)</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 (C)</p> Signup and view all the answers

    What is the characteristic of a Leading Indicator?

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

    What is the primary characteristic of a Counter Cyclical Indicator?

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

    What is the primary focus of macroeconomics?

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

    What is the primary purpose of understanding business cycles?

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

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