U2 AOS1 Lesson 1 – Introduction to Macroeconomics

Question 1

What is the primary focus of microeconomics?

Answer 1

Microeconomics focuses on individual consumers and firms, analyzing their decision-making processes and interactions in specific markets.

Question 2

True or False: Macroeconomics studies the economy as a whole, including national income, inflation, and unemployment rates.

Answer 2

True

Question 3

Fill in the blank: __________ is concerned with aggregate economic variables such as GDP and national employment levels.

Answer 3

Macroeconomics

Question 4

What are the main goals of macroeconomics?

Answer 4

The main goals of macroeconomics are to achieve economic growth, full employment, and price stability.

Question 5

What are the five sectors involved in the flow of income?

Answer 5

Households, Businesses, Government, Financial Institutions, and Foreign Sector.

Question 6

Fill in the blank: The sector that provides goods and services in exchange for income is the ____ sector.

Answer 6

Business.

Question 7

Which sector is responsible for collecting taxes and providing public services?

Answer 7

Government.

Question 8

Multiple Choice: Which of the following sectors is primarily involved in facilitating savings and investments? A) Households B) Financial Institutions C) Government D) Foreign Sector

Answer 8

B) Financial Institutions.

Question 9

True or False: Leakages in the circular flow of income can include savings, taxes, and imports.

Answer 9

True.

Question 10

Fill in the blank: Injections into the circular flow of income include ______, government spending, and exports.

Answer 10

investment.

Question 11

Which of the following is NOT considered a leakage? A) Savings B) Taxes C) Government spending

Answer 11

C) Government spending.

Question 12

Explain how injections affect the circular flow of income.

Answer 12

Injections increase the total income in the economy, stimulating production and employment.

Question 13

True or False: Injections into the economy include government spending and investments.

Answer 13

True

Question 14

Fill in the blank: Injections increase aggregate demand, while __________ decrease it.

Answer 14

leakages

Question 15

What is the primary effect of increased injections on the level of economic activity?

Answer 15

Increased injections lead to higher aggregate demand and stimulate economic activity.

Question 16

Multiple choice: Which of the following is NOT considered a leakage? A) Savings B) Taxes C) Government spending D) Imports

Answer 16

C) Government spending