1: Economic Issues and Concepts

Aging populations

A demographic trend where the growth of the labor force slows due to an increasing number of older individuals.

Climate change adaptation

How economies modify practices to meet sustainability needs and deal with the consequences of adverse weather events.

Productivity growth decline

A situation where the output of goods and services is decreasing, raising concerns about economic health.

Technological change

The process through which economies integrate new technologies and AI, often accompanied by job disruption.

Protectionism

Economic policy aimed at shielding a country's industries from foreign competition by imposing trade barriers.

Income inequality

The disparity in income distribution among individuals in an economy, raising debates on equity.

Government debt sustainability

Concerns over whether current government spending levels are manageable or lead to excessive debt.

Scarcity

The fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

Factors of Production

Resources used in the production of goods and services, including land, labor, capital, and entrepreneurship.

Opportunity cost

The value of the next best alternative that must be forgone when making a choice.

Production Possibilities Boundary

A curve illustrating the maximum output combinations of two goods given available resources.

Ceteris paribus

A Latin phrase meaning 'all other things being equal', used in economic analysis to isolate relationships.

Market Economy

An economic system where supply and demand determine prices, with minimal government intervention.

Circular flow of income

The economic model illustrating the movement of money, goods, and services between producers and consumers.

Mixed economies

Economic systems combining elements of traditional, command and market economies, incorporating both private and state control.

Consumer choice

Decisions made by individuals regarding the purchase of goods and services, constrained by budget limitations.

Inflation

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

Economic growth

An increase in the production of goods and services in an economy over a specific period.

Government regulation

Rules established by the government aimed at controlling economic activity for the public good.

Specialization and trade

The economic principle where individuals or entities focus on a limited range of activities to increase efficiency and productivity.

Invisible hand theory

The concept that the self-regulating nature of a free market leads to economic efficiency.

What is an 'aging population' in economic terms?

It is a demographic trend characterized by a slowdown in labor force growth due to an increasing proportion of older individuals in the population.

How do economies demonstrate 'climate change adaptation'?

Economies demonstrate climate change adaptation by modifying their practices to meet sustainability needs and effectively deal with the consequences of adverse weather events.

What is indicated by a 'productivity growth decline'?

A productivity growth decline indicates a situation where the output of goods and services is decreasing, which raises concerns about the overall health of an economy.

Describe the economic concept of 'technological change'.

It is the process by which economies integrate new technologies and artificial intelligence (AI), often resulting in job disruption.

What is 'protectionism' as an economic policy?

Protectionism is an economic policy designed to shield a country's domestic industries from foreign competition through the implementation of trade barriers.

Explain 'income inequality'.

Income inequality refers to the disparity in the distribution of income among individuals within an economy, which often sparks debates regarding equity.

What does 'government debt sustainability' concern?

Government debt sustainability concerns whether current government spending levels are manageable or if they are likely to lead to an excessive accumulation of debt.

What is 'scarcity' in economics?

Scarcity is the fundamental economic problem that arises because human wants are seemingly unlimited, while the resources available to satisfy them are limited.

List the main 'Factors of Production'.

The main Factors of Production are the resources used in the creation of goods and services, which include land, labor, capital, and entrepreneurship.

Define 'opportunity cost'.

Opportunity cost is the value of the next best alternative that an individual or society must forgo when making a choice.

What does the 'Production Possibilities Boundary' illustrate?

The Production Possibilities Boundary (PPB) is a curve that illustrates the maximum possible output combinations of two goods that an economy can produce, given its available resources and technology.

What does the Latin phrase 'Ceteris paribus' mean in economic analysis?

'Ceteris paribus' is a Latin phrase meaning 'all other things being equal', which is crucially used in economic analysis to isolate and study the relationship between two specific variables by holding all other factors constant.

Characterize a 'Market Economy'.

A Market Economy is an economic system where prices and the allocation of resources are primarily determined by the forces of supply and demand, with minimal government intervention.

What does the 'circular flow of income' model illustrate?

The circular flow of income is an economic model that illustrates the continuous movement of money, goods, and services between producers (firms) and consumers (households) within an economy.

Define 'mixed economies'.

Mixed economies are economic systems that combine elements of traditional, command, and market economies, thereby incorporating aspects of both private ownership and state control over resources and production.

What factors influence 'consumer choice'?

Consumer choice refers to the decisions made by individuals regarding the purchase of goods and services, which are primarily influenced and constrained by their budget limitations and preferences.

What is 'inflation' and how does it affect purchasing power?

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

How is 'economic growth' defined?

Economic growth is defined as an increase in the total production of goods and services in an economy over a specific period, often measured by real GDP growth.

What is the purpose of 'government regulation' in economics?

Government regulation refers to the rules established by the government with the aim of controlling or influencing economic activity, generally for the public good, such as ensuring safety, fair competition, or environmental protection.

Explain the economic principle of 'specialization and trade'.

Specialization and trade is an economic principle where individuals, firms, or countries focus on producing a limited range of goods or services (specialization) in which they have a comparative advantage, then exchange these for other goods and services (trade), ultimately increasing overall efficiency and productivity.

What is Adam Smith's 'Invisible Hand Theory'?

Adam Smith's Invisible Hand Theory is the concept that the self-regulating nature of a free market, driven by individuals pursuing their own self-interest, ultimately leads to societal benefits and economic efficiency without direct government intervention.