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Economics IGCSE chapters 1 and 2

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  • What does Economics study?
    Allocation of scarce resources
  • Give an example of opportunity cost
  • What are capital goods?
    Products purchased by other companies to produce other goods
  • What can lead to economic growth?
    New technology, improved efficiency, education and training, new resources
  • What is deflation?
    Period where level of aggregate demand is falling
  • What does production possibility curve show?
    The maximum number of goods that can be produced with all the given resources
  • What is economic growth?
    Increase in the level output by a nation
  • What are consumer goods?
    Products purchased by households and individuals
  • What does GDP stand for?
    Gross domestic product
  • What is opportunity cost?
    Cost of the next best alternative given up
  • What is aggregate demand?
    Total demand from consumers
  • What is inflation?
    A general and continuous rise in prices
  • What does PPC stand for?
    Production possibility curve
  • What does GDP measure?
    Country's total output for the year
  • What are the factors of production?
    Land, labor, capital, entrepreneurship
  • What is interest rate?
    Price paid to lenders for borrowed money
  • Name two macroeconomic objectives
    Controlling inflation, Economic growth
  • What is macroeconomics?
    Study of large economic systems
  • What is microeconomics?
    Study of small economic systems
  • What is the basic economic problem?
    Wants are unlimited, but resources are scarce
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