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Economics - Key terms

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Samuel Williams9196
Quiz by Samuel Williams9196, updated more than 1 year ago
Samuel Williams9196
Created by Samuel Williams9196 over 9 years ago
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Question 1

Question
What is an injection?
Answer
  • Injection is a concept that illustrates firms investing to increase production thus causing real GDP to increase
  • Injection in an economy is when money goes in to the main flow between households and firms, increasing GDP
  • injection accounts for households that borrow money for personal investment.
  • Injection accounts for money that goes out from the main flow, decreasing GDP
  • Injection in an econmy is money that has been allocated in to savings

Question 2

Question
Slump is the stage when unemployment is very low and businesses are investing with high confidence
Answer
  • True
  • False

Question 3

Question
What is Net Social Welfare?
Answer
  • Net social welfare is a concept that focuses on economic factors, output of goods and services, and non economic factors measured by the HDI (Human Development Index), which shows the standard of which individuals are living in.
  • Net social welfare shows the value of goods and services, therefore indicating any economic growth.
  • Net social welfare is a concept relative to Real GDP to show economic growth (increase in production - increase in the material living standards)
  • Net social welfare is an idea that shows the maximum that can be produced with current resources and technology.

Question 4

Question
What is Real GDP?
Answer
  • Real GDP is the total market value of all goods and services produced in an economy, with prices from a base year, which will indicate economic growth in real terms
  • Real GDP illustrates the economic concept of the total output of goods and services in relation to scarcity, choice, opportunity cost and growth, in assumption of two goods, fixed resources and a given level of technology. (shows the potential output)
  • Real GDP is the value of output at current market prices
  • Real GDP focuses on economic and non economic factors through the HDI index to measure socio-economic progress which has three components - longevity, knowledge, and income.

Question 5

Question
What is a withdrawal?
Answer
  • A withdrawal in an econmy is an import made to overseas
  • A withdrawal in an economy is an export
  • A withdrawal accounts for government spending that reduces GDP and overall size of the economy
  • A withdrawal in an econmy is money taken out of the main flow
  • Withdrawal accounts for taxes

Question 6

Question
Recession is when value of money decreases (deflation)
Answer
  • True
  • False

Question 7

Question
Economic growth is at its peak. What stage on the business cycle is this likely to be on?
Answer
  • Slump
  • Recession
  • Boom
  • Recovery

Question 8

Question
I = Income
Answer
  • True
  • False

Question 9

Question
How is Net Migration beneficial?
Answer
  • More labour available, therefore more production
  • Higher demand for goods and services
  • Creates additional skills available in the economy

Question 10

Question
Economic welfare is calculated by social indicators
Answer
  • True
  • False

Question 11

Question
What is a Transfer Payment?
Answer
  • A payment made by government with no exchange (nothing is received in return) eg, income support or the domestic purposes benefit.
  • The creation or purchase of new capital by firms or government eg. building a new factory or constructing a motorway
  • A withdrawal within the circular flow model

Question 12

Question
What is Nominal GDP?
Answer
  • Nominal GDP is a form of measurement that refers to the value of the output, that indicates economic growth and standard of living, at a given base year price accounting any changes in inflation or deflation. So as price increases and assuming the output is the same, there will be no increase in Nominal GDP and vice versa.
  • Nominal GDP is a form of measurement that refers to the value of output at current market prices (current dollars) giving an estimate of economic growth, so as price increases nominal GDP increases and vice versa.
  • Nominal GDP measures the economic potential, rather than looking at the actual output of the economy for an example decrease in employment it will show economic growth.
  • Nominal GDP focuses on economic factors (output of goods and services) as well as non-economic factors such as quality of life factors.

Question 13

Question
What is real income?
Answer
  • Real income is the value of output at current market prices
  • Real income measures economic potential, rather than looking at the actual output of an economy
  • Real income is the value of output relative to some base year.
  • Real income refers to actual economic output, i.e the total number of goods and services produced by an economy

Question 14

Question
In terms of C.E.L.L , the resource market, what does 'C' stand for?
Answer
  • Capital
  • Consumer
  • Consumption spending
  • Capacity

Question 15

Question
What is the unemployment rate in NZ (as of 2014 June)?
Answer
  • 5.6%
  • 3.8%
  • 14%
  • 2%
  • 7.9%

Question 16

Question
'A firm pays GST' what form of money flow is this?
Answer
  • Tax
  • Government
  • Consumption spending
  • Investment

Question 17

Question
What is the current GDP growth of New Zealand?
Answer
  • 2.1%
  • 2.6%
  • 2.5%
  • 2.8%
  • 2.9&

Question 18

Question
The 'interest rate' indicates the amount charged, expressed as a percentage, by a lender to a borrower for the use of assets.
Answer
  • True
  • False

Question 19

Question
What is the current inflation rate in NZ? (on average) - Inflation is when the price increases measured by the CPI (Consumer Price Index), shown as a percentage.
Answer
  • 1.9%
  • 2.1%
  • 2.3%
  • 2.7%
  • 3.2%

Question 20

Question
'Purchasing Power' is related to and known as...?
Answer
  • The value of goods and services bought
  • Real GDP
  • Nominal GDP
  • The potential GDP of goods and services
  • The amount of goods and services bought
  • Real income

Question 21

Question
An example of non-economic welfare is employment
Answer
  • True
  • False

Question 22

Question
The difference between Productivity and Labour Productivity is that Productivity is the correlation between QUANTITY of inputs and the quantity of output so through quantity of Input ==> Production process ==> quantity of Output (Therefore Lower input and higher output is considered as improved production) and Labour Productivity is the ouput PER worker PER unit of time.
Answer
  • True
  • False
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