What is economics

Question 1

What is economics?

Answer 1

Economics is the study of how individuals and societies allocate scarce resources to satisfy unlimited wants.

Question 2

True or False: Economics only deals with money.

Answer 2

False

Question 3

What are the two main branches of economics?

Answer 3

Microeconomics and Macroeconomics.

Question 4

Fill in the blank: Microeconomics focuses on ________ behavior.

Answer 4

individual

Question 5

What does macroeconomics study?

Answer 5

Macroeconomics studies the economy as a whole, focusing on aggregate outcomes like inflation, unemployment, and economic growth.

Question 6

What is the basic economic problem?

Answer 6

Scarcity

Question 7

True or False: Opportunity cost is the value of the next best alternative foregone.

Answer 7

True

Question 8

What is a market economy?

Answer 8

A market economy is an economic system where decisions regarding investment, production, and distribution are based on supply and demand.

Question 9

What role does government play in a mixed economy?

Answer 9

In a mixed economy, the government regulates and intervenes in economic activities to promote social welfare and correct market failures.

Question 10

Multiple Choice: Which of the following is NOT a factor of production? A) Land B) Labor C) Money D) Capital

Answer 10

C) Money

Question 11

What is the law of demand?

Answer 11

The law of demand states that, all else being equal, as the price of a good decreases, the quantity demanded increases, and vice versa.

Question 12

Fill in the blank: The intersection of the supply and demand curves determines the ________ price.

Answer 12

equilibrium

Question 13

What is inflation?

Answer 13

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

Question 14

True or False: GDP stands for Gross Domestic Product.

Answer 14

True

Question 15

What does GDP measure?

Answer 15

GDP measures the total value of all goods and services produced within a country over a specific time period.

Question 16

Multiple Choice: Which of the following is a component of GDP? A) Net Exports B) Taxes C) Stock Prices D) None of the above

Answer 16

A) Net Exports

Question 17

What is a recession?

Answer 17

A recession is a significant decline in economic activity across the economy lasting longer than a few months.

Question 18

Fill in the blank: The ________ curve illustrates the relationship between inflation and unemployment.

Answer 18

Phillips

Question 19

What is fiscal policy?

Answer 19

Fiscal policy refers to government spending and taxation decisions used to influence economic activity.

Question 20

True or False: Monetary policy is controlled by the government.

Answer 20

False

Question 21

What institution typically conducts monetary policy?

Answer 21

The central bank.

Question 22

What is the purpose of trade?

Answer 22

Trade allows countries to specialize in the production of goods and services they can produce most efficiently.

Question 23

Fill in the blank: Comparative advantage explains how countries can benefit from ________.

Answer 23

trade

Question 24

Multiple Choice: What type of economic system is characterized by communal ownership? A) Capitalism B) Socialism C) Feudalism D) Mercantilism

Answer 24

B) Socialism

Question 25

What is the role of entrepreneurs in an economy?

Answer 25

Entrepreneurs drive economic growth by creating new businesses, innovating, and providing jobs.

Question 26

True or False: Supply refers to the total amount of a good or service that producers are willing to sell at a given price.

Answer 26

True