24 Questions
What is the study of how households and firms make decisions and how they interact in markets?
Microeconomics
Which subfield of economics studies economy-wide phenomena such as inflation, unemployment, and economic growth?
Macroeconomics
What does GDP stand for?
Gross Domestic Product
What does real GDP exclude to prevent double counting?
Intermediate Goods
What does economic growth refer to?
Increase in aggregate production
Why do economists use real GDP rather than nominal GDP to gauge economic well-being?
Real GDP accounts for changes in price levels
What is the difference between nominal GDP and real GDP?
Real GDP is unaffected by changes in prices, while nominal GDP reflects only changes in the amounts being produced
What is the impact of productivity on the standard of living?
High productivity leads to a high standard of living, while low productivity leads to a more meager existence
How is well-being usually measured in economics?
By real GDP per person
What is disposable income?
Income available after paying taxes and receiving transfers from the government
Which of the following statements is correct regarding disposable income?
Disposable income is the maximum amount of expenditure possible without having to borrow or sell possessions
Which of the following best defines microeconomics?
The study of how households and firms make decisions and interact in markets
What is the primary focus of macroeconomics?
The analysis of aggregate production and economy-wide phenomena
Why do economists use real GDP instead of nominal GDP to gauge economic well-being?
Nominal GDP is not adjusted for inflation
What does GDP exclude to prevent double counting?
Intermediate goods used in final production
What does economic growth refer to?
Increase in aggregate production in an economy over a period of time
What is the primary reason behind dividing economics into microeconomics and macroeconomics?
To examine economy-wide phenomena separately from individual decisions
What is the main reason economists use real GDP instead of nominal GDP to gauge economic well-being?
Real GDP captures changes in the amounts being produced, not affected by price changes.
What is the nominal GDP for the year 2018, based on the given data?
$600
Which factor does real GDP reflect that nominal GDP doesn't?
Changes in quantities produced
What is the main reason productivity is important in economics?
It determines the growth rate of average income.
What is the measure of well-being typically expressed in per-capita terms as an average income?
GDP per person
What does disposable income represent?
Income available after paying taxes and receiving transfers from the government.
Which statement accurately describes disposable income?
Disposable income is the maximum amount of expenditure possible without having to borrow or sell possessions.
Test your knowledge about the subfields of economics with this quiz. Learn about the distinction between microeconomics and macroeconomics and what each subfield encompasses.
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