Macroeconomics: Economic Growth and Inflation
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Questions and Answers

What is the primary focus of macroeconomics?

  • Individual markets and industries
  • Consumer surplus and producer surplus
  • The economy as a whole and national economies (correct)
  • Government policies to promote competition

    • What is the main implication of scarcity in economics?

  • Unlimited human wants and needs
  • Excess supply of goods and services
  • Limited availability of resources to meet unlimited human wants and needs (correct)
  • Unlimited availability of resources

    • What type of scarcity occurs when the demand for a good or service exceeds the supply?

  • Resource-induced scarcity
  • Supply-induced scarcity
  • Demand-induced scarcity (correct)
  • Economic-induced scarcity

    • What is the focus of microeconomics?

    <p>Individual markets and industries</p> Signup and view all the answers

    What is a key concept in microeconomics?

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

    What is the primary indicator of economic growth?

    <p>Growth rate</p> Signup and view all the answers

    What is the purpose of government policies in macroeconomics?

    <p>To stimulate economic growth and reduce unemployment</p> Signup and view all the answers

    What is the primary consequence of high interest rates on businesses?

    <p>Higher production costs</p> Signup and view all the answers

    What is the primary effect of a stable exchange rate on businesses?

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

    What phase of the business cycle is characterized by rapidly rising real GDP?

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

    What is the definition of inflation?

    <p>A sustained rise in prices of goods and services</p> Signup and view all the answers

    What is the primary determinant of interest rates?

    <p>Monetary policy of the central bank</p> Signup and view all the answers

    What happens to the economy when real output falls to negative in two consecutive quarters?

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

    During an economic boom, what is the effect on the banking sector?

    <p>Credit in the banking sector increases</p> Signup and view all the answers

    What is the primary role of banks in the economy?

    <p>Intermediation between savers and borrowers</p> Signup and view all the answers

    What is the term for the government's management of its revenues and expenditure?

    <p>Fiscal policy</p> Signup and view all the answers

    What happens to consumer spending and credit appetite during an economic recession?

    <p>Consumer spending decreases, credit appetite decreases</p> Signup and view all the answers

    What is the term for the sequence of events including economic boom, economic slowdown, economic recession, and economic recovery?

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

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