#1
What is scarcity in economics?
When there is an imbalance between limited resources and unlimited wants
ExplanationScarcity arises from the disparity between finite resources and infinite desires.
#2
What is the primary function of money in an economy?
To act as a medium of exchange
ExplanationMoney facilitates transactions by serving as a universally accepted medium for trade.
#3
What does GDP stand for in economics?
Gross Domestic Product
ExplanationGDP quantifies the total value of goods and services produced within a country's borders.
#4
What is the law of demand in economics?
As the price of a good increases, the quantity demanded decreases
ExplanationThe law of demand asserts an inverse relationship between price and quantity demanded.
#5
What is the difference between microeconomics and macroeconomics?
Microeconomics studies individual markets, while macroeconomics studies the economy as a whole
ExplanationMicroeconomics analyzes the behavior of specific economic units, while macroeconomics examines aggregate economic phenomena.
#6
What is the difference between nominal GDP and real GDP?
Nominal GDP is adjusted for inflation, while real GDP is not adjusted for inflation.
ExplanationReal GDP accounts for inflation's impact on economic output, while nominal GDP does not adjust for inflation.