Studied by 2 people
What is the definition of an economy?
The management of the goods and services of a community, country, etc., especially with a view to its production, distribution, and consumption.
What is economics?
The study of economy.
What are subsidies?
A sum of money granted by the state or a public body to help an industry or business keep the price of a commodity/service low.
What is a market?
A place or a situation where buyers and sellers communicate and exchange goods for money.
What are the basic components of an economy?
Needs of a society, resources available, production, consumption, distribution, economic ideologies & systems.
What are the two main types of resources?
Natural resources and human resources.
What are natural resources?
Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain.
How can natural resources be classified?
Into renewable & non-renewable, biotic or abiotic, ubiquitous or localized, and by ownership.
What are the four fundamental concepts concerning the economy of a place?
Production, consumption, distribution, economic ideologies & systems.
What influences consumption?
Market, political ideologies.
What is microeconomics?
The study of the behavior of basic elements in the economy in a small society, characterized by households and firms.
What is macroeconomics?
The study of how the economy of the whole society functions, addressing issues like national income, imports & exports, unemployment, and economic growth.
What is market equilibrium price?
The price at which the quantity of goods demanded equals the quantity of goods supplied.
What is a demand curve?
A graph that shows the inverse relationship between price and quantity demanded.
What factors affect demand for products?
Advertising, population demographics, tastes & fashion, price substitutes, prices of complements, interest rates, and income.
What is a supply curve?
A graph that shows the direct relationship between price and quantity supplied.
What factors affect the supply of goods?
Cost of production, indirect taxes, natural factors, prices of other goods, and changes in technology.
What is an economic boom?
A situation when the economy is growing at a faster rate than the long-run trend rate of economic growth.
What causes a recession?
Excessive debts, reduction in durable goods purchases, reduction of investment, and inventory reductions.
What is inflation?
A broad increase in the general price level in an economy of goods and services.
What is GDP?
Gross Domestic Product, the total revenue of all finished goods/services in a country during a particular time period.
What does GNP stand for?
Gross National Product, the revenue of all goods/services produced by all of a country's citizens and businesses.
What is GDP per capita?
The division of GDP by the population.
What does the Human Development Index (HDI) measure?
It ranks countries based on life expectancy, education, per capita income, and gender equality.
What is a mixed economy?
An economy that includes a variety of private and public control, reflecting characteristics of both capitalism and socialism.
What is a planned economy?
A system where the central government controls means of production and makes major economic decisions.
What is a green economy?
An environmentally friendly economy that promotes health, wealth, and well-being without compromising future generations.
How does income influence demand?
Higher income typically leads to higher demand if prices remain the same.
What happens when supply is greater than demand?
The price of the product/service tends to fall.
What happens when demand is greater than supply?
The price of the product/service tends to rise.
What is an economic ideology?
A series of beliefs about how an economy should be structured and run.
What does the term 'self-sufficient household' refer to?
A traditional economic system where people produce what they need, leading to slow development and minimal surplus.
What characterizes a market economy?
Prices are determined in a free price system with freedom of trade, competition, and private ownership.
