Economics Flashcards
Q1: What is GDP?
GDP (Gross Domestic Product) is the total value of all goods and services produced in a country over a specified period, often a year or a quarter.
What is GDP per capita?
GDP per capita is the GDP of a country divided by its population, giving an average economic output per person.
How does GDP relate to living standards?
Higher GDP generally suggests better living standards, as it indicates more goods and services are being produced, leading to higher income levels and better access to resources.
What are the different types of unemployment?
: The main types of unemployment are:
* Frictional unemployment (temporary unemployment when people are between jobs)
* Structural unemployment (due to changes in the economy, such as automation or shifts in industry)
* Cyclical unemployment (due to economic downturns or recessions)
* Seasonal unemployment (due to changes in demand during the year).
And Seasonal unemployment
What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
How do tariffs affect trade?
Tariffs are taxes on imports, which make foreign goods more expensive and can reduce the volume of trade, protect domestic industries, and generate government revenue.
What are imports and exports?
Imports are goods and services bought from other countries, while exports are goods and services sold to other countries.
What is meant by “comparative advantage”?
Comparative advantage refers to a country’s ability to produce a good or service at a lower opportunity cost than other countries, making it more efficient to specialize in certain industries.
How does specialization benefit trade?
Specialization allows countries to focus on producing goods in which they have a comparative advantage, leading to more efficient production and greater overall trade benefits.
What are the main benefits and challenges of free trade?
- Benefits: Increased economic growth, access to a larger variety of goods, lower prices for consumers, and greater international cooperation.
- Challenges: Can hurt domestic industries unable to compete, lead to job losses, and result in greater economic inequality.
How would you describe a trend in an economic graph?
A trend in an economic graph shows the general direction or pattern of data over time, such as an upward trend indicating growth or a downward trend indicating decline.
What is micro a macro economics?
Micro:
Studies individuals and small parts of the economy.
Looks at how people (consumers) and businesses make choices.
Deals with things like prices, supply and demand, and competition in specific markets.
Macro:
Studies the whole economy.
Focuses on big-picture topics like economic growth, unemployment, inflation, and government policies.
Looks at things like GDP (the total value of everything produced) and the overall health of the economy.
