What is a consumer good?
a good sold to the public that is consumed rather then used in production
a good which is used to ones disadvantage
a good that is used in producing other goods rather than being bought
a good which is used for ones benefit
What is the production possibility frontier?
how much an economy will develop over the next decade
how much an economy grows in a year
how much an economy can produce giving existing resources
how much a economy can produce with no resources left
What is the circular flow of income?
the flow of goods from one country to another with what happens to income
it is the flow of goods, FOP and the payments between households and firms
the difference between the flow of good and that of the income that arrives
it is the flow of products between cooperation
What is a free good?
made from non-scarce resources with no opportunity cost
made from scarce resources with opportunity cost
made from a non-scarce resource with opportunity cost
made from scarce resources with no opportunity cost
Income = input = expenditure
False
True
What is real national GDP?
output of the economy taking into account inflation
output of the economy
income of the entire economy
output of the economy without taking into account inflation
What is the economic problem?
satisfying wants with resources
satisfying resources with wants
satisfying infinite wants with limited resources
satisfying limited wants with infinite resources
How is real GDP calculated?
Sum of{current year prices/current year quantities}
Sum of{current year prices x current year quantities}
Sum of{base year prices x current year quantities}
Sum of{base year prices/current year quantities}
What option is not an assumption made in the simple model of the circular flow of income?
that income is recieved in full
firms spend all income on the FOP
there is no government intervention
households spend all income on goods and services
What is consumption known as?
Expenditure on training
Expenditure on capital goods
Expenditure on consumer goods
Expenditure on land
A increase in Consumption, Investment and Government spending will shift the AD curve which way?
Nowhere
Right
Up
Left
What is a recession?
prolonged upturn in the economy
prolonged downturn in the economy
productivity is both rising and falling
productivty is staying the same
What is the price relative index?
the amount of wealth is tied up in capital goods
ratio of a countrys GDP to GNP over a given time period
the overall total expenditure within a country
ratio of a price of a commodity at a time to its price a different time
What is a free market economy?
buying goods which come from abroad
selling goods under control from the government
the trading of goods with some involvement of others
buying/selling goods and service that are not under control from government
Per capita income is total income divided by the number of people in a country
False
True
What does gross national income equal?
Overseas investment + foreigners earnings [that are sent home]
Overseas investment - foreigners earnings [that are sent home]
foreigners earnings [that are sent home] + overseas investment
foreigners earnings [that are sent home] - overseas investment
Market mechanism - forces of demand and supply determine the price and quantity of goods and services
False
True
What is the productivity gap?
difference between the GDP of two countrys
difference between the productivity between two people
difference between price levels of two countrys
difference between the productivity levels in the uk and another country
What is aggregate demand equal to?
G + I + G + {X-M}
C + I + C + {X-M}
C + I + G + {X-M}
D + I + G + {X-M}
Land is a natural resource used in production
False
True
What is gross national product?
total income added up
measures the final value of output or expenditure by uk owned FOP worldwide
the sum of only goods produced in an economy over a time
sum of all goods and services or output produced in an economy over a time
What is a intangible good?
a good which costs little to no money
not perceptable by touch
perceptable by touch
a good which costs alot of money
What is a transition economy?
changing from a centrally planned economy to a market economy
changing between economys
changing from a market economy to a centrally planned economy
changing your beliefs
Which option is not a factor of production?
location
labour
enterprise
capital
What is fiscal policy?
changes to government taxation, government spending and borrowing
designed to make markets work more efficiently
changes to interest rates and the supply of money
the policy of increasing productive output of a country
What is scarcity?
state of having an excess of supply
having little demand
having alot of demand
state of being in short supply or shortage
Which option is not a leakage from the economy?
imports
taxation
savings
exports
What are economic goods?
made from a non-scarce resource with opportunity cost
made from scarce resources with no opportunity cost
made from scarce resources with opportunity cost
made from non-scarce resources with no opportunity cost
What is supply-side policy?
designed to make markets work more efficiently
the policy of increasing productive output of a country
changes to government taxation, government spending and borrowing
changes to interest rates and the supply of money
What is the difference between wealth and income?
income is earning from working and wealth is your total accumulated earning
income is accumulated income and wealth is earnings from working
wealth is a stock concept and income is a flow concept
wealth is a flow concept and income is a stock concept
What is a real value?
The value which accounts for both GNI and GDP per capita in a country
The value of something without fully accounting for inflation at the time
The value which is recorded in a shop
The value of something accounting fully for inflation at the time
How do you calculate index numbers?
by finding the ratio of two numbers that are divided by one another
by finding the ratio of two economic variables together
by finding the ratio of base value to current value
by finding the ratio of current value to a base value of 100
How do you calculate chain base index?
current variable/previous years variable x 100
current variable + previous years variable x 100
previous years variable - current variable x 100
previous years variable/current variable x 100
Monetary policy is the policy of increasing productive output of a country
False
True
What is a capital good?
a good sold to the public that is consumed rather then used in production
a good which is used to ones disadvantage
a good that is used in producing other goods rather than being bought
a good which is used for ones benefit
What is a nominal value?
The upfront cost accounting for changes in the countrys GDP
The upfront cost accounting for inflation
The upfront cost accounting for the GNI per capita
The upfront cost without accounting for inflation
What is gross domestic product?
measures the final value of output or expenditure by uk owned FOP worldwide
the sum of only goods produced in an economy over a time
sum of all goods and services or output produced in an economy over a time
all of the above
If the sum of injections is less then the sum of withdrawals what is happening to national income?
It stays the same
It is falling
It stays the same in line with inflation
It is rising
Nominal GDP is calculated by - the sum of the current year prices/current year quantities
True
False
What does equitable mean?
Unfair
The amount of money that a firm earns over a given period
The amount of costs that a firm incurs over a given period
Fair
What is investment known as?
Expenditure on land
Expenditure on consumer goods
Expenditure on training
Expenditure on capital goods
Which option is not a limitation of GDP to compare living standards?
negative externalities
takes account of what people can buy using their incomes
transactions without a monetary value
economic growth can cause inequality
Which option is finite?
Wind
Sunshine
water
Space
Capital intensive production is using large quantities of capital to make labour more productive
True
False
What is specialisation?
Concentrating on numerous tasks or products
None of the above
Concentrating on no tasks or products
Concentrating on one particular task or product
What is a tangible good?
a good which costs alot of money
not perceptable by touch
perceptable by touch
a good which costs little to no money
What is a positive statement?
Based upon fact
Based upon opinion
A statement which encourages economic growth
a statement which discourages economic growth
Which option does not effect investment?
household indeptedness
business confidence
price of capital
Interest rates
What type of economy is the United Kingdom?
a mixed economy
a transition economy
a free market economy
a command economy
What is opportunity cost?
opportunity for profit
act of choosing between two or more possibilities
opportunity for loss on your investment
loss of other alternatives when one alternative is chosen