Module 0

Question 1

a large number of interrelated activities, which include the production, distribution, and consumption of goods and services

Answer 1

Economy

Question 2

also called “economic system”

Answer 2

Economy

Question 3

Main Actors in the Economy

Answer 3

HOUSEHOLDS
FIRMS
GOVERNMENT
Rest of the World (ROW)

Question 4

no outside economic activities to the ROW

Answer 4

Closed Economy

Question 5

no exports, no imports, and no capital flows

Answer 5

Closed Economy

Question 6

composed of households,
firms, and the government

Answer 6

Closed Economy

Question 7

Formula for GDP (Closed Economy)

Answer 7

Gawa Dito sa Pinas
GDP = C + I + G
Gross domestic product (GDP), consumption (C),
investment (I), government expenditures (G)

Question 8

interacts freely with the ROW

Answer 8

Open Economy

Question 9

buys and sells goods and services in world product markets

Answer 9

Open Economy

Question 10

buys and sells capital assets in world financial markets

Answer 10

Open Economy

Question 11

composed of households, firms, government, ROW

Answer 11

Open Economy

Question 12

Formula for GNP (Open Economy)

Answer 12

Gawa ng Pinoy
GDP = C + I + G + (X-M)
Gross domestic product (GDP), consumption (C),
investment (I), government expenditures (G), exports
(X), imports (M)

Question 13

Is the Philippines trade deficit (net-importer) or
trade surplus (net-exporter)?

Answer 13

This occurs when the value of the country’s imports exceeds the value of its exports. The Philippines imports significant amounts of goods such as fuel, machinery, electronics, and industrial raw materials, while exporting electronics, agricultural products, and manufactured goods. The country has struggled to balance its trade due to its reliance on importing key inputs for industries and energy.

Question 14

• Provide labor to firms and receive wages in return.
• Save their excess income through the financial market.

Answer 14

Households

Question 15

• Produce goods and services consumed by households.
• Invest through financial markets.

Answer 15

Firms

Question 16

• Collects taxes from households and firms.
• Engages in public expenditure and interacts with financial markets for debt and investment.

Answer 16

Government

Question 17

the study of the allocation of scarce resources, including how markets
function and how incentives affect people’s, businesses’ and institutions’
behavior

Answer 17

Economics

Question 18

involves acquiring necessary resources (e.g., finance, staff, buildings, equipment) to carry out activities at the lowest possible cost (OECD Glossary of Statistical Terms).

Answer 18

Economy

Question 19

The three fundamental economic functions are:

Answer 19

PDC
Production: Creation of goods and services.
Distribution
Consumption : Use of these goods and services by individuals or firms.

Question 20

Supply curve is for?

Answer 20

Producers (S = P)

Question 21

Demand curve is for?

Answer 21

Consumer (D = C)

Question 22

Provides raw materials used as inputs for production (e.g., fresh water, fuel, wood, air, food).

Answer 22

Resource Supplier

Question 23

Offers non-material benefits such as spiritual enrichment, cognitive development, and recreation (e.g., tourism, aesthetic value, cultural services).

Answer 23

Services supplier

Question 24

Receives waste generated by economic activities, including pollution and greenhouse gasses (GHG).

Answer 24

Waste Assimilator

Question 25

Emerged from the gap between private and social costs/benefits in free market activities.

Answer 25

Environmental Economics

Question 26

Private Costs < Social Costs

Answer 26

Negative Externality (Economic activities impose higher costs on society than on producers)

Question 27

Private Costs > Social Costs

Answer 27

Positive Externality

Question 28

Private Benefits > Social Benefits

Answer 28

Negative Externality (The gains for producers outweigh the benefits society receives)

Question 29

• The difference between private and societal costs, representing market inefficiency.
• This occur when producers don’t fully cover the costs of production, burdening society with the excess.

Answer 29

Externality

Question 30

is the process of assigning monetary value to environmental goods and services that typically don’t have market prices.

Answer 30

Valuation