Macro- Intro Flashcards
What does macroeconomics deal with?
Macro economics deals with the aggregate economic variables of an economy.
It studies the economic relationships or issues of an economy as a whole.
It focuses on total consumption, saving, full employment, and expansion of productive capacity.
What does the term “macro” in macroeconomics refer to?
The term “macro” comes from a Greek word ‘Makros’ which means large.
What approach does macroeconomics take?
Macroeconomics takes a top-down approach.
What is a capitalist country?
In a capitalist country, production activity is mainly carried out by capitalist enterprises.
What is the role of the government in a capitalist economy?
In a capitalist economy, the role of the government is to maintain law and order only. It does not interfere in the price mechanism.
What is the main motive of a capitalist economy?
The main motive of a capitalist economy is to earn a profit.
What are some examples of capitalist economies?
Examples of capitalist economies include Hong Kong, Singapore, Canada, UAE, and Ireland.
What are the important features of a capitalist economy?
Role of the government
Profit motive
Central problems
Role of the private sector
Laissez faire (free market economy)
What is the wage rate?
The wage rate refers to the price at which labor services are bought and sold.
What is wage labor?
Wage labor refers to the labor that is sold and purchased against wages.
What was the Great Depression?
The Great Depression was the worst economic downturn in the history of the industrialized world.
It began after the stock market crash of October 1929.
The Great Depression led to the failure of the classical approach of economics and paved the way for the emergence of the Keynesian approach.It provided evidence to recognize macroeconomics as a separate branch of economics.
What was the main cause behind the great depression?
The main cause behind this crisis was the fall in aggregate demand due to underconsumption and overinvestment.The demand for goods in the economy was so low that production was lowered, leading to unemployment
What are entrepreneurs?
Entrepreneurs are people who exercise control over major decisions and bear a large part of the risk associated with a firm or enterprise
What is revenue?
Revenue refers to the money that is earned
What is investment expenditure?
Investment expenditure refers to expenses that raise productive capacity.
