Macroeconomics Final Exam Review

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

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

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

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

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

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

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

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

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

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

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