Macroeconomics Final Exam Review

Why is scarcity a fundamental problem in economics, and how does it affect decision-making?

What is opportunity cost, and why is it important to consider when making economic decisions?

How do incentives influence people's choices and behaviors in economic systems?

How does trade allow for specialization, and why does it benefit all parties involved?

Who determines what goods and services are produced in a market economy, and how are these decisions made?

What is the “invisible hand” as described by Adam Smith, and how does it guide market economies?

What is market failure, and what are some examples of situations where it might occur?

What are externalities, and how do they impact economic efficiency and society?

What does productivity measure, and why is it crucial for economic growth?

What are the main causes of inflation, and how do they impact the economy?