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Microeconomics vs. Macroeconomics quiz #1 Flashcards

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Microeconomics vs. Macroeconomics quiz #1
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  • In economics, what does it mean to say that the money supply is 'backed'?
    To say the money supply is 'backed' refers to whether the currency in circulation is supported by a physical commodity (like gold) or by the trust and authority of the government. In modern economies, money is typically fiat money, meaning it is not backed by a physical commodity but by government decree.
  • What components are added together in the demand measure of GDP accounting?
    The demand measure of GDP accounting adds together the total spending on final goods and services in an economy, typically including consumption, investment, government spending, and net exports (exports minus imports).
  • What fundamental problem does economics address according to the video transcript?
    Economics addresses the problem of scarcity, which is the conflict between unlimited wants and limited resources. This leads to the need for making choices.
  • How does microeconomics differ from macroeconomics in terms of the scale of decisions studied?
    Microeconomics focuses on small-scale decisions made by individuals and businesses. Macroeconomics examines large-scale issues affecting entire national or global economies.
  • What are some examples of day-to-day choices analyzed in microeconomics?
    Examples include setting prices, determining how price changes affect supply and demand, and deciding how many workers to hire and what wages to pay. These are operational decisions made by businesses and individuals.
  • Which market structures are mentioned as topics for profit maximization in microeconomics?
    The transcript mentions monopolies and perfect competition as market structures studied for profit maximization. These structures help illustrate different strategies for maximizing profit.
  • What macroeconomic topics are listed as being outside the main focus of microeconomics?
    Macroeconomic topics mentioned include recessions, inflation, and unemployment. These are considered broader issues compared to the individual and business decisions in microeconomics.
  • How does the transcript describe the relationship between economics and mathematics?
    The transcript notes that economics involves some math, which may be intimidating to some students. However, it emphasizes that economics is also deeply rooted in studying human behavior and psychology.
  • What is the role of taxes in microeconomic analysis as described in the transcript?
    Taxes are analyzed in terms of how they affect supply and demand for products. The course will cover the impact of taxes on market outcomes.
  • Why is economics considered a social science according to the transcript?
    Economics is considered a social science because it studies the choices made by individuals, institutions, and society. It focuses on human behavior under conditions of scarcity.