Macroeconomics - p. 2-23

What is economics?

• The study of money
• The study of scarcity of choice
• The study of surplus
• The study of GDP

In this kind of economy, the decisions of individual producers and consumers largely determine what, how, and for whom to produce, with little government involvement in the decisions.

• Market Economy
• Command Economy
• Mixed Economy

In this kind of economy, industry is publicly owned, and a central authority makes production and consumption decisions.

• Market Economy
• Command Economy
• Mixed Economy

Which is not a factor of production?

• Land
• Labor
• Capital
• Education

The real cost of an item is its __________________: what you must give up in order to get it.

• Scarcity
• Opportunity Cost
• Entrepreneurship
• Incentive

The difference between a depression and a recession is _______________.

• A recession is not as long as a depression.
• A depression is not as long as a recession.
• A depression is an economic decrease, and a recession is an economic increase.
• Nothing, they are the same.

This is the economy’s total production of goods and services for a given time period.

• Aggregate Output
• Aggregate Supply
• Aggregate Demand
• GDP

The ________________ illustrates the trade-offs facing an economy that produces only two goods. It shows the maximum quantity of one good that can be produced for each possible quantity of the other good produced.

• Supply/Demand Curve
• A Pie Chart
• Production Possibilities Curve
• Business Cycles Curve

The labor force is equal to the sum of employment and unemployment.

• True
• False

Which of the following is true?

• Inflation is a rising overall price level, and deflation is a falling overall price level.
• Deflation is a rising overall price level, and inflation is a falling overall price level.