Economic Systems: An Introduction

What is an economy?

• A system where goods and services are produced, distributed, and consumed
  

• A government body that regulates trade policies

• An organisation that provides financial services to individuals

• A method of saving money for future use

Who are the ‘key players’ within an economy

• Non-profit organisations and local businesses

• Private companies and individual investors

• Only multinational corporations and banks

• Consumers, producers, and the government

How do consumers contribute to the economy?

• By enforcing trade agreements with other countries

• By providing subsidies and financial regulations

• By purchasing goods and services, which drives demand

• By producing goods and services

How do producers contribute to the economy?

• By regulating the flow of money through taxation

• By creating goods and services to meet consumer demands

• By implementing government policies on trade

• By organising financial resources for public services

How does the government contribute to the economy?

• By managing private businesses and controlling prices directly

• By producing goods for public consumption

• By setting economic policies, collecting taxes, and providing public services

• By investing in foreign markets and increasing exports

What does GDP stand for?

• Gross Domestic Product

• General Development Percentage

• Global Distribution Protocol

• Government Debt Profile

How is GDP used in economics?

• To measure a country's total population

• To evaluate the quality of goods produced

• To assess the economic performance and growth of a country

• To determine the level of foreign investments

What role does money play in an economy?

• 
  It serves as a medium of exchange, a store of value, and a unit of account

• It acts as a universal language for trade agreements

• It replaces the need for government regulation

• It is used solely for international transactions

What is the Human Development Index (HDI)?

• A measure of technological advancement in a country

• An index evaluating the economic strength of businesses

• A ranking of countries based on their trade volumes

• A composite statistic of life expectancy, education, and per capita income

What characterises a free market economy?

• Government control over all economic activities

• Decisions made based on tradition and customs

• Economic activities governed by supply and demand with minimal government intervention

• A mix of government planning and market-based mechanisms