Chapitre 1 Flashcards
(25 cards)
What is the definition of economics?
Economics is the study of how individuals and societies allocate scarce resources to satisfy unlimited wants.
Define the concept of supply and demand.
Supply and demand is an economic model that describes how prices are determined in a market based on the quantity of a good or service available and the desire of consumers to purchase it.
What does GDP stand for?
GDP stands for Gross Domestic Product.
True or False: A higher GDP indicates a healthier economy.
True.
What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
Fill in the blank: The __________ is the total value of all goods and services produced in a country in a given year.
GDP
What are the main types of economic systems?
The main types of economic systems are traditional, command, market, and mixed economies.
What is the role of the government in a mixed economy?
In a mixed economy, the government regulates and intervenes in the market to correct market failures and provide public goods.
What is the law of diminishing returns?
The law of diminishing returns states that as more units of a variable input are added to a fixed input, the additional output produced will eventually decrease.
True or False: Unemployment is always a negative indicator of economic health.
False.
What is the difference between microeconomics and macroeconomics?
Microeconomics studies individual and business decisions, while macroeconomics looks at the economy as a whole.
What is market equilibrium?
Market equilibrium is the state where supply equals demand, resulting in a stable price.
Multiple choice: Which of the following is a primary goal of monetary policy? A) Control inflation B) Increase taxes C) Reduce government spending
A) Control inflation.
What is a monopoly?
A monopoly is a market structure where a single seller dominates the market with no close substitutes available.
Fill in the blank: __________ is the total amount of money a government owes to creditors.
National debt
What does fiscal policy involve?
Fiscal policy involves government spending and taxation decisions to influence the economy.
What is the purpose of tariffs?
Tariffs are taxes imposed on imported goods to protect domestic industries and raise revenue.
True or False: Economic growth is solely measured by increases in GDP.
False.
What is an externality?
An externality is a consequence of an economic activity that affects third parties who did not choose to be involved in that activity.
Multiple choice: Which of the following is an example of a public good? A) A sandwich B) National defense C) A smartphone
B) National defense.
What is the function of banks in the economy?
Banks facilitate the flow of money by accepting deposits, providing loans, and offering financial services.
Define opportunity cost.
Opportunity cost is the value of the next best alternative that is forgone when making a decision.
What is the significance of consumer confidence?
Consumer confidence reflects how optimistic or pessimistic consumers are regarding their expected financial situation and the overall economy, influencing spending behavior.
True or False: An increase in interest rates typically encourages borrowing.
False.
