economics

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33 Terms

1
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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.

2
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What is economics?

The study of economy.

3
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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.

4
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What is a market?

A place or a situation where buyers and sellers communicate and exchange goods for money.

5
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What are the basic components of an economy?

Needs of a society, resources available, production, consumption, distribution, economic ideologies & systems.

6
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What are the two main types of resources?

Natural resources and human resources.

7
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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.

8
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How can natural resources be classified?

Into renewable & non-renewable, biotic or abiotic, ubiquitous or localized, and by ownership.

9
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What are the four fundamental concepts concerning the economy of a place?

Production, consumption, distribution, economic ideologies & systems.

10
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What influences consumption?

Market, political ideologies.

11
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What is microeconomics?

The study of the behavior of basic elements in the economy in a small society, characterized by households and firms.

12
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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.

13
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What is market equilibrium price?

The price at which the quantity of goods demanded equals the quantity of goods supplied.

14
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What is a demand curve?

A graph that shows the inverse relationship between price and quantity demanded.

15
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What factors affect demand for products?

Advertising, population demographics, tastes & fashion, price substitutes, prices of complements, interest rates, and income.

16
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What is a supply curve?

A graph that shows the direct relationship between price and quantity supplied.

17
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What factors affect the supply of goods?

Cost of production, indirect taxes, natural factors, prices of other goods, and changes in technology.

18
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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.

19
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What causes a recession?

Excessive debts, reduction in durable goods purchases, reduction of investment, and inventory reductions.

20
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What is inflation?

A broad increase in the general price level in an economy of goods and services.

21
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What is GDP?

Gross Domestic Product, the total revenue of all finished goods/services in a country during a particular time period.

22
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What does GNP stand for?

Gross National Product, the revenue of all goods/services produced by all of a country's citizens and businesses.

23
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What is GDP per capita?

The division of GDP by the population.

24
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What does the Human Development Index (HDI) measure?

It ranks countries based on life expectancy, education, per capita income, and gender equality.

25
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What is a mixed economy?

An economy that includes a variety of private and public control, reflecting characteristics of both capitalism and socialism.

26
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What is a planned economy?

A system where the central government controls means of production and makes major economic decisions.

27
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What is a green economy?

An environmentally friendly economy that promotes health, wealth, and well-being without compromising future generations.

28
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How does income influence demand?

Higher income typically leads to higher demand if prices remain the same.

29
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What happens when supply is greater than demand?

The price of the product/service tends to fall.

30
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What happens when demand is greater than supply?

The price of the product/service tends to rise.

31
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What is an economic ideology?

A series of beliefs about how an economy should be structured and run.

32
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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.

33
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What characterizes a market economy?

Prices are determined in a free price system with freedom of trade, competition, and private ownership.