18 Questions
What is the primary focus of macroeconomics?
The economy as a whole and national economies
What is the main implication of scarcity in economics?
Limited availability of resources to meet unlimited human wants and needs
What type of scarcity occurs when the demand for a good or service exceeds the supply?
Demand-induced scarcity
What is the focus of microeconomics?
Individual markets and industries
What is a key concept in microeconomics?
Elasticity
What is the primary indicator of economic growth?
Growth rate
What is the purpose of government policies in macroeconomics?
To stimulate economic growth and reduce unemployment
What is the primary consequence of high interest rates on businesses?
Higher production costs
What is the primary effect of a stable exchange rate on businesses?
Improved planning and forecasting
What phase of the business cycle is characterized by rapidly rising real GDP?
Recovery
What is the definition of inflation?
A sustained rise in prices of goods and services
What is the primary determinant of interest rates?
Monetary policy of the central bank
What happens to the economy when real output falls to negative in two consecutive quarters?
Economic recession
During an economic boom, what is the effect on the banking sector?
Credit in the banking sector increases
What is the primary role of banks in the economy?
Intermediation between savers and borrowers
What is the term for the government's management of its revenues and expenditure?
Fiscal policy
What happens to consumer spending and credit appetite during an economic recession?
Consumer spending decreases, credit appetite decreases
What is the term for the sequence of events including economic boom, economic slowdown, economic recession, and economic recovery?
Economic cycle
Test your understanding of key macroeconomic indicators, including economic growth rate and inflation, and their impact on consumer spending and the overall economy.
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