PRINCIPLES OF MACROECONOMICS EXAM PREP QUESTIONS AND ANSWERS FULLY VERIFIED

PRINCIPLES OF MACROECONOMICS EXAM
PREP QUESTIONS AND ANSWERS FULLY
VERIFIED

◉ Centrally planned economy.
Answer: government decides how economic resources will be
allocated


◉ Economic Model.
Answer: A simplified version of reality used to analyze real world
economic situations


◉ Economic Variable.
Answer: something measurable that can have different values


◉ Economics.
Answer: the study of the choices people make to attain their goals
given their scarce resources


◉ Equity.
Answer: the fair distribution of economic benefits

, ◉ Macroeconomics.
Answer: study of economy as a whole - inflation, unemployment,
economic growth


◉ Microeconomics.
Answer: the study of how households and firms make choices


◉ Marginal analysis.
Answer: analysis that involves comparing marginal benefits to
marginal costs


◉ Market.
Answer: group of buyers and sellers of a good or service and the
institution by which they come together to trade


◉ Market economy.
Answer: households and firms interacting in markets allocate
economic resources


◉ Mixed economy.
Answer: an economy where most economic decisions result from
the interaction of buyers and sellers in markets but in which the
government plays a significant role in the allocation of resources