Definition and Scope of Economics
The study of how individuals and societies allocate scarce resources to satisfy unlimited wants.
What is economics?
An economic system where the means of production are privately owned and operated for profit.
What is capitalism?
This sector involves the extraction of raw materials from the earth, such as mining, agriculture, and forestry.
What is the primary sector?
This type of tax is levied on the income of individuals and businesses.
What is income tax?
Goods and services sold to other countries are called this.
What are exports?
Economics that deals with individual markets and the behavior of firms and households.
What is microeconomics?
This indicator measures the total value of all goods and services produced within a country in a year.
What is Gross Domestic Product (GDP)?
This rate is set by the central bank and influences the cost of borrowing and the level of economic activity.
What is the interest rate?
By increasing this, the central bank can reduce inflation but may also slow economic growth.
What is the interest rate?
The difference between the value of a country's exports and imports.
What is the balance of trade?
Basic requirements for survival such as food, clothing, and shelter.
What are needs?
An economic system where the means of production are owned and controlled by the state.
What is socialism?
This sector involves manufacturing and processing activities.
What is the secondary sector?
This tax is applied to the sale of goods and services and is usually a percentage of the sale price.
What is sales tax?
This is a tax on imported goods designed to protect domestic industries.
What is a tariff?
Economics that focuses on national economies and broad aggregates like GDP and inflation.
What is macroeconomics?
An economic system that combines elements of both capitalism and socialism.
What is a mixed economy?
This sector provides services rather than goods, including retail, entertainment, and financial services.
What is the tertiary sector?
This tax is based on the value of property owned and is often used to fund local services like schools and roads.
What is property tax?
A limit on the quantity of a good that can be imported into a country.
What is a quota?
The condition where unlimited wants exceed limited resources.
What is scarcity?
This term refers to the general increase in prices and fall in the purchasing value of money.
What is inflation?
This index measures changes in the price level of a market basket of consumer goods and services purchased by households.
What is the Consumer Price Index (CPI)?
The use of government spending and taxation to influence the economy.
What is fiscal policy?
This practice involves selling a product in a foreign market at a price lower than its domestic price or cost of production.
What is dumping?