FINAl economics quiz #1

GDP (gross domestic product)

Total value of the country's production.

Economics

a social science that focuses on the production, distribution, and consumption of goods and services

macroeconomics

the overall economy, studying big factors like unemployment, inflation, and national income and how they affect a country's growth

CPI (consumer price index)

Average price of common goods.

minimum wage

Lowest legal pay for workers.

inflation

Rising prices of goods and services over time.

unemployment rate

Percentage of people without jobs but seeking work.

communism

a system where the government owns everything, and everyone shares equally, controlled by workers, credit Karl Marx's

primitivism

advocates for a simpler, pre

feudalism

a system where landowners control land, and people work for them.

What is capitalism?

An economic system where private individuals own and control businesses and property, aiming to make a profit.

What is the role of markets in capitalism?

Markets are free of the means of production and remain private in capitalism.

microeconomics

how people and businesses decide what to buy, sell, and produce, and how these choices affect prices.

stock market

A place to buy and sell stocks.

Economic indicator

Measure showing the health of the economy.

What concept is associated with the idea of self

regulation in capitalism?

Karl Marx

a philosopher who studied class struggle and capitalism.

What is socialism?

A system where the government owns and controls major industries, aiming for equal distribution of wealth.

Why is the equal distribution of wealth important in socialism?

The product of an economy should always have a stake in the society.

What is the main belief of Keynesian economics?

Believes in the value of government intervention in markets to stabilize and regulate.

What is Keynesian economics' view on capitalism?

Keynesian economics likes capitalism and believes it can work, but it also believes that the market needs correction.

According to Keynesian economics, what is essential for a stable economy?

A good and smart partnership with the government is essential for a stable economy.

progressive taxation

creates less economic inequality, increases taxes based on income so the government has more money stored

What is the main economic concept embraced in Classical Liberalism?

The invisible hand in the market

What is the stance of Classical Liberalism on government intervention in the economy?

Little to no government intervention

How does Classical Liberalism view taxation?

Taxation should be minimal.

According to Classical Liberalism, what can disrupt a consumer economy?

Government involvement

Who is the economist associated with the concept of Neoliberalism?

Hayek

What is the core belief of Neoliberalism regarding government and regulations?

Believes people are rational, government is a problem, but regulations should still exist when necessary.

The Basic Assumptions

Scarcity, Trade

Scarcity

no infinite supply of everything, the more scarce, the higher the value

Trade

Off

Self

Interest

Cost and Benefits

CBA(cost