Theme 2 - 1st Learning Sequence - Introduction To Macroeconmoics.

Question 1

Government

Answer 1

The government sets the ‘rules of the game’ that economic agents must follow..
the government also produces some goods and services
The government can also provide support to businesses with subsidies.

Question 2

Consumers

Answer 2

Buyers of goods and services
Some economies are more economically reliant on consumers than others
The confidence of consumers can also have a large impact

Question 3

Central bank

Answer 3

Each country has a central bank that is responsible for setting interest rates and acting as a banker to banks.

Question 4

Retained profit

Answer 4

Retained profit is the amount of a business’s net income that is kept within its accounts, rather than paid out to shareholders. It is also a strong indicator of the long term financial stability of a business.

Question 5

Borrowing

Answer 5

Some firms may borrow Money to finance day-to-day operations or to fund investment

Question 6

Economic growth

Answer 6

The size of the economy determines the amount of goods and service available to citizens.
Expanding the size of the economy has come to be seen as a vital economic objective for governments.

Question 7

Inflation

Answer 7

A rise in the general price level for goods and services
High inflation erodes living standards