AI Notes

Question 1

What is macroeconomics?

Answer 1

The branch of economics that studies the behavior and performance of an economy as a whole.

Question 2

True or False: Macroeconomics only focuses on individual markets.

Answer 2

False

Question 3

What does GDP stand for?

Answer 3

Gross Domestic Product

Question 4

Fill in the blank: The __________ is the total value of all goods and services produced within a country in a given period.

Answer 4

GDP

Question 5

What is the difference between nominal GDP and real GDP?

Answer 5

Nominal GDP is measured at current market prices, while real GDP is adjusted for inflation.

Question 6

What is inflation?

Answer 6

The rate at which the general level of prices for goods and services is rising.

Question 7

True or False: A high inflation rate can erode purchasing power.

Answer 7

True

Question 8

What is unemployment?

Answer 8

The situation when individuals who are capable of working are unable to find a job.

Question 9

What does the term ‘business cycle’ refer to?

Answer 9

The fluctuations in economic activity that an economy experiences over a period of time.

Question 10

What are the four phases of the business cycle?

Answer 10

Expansion, peak, contraction, and trough.

Question 11

Fill in the blank: __________ is the sustained increase in the general price level of goods and services in an economy.

Answer 11

inflation

Question 12

What is fiscal policy?

Answer 12

Government policy that uses taxation and spending to influence the economy.

Question 13

What is monetary policy?

Answer 13

The process by which the central bank manages the money supply and interest rates.

Question 14

What is a budget deficit?

Answer 14

A situation where government expenditures exceed its revenues.

Question 15

What is a budget surplus?

Answer 15

A situation where government revenues exceed its expenditures.

Question 16

What does the term ‘aggregate demand’ refer to?

Answer 16

The total demand for all goods and services in an economy at a given overall price level.

Question 17

What does the term ‘aggregate supply’ refer to?

Answer 17

The total supply of goods and services that firms in an economy plan to sell during a specific time period.

Question 18

Fill in the blank: The __________ is the total amount of money available in an economy at a particular time.

Answer 18

money supply

Question 19

What is the role of the central bank?

Answer 19

To manage a nation’s monetary policy and regulate its banking system.

Question 20

What is a recession?

Answer 20

A significant decline in economic activity spread across the economy lasting more than a few months.

Question 21

True or False: A recession is characterized by falling GDP.

Answer 21

True

Question 22

What is the consumer price index (CPI)?

Answer 22

A measure that examines the weighted average of prices of a basket of consumer goods and services.

Question 23

What does the term ‘monetary inflation’ mean?

Answer 23

An increase in the money supply that leads to a decrease in the purchasing power of money.

Question 24

What is a trade balance?

Answer 24

The difference between the value of a country’s exports and imports.

Question 25

What is a trade deficit?

Answer 25

A situation where a country's imports exceed its exports.

Question 26

What is a trade surplus?

Answer 26

A situation where a country's exports exceed its imports.

Question 27

Fill in the blank: The __________ is the interest rate at which banks lend to each other overnight.

Answer 27

federal funds rate

Question 28

What is the purpose of economic indicators?

Answer 28

To provide information about the overall economic performance and trends.

Question 29

What are leading indicators?

Answer 29

Economic indicators that tend to change before the economy as a whole changes.

Question 30

What are lagging indicators?

Answer 30

Economic indicators that tend to change after the economy has already begun to follow a particular pattern.

Question 31

What is the significance of the unemployment rate?

Answer 31

It measures the percentage of the total workforce that is unemployed and actively seeking employment.

Question 32

True or False: A high unemployment rate is generally seen as a sign of a healthy economy.

Answer 32

False

Question 33

What is a fiscal stimulus?

Answer 33

Increased government spending and/or tax cuts aimed at boosting economic activity.

Question 34

What is an economic contraction?

Answer 34

A decline in national output as measured by GDP.

Question 35

Fill in the blank: __________ is the phenomenon where increased government spending leads to a reduction in private sector spending.

Answer 35

Crowding out

Question 36

What is the function of the International Monetary Fund (IMF)?

Answer 36

To promote international monetary cooperation and financial stability.

Question 37

What is the significance of exchange rates?

Answer 37

They determine how much one currency is worth in terms of another currency.

Question 38

What is the balance of payments?

Answer 38

A record of all economic transactions between residents of a country and the rest of the world.

Question 39

What does 'stagflation' refer to?

Answer 39

A situation characterized by stagnant economic growth, high unemployment, and high inflation.

Question 40

What is the Phillips Curve?

Answer 40

A concept that illustrates the inverse relationship between inflation and unemployment.