What system does an economy describe?
The system through which goods and services are produced, distributed or sold, and consumed or purchased.
What does economics study under conditions of scarcity?
The economy and the factors affecting it, including production, distribution, and consumption.
What does “economical” describe?
Using money, time, energy, or resources carefully and efficiently.
What does “economic” relate to?
The economy, trade, and money.
What does scarcity describe about resources or products relative to human wants?
Their quantity is limited, making them difficult to find or obtain.
Why must individuals, businesses, and governments make choices about resource use?
Resources are limited.
What does the cost-benefit principle recommend when benefits equal or exceed costs?
Take the action.
What does microeconomics study about individuals, businesses, and markets?
Their decisions and effects on specific markets.
What does macroeconomics study?
The economy as a whole.
How did Aristotle judge merchants’ profits from selling above purchase price?
He regarded them as morally problematic.
What did Thomas Aquinas say merchants could earn a return for?
Their work.
What does Aquinas’s just price cover?
Production costs and the maintenance of the worker and the worker’s family.
What was Mercantilism, and when was it dominant?
A political and economic system dominant from the 16th to the 18th century.
What did Mercantilism aim to increase against rival states?
National wealth and state power.
What defines a zero-sum game between countries?
One country’s economic gain comes at another’s expense because resources are treated as limited.
What trade balance did mercantilist governments seek?
A trade surplus.
How did mercantilist governments pursue a trade surplus?
They stimulated domestic production and exports, limited consumption and imports, and imposed tariffs.
Which work and year are presented as foundational to classical economics?
Adam Smith’s *The Wealth of Nations* (1776).
What does Adam Smith’s invisible hand describe?
Individuals pursuing their own interests contribute to efficient resource allocation through the market mechanism.
Which author is credited with the invisible-hand idea in this section?
Adam Smith.
What determines which goods countries should specialize in under comparative advantage?
Lower opportunity cost.
What ownership and accumulation define capitalism in Karl Marx’s account?
Private ownership of the means of production and the accumulation of capital.
According to Marx’s theory of exploitation, how does workers’ output compare with their wages?
Workers produce more economic value than they receive in wages.
Which author is associated with Keynesianism’s government-managed capitalism?
J.M Keynes.
How does Keynesianism support economic activity and employment?
By using public action to stimulate demand and spending.
Which economist is associated with monetarism?
Milton Friedman.
What monetary policy does monetarism recommend?
Growing the money supply at a steady, moderate rate consistent with natural economic growth.
How does subsistence production differ from cash-crop production?
Subsistence production meets a community’s own needs, while cash crops are produced for sale and profit.
What characterizes imperfect competition in Joan Robinson’s work?
Firms have market power, and markets may fail to self-regulate smoothly, allowing inequality to persist.
On what date did the Maastricht Treaty establish the European Union?
7 February 1992.
What public-deficit limit is required by the euro convergence criteria?
Below 3% of GDP.
On what date was the euro launched as a non-physical currency?
1 January 1999.
In which month and year did the UK referendum on EU membership take place?
June 2016.
When did the UK ratify its EU withdrawal agreement, beginning the transition period?
31 January 2020.
What EU-related rights did the UK retain during the transition period?
It followed most EU rules and remained in the common market without EU voting rights.
Which two shocks combined in the Covid-19 pandemic crisis?
A supply shock and a demand shock.
What did the Covid-19 supply shock reduce?
Production.
What did the Covid-19 demand shock reduce?
Household consumption and business investment.
When did the Russia–Ukraine conflict begin?
2014, with Russia’s annexation of Crimea.
When did Russia launch its full-scale invasion of Ukraine?
February 2022.
Why did the Russia–Ukraine war disrupt energy and food supplies?
Russia and Ukraine were key suppliers of energy, fertilizers, wheat, maize, and oilseeds.
What did the Russia–Ukraine war contribute to besides supply-chain disruption?
Higher prices.
What were Eurozone headline inflation rates in 2020, 2021, and 2022?
0.3% in 2020, 2.6% in 2021, and 8.4% in 2022.
Which prices does headline inflation include that core inflation excludes?
Food and energy prices.
Which groups form an economy’s network?
Producers, distributors, and consumers.
At what levels can an economy operate?
Local, national, or international levels.
What happens when an action’s benefits exceed its costs?
The action is favorable.
What is the result when an action’s benefits equal its costs?
Neither a net gain nor a net loss.
What results when an action’s costs exceed its benefits?
Regret and resource waste.
What pricing practice did Aquinas oppose during periods of high demand?
Raising prices in response to high demand.
What economic controls did Aquinas support to protect the common good?
Government price control and market regulation.
Why did Antoninus of Florence consider government intervention a moral duty?
It protected the common good and helped the poor and needy.
How were morality, business, and social responsibility connected in medieval economic thought?
They were closely connected, with government charged with protecting that connection.
Which 17th-century figure symbolized mercantilism under Louis XIV?
Jean-Baptiste Colbert.
What characterized Jean-Baptiste Colbert’s mercantilist policies?
Strong state intervention in production.
Which developments did mercantilism’s pursuit of wealth and power contribute to?
Colonialism, imperialism, and conflicts in Europe.
How does Ricardo’s labor theory of value determine a good’s value?
By the labor hours needed to produce it.
Which economist is credited with the labor theory of value?
D Ricardo.
Which global crisis followed the 1929 Wall Street crash?
The Great Depression.
Which measures can increase demand in Keynesian economics?
Tax reductions, increased government spending and investment, subsidies, social benefits, and lower interest rates.
Which economist is associated with the quantity theory of money?
Friedman.
Which economist analyzed labor-market discrimination and family behavior?
Gary Becker.
Which values did Confucian economic thought promote?
Hard work, education, honesty, personal responsibility, respect for social roles, ethical business, and community concern.
What do Islamic economic principles emphasize in supporting the poor?
Ethical behavior, social justice, responsible wealth management, charity, and redistribution.
Which economic factors did Ibn Khaldun argue civilization depends on?
Taxation, labor, productivity, supply and demand, and the role of the state.
Who argued that civilization depends on taxation, labor, and productivity?
Ibn Khaldun, in the 14th century.
How can communities manage common-pool resources, according to Elinor Ostrom?
Through collective management, cooperation, and sustainable use.
What does behavioral economics study about economic decisions?
How psychology and human behavior shape decisions that are not always fully rational.
In which year did the Treaty of Rome create the European Economic Community?
1957.
Which six countries founded the European Economic Community under the Treaty of Rome?
France, Italy, Germany, Belgium, the Netherlands, and Luxembourg.
Which summit decided in 1969 to prepare the Werner Plan?
The Hague summit.
What economic and monetary goal did the 1969 Hague summit set for the Werner Plan?
Closer economic and monetary union and a future single currency.
In which year was the European Monetary System established?
1979.
Who organized the Brexit referendum and resigned after losing it?
David Cameron.
Which prime minister conducted the UK’s Brexit withdrawal process?
Boris Johnson.
When did the Brexit transition period end?
31 December 2020.
What did the Northern Ireland Protocol prevent at the Irish border?
A hard border between Northern Ireland and the Republic of Ireland.
Which two markets could Northern Ireland access under the Northern Ireland Protocol?
The European and British markets.
When did the Covid-19 pandemic emerge?
At the end of 2019.
What measures did countries use during the spring 2020 Covid-19 peak?
Lockdowns, travel restrictions, school closures, and public-event cancellations.
What disrupted production and supply chains during the pandemic?
Factory shutdowns, halted projects, labor shortages, and supply-chain disruptions.
What pandemic factors reduced household consumption and business investment?
Restrictions and uncertainty.
How did governments and central banks respond to the pandemic crisis?
With fiscal stimulus, monetary easing, and job-retention schemes.
How did the European Central Bank try to slow inflation in 2022?
It raised interest rates to make borrowing more expensive.
What does an increase by a number of percentage points describe?
The difference between two rates.
How do microeconomic and macroeconomic decisions affect each other?
Microeconomic decisions affect macroeconomic outcomes, while macroeconomic decisions affect individuals and businesses.
How can government decisions influence aggregate demand?
Through measures such as tax reductions.
How can government decisions influence production?
Through measures such as subsidies to companies.
What pattern characterizes economic activity over time?
It alternates between growth, stagnation, and contraction or crisis.
Answer 36 questions on Business English Economics.
1. Which description best defines an economy?
2. What does economics study as a social science?
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