L1 Introduction to the Economy

What is the Economy?

• The system of distributing money

• The system of buying and selling goods

• The system of producing goods and services

• The system of managing resources

What would happen if people stopped spending money?

• Businesses would make more money

• The economy would collapse

• People would save more money

• The government would provide more income

What is the Household sector in the economy?

• Individuals exchanging time and skills for income

• Investors earning profits from trading goods and services

• Businesses exchanging goods and services for money

• Government providing financial support to households

What is the source of household income defined as 'Fixed regular work income'?

• Commission

• Wages

• Interest

• Salary

What is the definition of 'Capital Gain' as a source of household income?

• Profit from an asset sale

• Additional payment for achieving outcome

• Share of profit payment

• Right to use payment

What is the importance of business in New Zealand?

• Supplying goods and services to households

• All of the above

• Contributing income to the government

• Providing employment and innovation

How are businesses and households interdependent?

• They rely on government support

• They provide employment to each other

• They exchange goods

• They exchange money for products and service they each provide

What do businesses provide to the government?

• Taxes

• Essential services

• Innovation

• Employment opportunities

What is a small business defined as?

• A business with under 50 employees

• A business with under 20 employees

• A business with under 10 employees

• A business with under 100 employees

What is the meaning of 'Disposable Income' for households?

• Income after taxes and other deductions

• Income from investments and savings

• Income from part-time work

• Income from government benefits