CFA Chartered Financial Analyst Economics Questions with 100% Correct Answers.

Economics Correct Answer - The study of production, distribution and consumption of goods and services - The principles of the allocation of scarce resources among competing uses - Can be divided into two broad areas of study: micro and macro Macroeconomics Correct Answer - The branch of economics that deals with aggregate economic quantities, such as national output and national income Microeconomics Correct Answer - The branch of economics that deals with markets and decision making of individual economic units, including consumers and businesses Demand and supply analysis Correct Answer - The study of how buyers and sellers interact to determine transaction prices and quantities Prices reflect: Correct Answer - The value to the buyer of the next (or marginal) unit - The cost to the seller of that unit Microeconomics classifies private economic units into two groups: Correct Answer - Consumers (or households) - Firms Theory of the consumer Correct Answer - The branch of microeconomics that deals with consumption by utility-maximizing individuals Consumption Correct Answer - The demand for goods and services - The purchase of final goods and services by individuals Utility-maximizing individuals Correct Answer - Individuals who make decisions that maximize the satisfaction received from present and future consumption Theory of the firm Correct Answer - The branch of microeconomics that deals with the supply of goods and services by profit-maximizing firms Business risk Correct Answer - Risk relating to operating profits 2 broad classifications of markets Correct Answer - Factor markets - Goods markets Factor markets Correct Answer - Markets for the purchase and sale of factors of production