3.1.1.1 Economic Activity

Question 1

What are the key economic decisions?

Answer 1

1. What to produce,
2. How to produce,
3. Who’s going to benefit from the goods and services produces.

Question 2

Tell me about the different economic groups.

Answer 2

Individuals - use their skills to provide goods and services,

Firms - groups of individuals that work together to provide goods and services,

Government - look to meet the needs of society by providing goods and services.

Question 3

What are consumers?

Answer 3

Consumers are people that use goods and services.

Question 4

Define Consumption Expenditure.

Answer 4

Consumption Expenditure aka consumption is the spending on goods and services by households.

Question 5

Define Household

Answer 5

Household consists of all those people living in a housing unit e.g. a flat or a house.

Question 6

What are producers?

Answer 6

Producers are individuals, groups or individuals or government, that supply goods and services.

Question 7

Define Production.

Answer 7

Production is the output created by producers.

Question 8

Define Government Revenue.

Answer 8

Government revenue is income that is received from a variety of sources especially taxation

Question 9

Define Government Expenditure.

Answer 9

Government Expenditure is how the government uses its income in order to fulfill its role.

Question 10

Define Economic Policy.

Answer 10

Economic policy covers a wide range of measures which governments use to manage their economy.

Question 11

What are the main economic objectives?

Answer 11

1. Maintaining full employment,
2. Ensuring price stability,
3. Achieving economic growth,
4. Having a strong balance of payments position.

Question 12

How does the government looks to meet the needs of society?

Answer 12

Spend on goods and services that it deems appropriate (many brought from producers and supplied to consumers)