Q1. What is the Balance of Payments (BoP)?BoP is a systematic record of all economic transactions between residents of a country and the rest of the world during a year. Q2. What are the components of BoP? Q3. What is the current account?It records exports and imports of goods and services, income from abroad, and…
Q1. What is a government budget?A government budget is an annual statement showing estimated revenue and expenditure during a financial year, presented by the finance minister. Q2. What are the objectives of a government budget?Allocation of resources, income redistribution, economic stability, employment generation, economic growth, and reducing regional inequalities. Q3. What are the components of…
Q1. What is money?Money is anything widely accepted as a medium of exchange, measure of value, store of value, and standard for deferred payments. Q2. What are the four functions of money? Q3. What are the components of money supply?Money supply includes currency held by the public and demand deposits of commercial banks:M1 = Currency…
Q1. What is national income accounting?It is the measurement of a country’s overall economic performance using indicators like GDP, GNP, NNP, and personal income within a specified period, usually a year. Q2. What is gross domestic product (GDP)?GDP is the total monetary value of all final goods and services produced within the country’s domestic territory…
Q1. What is a non-competitive market?A market where sellers have pricing power due to limited competition. Examples include monopoly, monopolistic competition, and oligopoly with fewer sellers and product differentiation. Q2. What is a monopoly?A market structure with a single seller, no close substitutes, and high entry barriers. The firm controls price and output decisions. Q3….
Q1. What is market equilibrium?Market equilibrium is the point where quantity demanded equals quantity supplied at a certain price, ensuring no excess demand or supply. Q2. What is equilibrium price?The price at which the quantity of a good demanded equals the quantity supplied. Q3. What is equilibrium quantity?The quantity of goods bought and sold at…
Q1. What is perfect competition?A market structure where many sellers offer identical products, no single buyer or seller can influence price, and there is free entry and exit. Q2. What are the main features of perfect competition? Q3. Why is a firm called a price taker in perfect competition?Because the market determines the price, and…
Q1. What is production in economics?Production refers to the process of converting inputs (like land, labour, capital) into outputs (goods and services) to satisfy human wants. Q2. What are the factors of production?The four basic factors are: Q3. What is the production function?It shows the functional relationship between inputs and output:Q = f(L, K), where…
Q1. Who is a consumer in economics?A consumer is an individual who buys goods and services to satisfy personal wants using available income. Q2. What is utility?Utility is the satisfaction a consumer derives from consuming goods or services. Q3. What is total utility (TU)?Total utility is the total satisfaction obtained from consuming all units of…
Q1. What is microeconomics?Microeconomics is the branch of economics that studies individual units like consumers, firms, and markets to understand price determination, resource allocation, and economic decision-making. Q2. How is microeconomics different from macroeconomics?Microeconomics studies individual units; macroeconomics deals with aggregates like national income, inflation, and unemployment in the entire economy. Q3. What is the…