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Ec > Chapter 3 - Production, Income & Spending in a Mixed Economy > Flashcards

Chapter 3 - Production, Income & Spending in a Mixed Economy Flashcards

1
Q

What are stocks in an economy & give examples?

A 
A stock has no time dimension & can only be measured at a specific moment.
Eg. 
Wealth
Assets
Liabilities
Capital
Population
Unemployment
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2
Q

What are flows & give examples?

A 
A flow has a time dimension & can only be measured over a period
Eg
Income
Profit
Loss
Investment
Number of births & deaths
Demand for labour
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3
Q

Is production a flow or stock?

A

Flow

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4
Q

How do stocks change?

A

As a result of flows

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5
Q

On what does the quantity of labour depends?

A

Size of population

Proportion of population that is able & willing to work

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6
Q

What is meant by the term Human Capital?

A

The quality of labour - this refers to the skill, knowledge & health of workers

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7
Q

In economics, what is referred to in Capital?

A

All manufacturing resources including machines, tools & buildings. Capital goods are produced to produce other goods & services.

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8
Q

What does “consumption of fixed capital” mean?

A

Depreciation

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9
Q

Name 2 other production resources.

A

Entrepreneurship & technology

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10
Q

What is the driving force behind production?

A

The Entrepreneur

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11
Q

What is technology in economy?

A

Knowledge

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12
Q

Name the 4 types of income.

A

Rent
Salaries & wages
Interest
Profit

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13
Q

Who owns labour?

A

The members of households

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14
Q

What is a factor market?

A

Market where factors of production are sold

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15
Q

What 3 important flows form part of government’s economic activity?

A

Government expenditure
Taxes
Transfer payments (from the wealthy to poor)

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16
Q

In an economy, who takes part in spending?

A

Households
Firms
Government
Foreign sector

17
Q

Government spending constitutes a …..

A

Addition or injection into the flow of spending & income

18
Q

Taxes constitutes a …..

A

Leakage or withdrawal from the circular flow of income between households & firms

19
Q

Exports constitutes ….

A

An addition or injection into the circular flow of income & spending

20
Q

When households save there is a …. from the circular flow of income & spending.

A

Leakage or withdrawal

21
Q

What are the 3 major flows in the economy?

A

Production, income & spending

Ec (11 decks)

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