Economic Vocabulary Quiz Guide
Uploaded by
banhgaungon06Economic Vocabulary Quiz Guide
Uploaded by
banhgaungon06Common questions
Powered by AI'Economic expansion' refers to a period when the size of an economy is growing, typically characterized by increased GDP, rising employment, and higher production and consumption levels. In contrast, an 'economic downturn' occurs when the size of an economy decreases, often resulting in reduced GDP, declining employment, and decreased production and consumption.
An economic 'bubble' occurs when the value of a type of product increases dramatically and becomes significantly overvalued. When a bubble bursts, it can lead to a rapid and significant decrease in asset values, causing financial instability, loss of wealth, impacts on consumer and business confidence, and potentially leading to an economic downturn as observed with the housing bubble leading to the 2008 financial crisis.
Supply and demand are key market forces that determine the price of goods and services, known as the 'price tag.' When demand is high and supply is limited, prices tend to increase, while when supply exceeds demand, prices tend to decrease. This equilibrium between supply and demand underpins pricing strategies in the market.
A 'boom' is a long period of good economic expansion characterized by strong growth, increased production, and higher consumer spending and confidence. An 'economic recovery' refers to the phase following a recession where the economy starts growing again after having decreased in size. While both indicate growth, a boom is sustained and often more robust than a recovery phase.
Economic downturns impact the supply chain by disrupting production and distribution, leading to shortages, delivery delays, and increased costs. Global markets experience cross-border effects, where downturns in one region can lead to reduced demand and supply chain bottlenecks internationally, impacting multinational companies' operations and global trade balances.
'Quality control' ensures that products meet certain standards before reaching the market, which can enhance consumer confidence and demand, thus supporting economic performance. Effective quality control can lead to increased efficiency in production cycles and contribute positively to GDP by minimizing waste and rework, and improving product reliability and longevity.
The term used to describe a prolonged period of economic decline lasting two years or more is a 'depression.' It is different from a 'recession' in that a depression lasts longer than a recession; a recession is characterized by an economic decline lasting for at least six months.
An 'order backlog' occurs when there are more orders than a company can fulfill at a given time, potentially indicating high demand relative to production capacity. While a temporary backlog might suggest robust consumer interest and a strong economy, a prolonged backlog could signal inefficiencies or limitations within production processes, affecting overall economic health.
The term 'mass-produce' refers to the production of large quantities of goods using machinery and assembly line techniques, which is significant for achieving economies of scale. By mass-producing, manufacturers can reduce the cost per unit through efficiencies gained from large-scale production, allowing them to offer competitive pricing, increase market share, and enhance economic output.
In economic terms, 'stagnation' refers to a long period of very low growth, where an economy fails to perform significantly above the zero-growth line. Strategies to combat stagnation include monetary policy changes, such as lowering interest rates to encourage spending, fiscal stimulus like increased government spending or tax cuts, and innovation or investment in new industries to promote growth.