economics

Question 1

what’s inflation

Answer 1

the most commonly used measure of inflation is the consumer price index, or CPI. changes in these price indices indicate changes in the purchasing power of the dollar. Inflation is a general increase in the level of prices throughout the economy. The reserve bank considers an inflation rate of between 2-3% a healthy level.

Question 2

effects of inflation

Answer 2

-unanticipated inflation erodes the purchasing power of all assets, including money, bonfs, and savings accounts individuals with fixed incomes are also affected
-a high average rate of inflation is always accompanied by much uncertainty about the future inflation rate
-greater levels of risks increases the value of the “option to wait” which delays many consumption and investment decisions, and thereby slows economy growth

Question 4

What is inflation?

Answer 4

Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.

Question 5

True or False: Inflation can lead to a decrease in the value of money.

Answer 5

True

Question 6

Fill in the blank: The Consumer Price Index (CPI) is a commonly used measure of __________.

Answer 6

inflation

Question 7

Which of the following is a cause of inflation? A) Increased demand B) Decreased supply C) Both A and B

Answer 7

C) Both A and B

Question 8

What is hyperinflation?

Answer 8

Hyperinflation is an extremely high and typically accelerating rate of inflation, often exceeding 50% per month.

Question 10

What is inflation?

Answer 10

Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.

Question 11

True or False: Inflation can lead to decreased purchasing power.

Answer 11

True

Question 12

Fill in the blank: Inflation typically results in __________ of money.

Answer 12

devaluation

Question 13

What effect does inflation have on interest rates?

Answer 13

Inflation typically leads to higher interest rates as lenders seek to maintain their purchasing power.

Question 14

Which group is most negatively affected by inflation?

Answer 14

Fixed-income earners are most negatively affected by inflation.

Question 15

Multiple Choice: Which of the following is a common cause of inflation? A) Increased supply of goods B) Decreased demand for services C) Rising production costs D) Stable prices

Answer 15

C) Rising production costs

Question 16

What is hyperinflation?

Answer 16

Hyperinflation is an extremely high and typically accelerating inflation rate, often exceeding 50% per month.

Question 17

True or False: Inflation can stimulate economic growth.

Answer 17

True

Question 18

What is the effect of inflation on savings?

Answer 18

Inflation erodes the real value of savings, meaning that the purchasing power of saved money decreases over time.

Question 19

Fill in the blank: Inflation can lead to __________ in the cost of living.

Answer 19

an increase

Question 20

What does GDP stand for?

Answer 20

Gross Domestic Product

Question 21

True or False: GDP measures the total value of all goods and services produced within a country’s borders in a specific time period.

Answer 21

True

Question 22

Fill in the blank: GDP can be calculated using the _____ approach, which sums up consumption, investment, government spending, and net exports.

Answer 22

expenditure

Question 23

What are the three main ways to calculate GDP?

Answer 23

Production approach, income approach, and expenditure approach

Question 24

Multiple Choice: Which of the following is NOT included in GDP calculations? A) Government spending B) Household consumption C) Illegal drug sales D) Business investments

Answer 24

C) Illegal drug sales

Question 25

What is the difference between nominal GDP and real GDP?

Answer 25

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

Question 26

True or False: An increase in GDP always indicates an improvement in the standard of living.

Answer 26

False

Question 27

What is the GDP per capita?

Answer 27

GDP per capita is the total GDP divided by the population of a country.

Question 28

Fill in the blank: A country experiencing a recession typically sees a _____ in GDP.

Answer 28

decline

Question 29

Multiple Choice: Which sector is typically the largest contributor to GDP in developed economies? A) Agriculture B) Services C) Manufacturing D) Mining

Answer 29

B) Services

Question 30

What is the definition of unemployment?

Answer 30

Unemployment is the situation when individuals who are capable of working are unable to find a job.

Question 31

True or False: The unemployment rate is calculated as the number of unemployed individuals divided by the total labor force.

Answer 31

True

Question 32

Fill in the blank: __________ unemployment occurs due to a mismatch between the skills of workers and the skills needed for available jobs.

Answer 32

Structural

Question 33

What type of unemployment is typically associated with economic downturns?

Answer 33

Cyclical unemployment

Question 34

Which of the following is NOT a type of unemployment? A) Frictional B) Structural C) Seasonal D) Optional

Answer 34

D) Optional

Question 35

Short answer: What is frictional unemployment?

Answer 35

Frictional unemployment refers to the short-term unemployment that occurs when people are between jobs or entering the labor market.

Question 36

What is the name of the organization that typically measures and reports unemployment rates in the United States?

Answer 36

U.S. Bureau of Labor Statistics (BLS)

Question 37

True or False: The natural rate of unemployment includes both frictional and structural unemployment.

Answer 37

True

Question 38

Multiple Choice: Which of the following factors can lead to increased unemployment? A) Economic growth B) Technological advancements C) Recessions D) Increased consumer spending

Answer 38

C) Recessions

Question 39

Short answer: What is seasonal unemployment?

Answer 39

Seasonal unemployment occurs when individuals are unemployed at certain times of the year when demand for labor is lower, such as in agriculture or tourism.

Question 40

what's scarcity

Answer 40

when supply of a resource cannot meet demand

Question 41

what's a producer

Answer 41

someone who creates and supplies goods or services

Question 42

what do producers do

Answer 42

combine factor input to create (output) something else

Question 43

what's primary sector

Answer 43

it refers to parts of the economy that contain industries that either extract or produce raw materials. this can include minerals, wood, fruit and vegtables ect.

Question 44

what is SECONDARY SECTOR

Answer 44

it refers to parts of the economy that transforms the raw materials and components into goods.

Question 45

what is territory sector

Answer 45

this refers to the part of economy that contains industries that supply services to businesses and consumers

Question 46

what are goods

Answer 46

physical objects (tangible) that have a price in the market. e.g food, clothing, machines, houses

Question 47

what is services

Answer 47

not physical objects(intangible) that re paid for and received. e.g a flight, a haircut, lawn mowing

Question 48

dealing with economic problem

Answer 48

unlimited wants, scarcity, limited resources

Question 49

(how a market deals with the economic problem) what to produce

Answer 49

limited resources will go towards whatever products consumers are demanding

Question 50

(how a market deals with the economic problem) how to produce

Answer 50

the producer (business owner) decides how to produce whatever it is consumers want by seeking to maximise profit and minimising production cost

Question 51

(how a market deals with the economic problem) who to produce for

Answer 51

this problems deals with the issue of deciding the category of people who will consume the goods. e.g- how much will pay staff, how much will go to taxes

Question 52

what is economic resources

Answer 52

they are the inputs we use to produce goods and services. also can be divided into 4 categories, labour, land or natural resources, capital, entrupunership

Question 53

what is land

Answer 53

it includes any natural resources

Question 54

what's labour

Answer 54

the effort humans contribute

Question 55

whats capital

Answer 55

it includes machinery, tools and buildings

Question 56

what's entrepreneurship

Answer 56

combines land labour and capital in new ways