Defnitions

Question 1

Define inflation

Answer 1

The sustained increase in general price level of goods and services in an economy over a period of time

Question 2

Define interest rates

Answer 2

The reward for saving and cost of borrowing money expressed as a percentage of the money saved or borrowed

Question 3

Define unemployment rate

Answer 3

Measures of people without a job who have been actively seeking work within the last four weeks

Question 4

Define economic growth

Answer 4

The increase in the real value of goods and services produced as measured by the annual percentage of change in real GDP

Question 5

Define GDP

Answer 5

A measure of the total value of all goods and services produced in an economy in a given period of time

Question 6

Define real GDP

Answer 6

An inflation adjusted measure that reflects the value of all goods and services produced in an economy

Question 7

Define budget deficit

Answer 7

Occurs when government spending is greater than tax revenues

Question 8

Budget surplus

Answer 8

Occurs when government tax revenues are greater than spending in a given fiscal year

Question 9

What is national debt

Answer 9

The amount of money that a country owes to its creditors

Question 10

What is a trade deficit

Answer 10

A country importing more goods and services than it is exporting

Question 11

Define trade surplus

Answer 11

A country is exporting. Ore goods and services than it is importing

Question 12

Define macroeconomics

Answer 12

the side of economics focusing on the performance and behaviour of an economy as a whole, rather than as individual people, markets or businesses

Question 13

Define microeconomics

Answer 13

The side of economics focusing on the behaviour of individuals and firms in the market

Question 14

Define demerit good

Answer 14

The products or services that are over consumed or consumed to a greater extent than is considered socially desirable from the perspective of society as a whole

Question 15

Define merit good

Answer 15

Goods and services the government feels that people will under-consume and which might be subsided or provided free at the point of use

Question 16

Define positive statements

Answer 16

One which is verifiable or testable using data

Question 17

Define normative statements

Answer 17

Statements that contain a value judgement and cannot be tested

Question 18

Define ceteris paribus

Answer 18

Everything else kept the same

Question 19

Define social science

Answer 19

The study of society and how people and things interact together

Question 20

Define value judgement

Answer 20

An assessment as to how good or bad something is in terms of one’s standards or priorities

Question 21

Define want

Answer 21

Something that is desired and not a necessity

Question 22

Define need

Answer 22

Something that is essential for a human to survive

Question 23

Define the basic economic problem

Answer 23

The fact that resources are limited and scarce but people have unlimited wants

Question 24

Define land

Answer 24

Any natural resource used to produce goods and services

Question 25

Define labour

Answer 25

A force of production that refers to the work people do to produce goods and services

Question 26

Define capital

Answer 26

The physical or financial resources used to produce value in an economy such as machinery

Question 27

Define enterprise

Answer 27

Having an idea of how to use the land, labour and capital to make a profit

Question 28

Define finite

Answer 28

Limited and will eventually run out

Question 29

Define scarcity

Answer 29

The demand for a good or service is greater that the availability of the good or service

Question 30

Define opportunity cost

Answer 30

The next best alternative foregone once a decision is made