Notes, summaries, assignments, exams, and exercises for Economics for Secondary education

Macroeconomics Q&A

According to which of the following models is there no built-in mechanism which will automatically bring the economy back to full employment?

Basic Keynesian model

An increase in capital formation that expands long-run aggregate supply will

• increase output and
• decrease prices.

An increase in the long-run aggregate supply curve indicates that

potential real GDP has increased.

An anticipated change is an economic occurrence that

is foreseen by most economic participants.

Controlling the money supply to achieve desired macroeconomic goals is called

monetary policy.

If resource prices are fixed and the product selling price rises, then

profits will increase.

In the foreign exchange market, the price of one nation's currency in terms of

1) If the economy is in recession, the CB will decrease its target for the interest rate by increasing the money supply. Another alternative is that the Gov decides to decrease taxes

2) According to the principal of monetary neutrality: In the long run the only effects of a decrease in the monetary supply is to reduce the agg price level...

3) Which of the following statements is false? According to the Solow's model, the contribution of the TFP to the GDP growth is computed as a residual, once we have subtracted the contribution physical & human capital.

4) If the nominal GDP is 1.6M, & real GD is 1.0M, the deflator is: 160

5) The nominal rate of unemployment around which the unemployment rate fluctuates is called the Natural rate of unemployment

6)

Understanding Lean Systems and Operations

Lean systems are operations systems that maximize the value added by each of a company’s activities by removing waste and delays from them.

Core Philosophies: TPS and JIT

• Toyota Production System (TPS)
• Just-in-Time (JIT) System

The JIT Philosophy: Eliminating Waste (Muda)

The JIT philosophy focuses on eliminating waste, or muda, by cutting unnecessary capacity or inventory and removing non-value-added activities.

Goals of Lean Implementation

The primary goal is to eliminate the eight types of waste, produce services and products only as needed, and continuously improve the value-added benefits of operations.

Eight Types of Waste (Muda)

Identifying and eliminating these eight types of waste (muda) is central...

The aging of the Canadian population will strongly influence our economy. Social policies need to be re-evaluated and insurance coverage needs to be properly addressed. Mortality rates are trending upwards for all age groups.

Sandy is a financial planner. She uses statistics to illustrate the importance of life insurance for her clients. The total number of deaths per year among the Canadian population is decreasing.

Victoria and Rafael are both in their late fifties. Victoria has a part-time retail job and Rafael is currently employed as a carpenter and expects to get full CPP benefits when he retires.

Tyler and Suzie follow their financial planner's advice and implement some risk control strategies. Which of the following strategies does not

High Hourly Wage Rate

High hourly wage rate: Workers are paid according to the amount of hours they work. A "high" hourly wage means being paid a significant amount of money per hour.

Piece Rate Element

Piece Rate Element:

• Employees: The amount they earn is directly associated with their effort, encouraging them to produce more efficiently. However, it may not be convenient for workers who prioritize quality over quantity.
• Employer: More production potentially leads to increased profits. However, workers who rush might compromise quality.

Responsibility and Motivation

Responsibility motivates workers: Giving employees responsibility can create a sense of importance, making them feel appreciated and valuable. However, some workers may find responsibility...

1. Purpose of Business

• Identify needs of consumers.
• Use scarce resources to produce goods and services.
• Meet the needs and wants of consumers profitably.
• Add value to resources so they become more valuable.

2. Benefits of Added Value

• Charge higher prices, thus earning higher profits.
• Create a point of difference from competitors, establishing a Unique Selling Point (USP).

3. How to Increase Added Value

• Increase the selling price.
• Create a luxurious retail environment.
• Use high-quality packaging.
• Promote the brand so it becomes a "must-have."
• Create a USP.
• Deliver great customer service.
• Reduce the cost of materials and wastage in production (being careful not to affect quality).

4. Characteristics of an Entrepreneur

• Innovative: Visionary with creative and original

Economic Objectives of Business

Business is an economic activity, and therefore, its primary purpose is to achieve economic results. The key economic objectives of business are as follows:

• Earning Profit

  Profit signifies the excess of income over expenditure. The foremost and prime objective of every businessman is to earn profit. A business cannot survive without earning profit. It is not only essential for survival but also crucial for the growth and expansion of the business.

• Market Standing & Customer Creation

  A business can survive for a longer period only if it can capture a significant market share and establish strong market standing. This is possible only when the business provides goods and services that satisfy the needs and wants

Supply Defined

Supply: The amount of goods and services producers are willing to sell at various prices at a particular time.

Market Supply

Market supply: The total output of all the individual companies within a market.

Law of Variable Proportions

Law of variable proportions: Highlights the relationship between the input of a factor of production and the supply of a good or service.

Production Schedule

Production schedule: Shows how the quantity supplied changes as the number of workers increases.

Stages of Production

Stage of production: Is based on a change in marginal product, including diminishing returns.

Elasticity of Supply

Elasticity of supply: Is measured by how quickly the quantity supplied changes as a result of a change in price.

Understanding

1. Nature of Business

The working capital requirement of a firm depends primarily on the nature of its business. Public utilities and service organizations require minimal working capital as sales are conducted on a cash basis. There is a negligible time gap between production and sales, and these enterprises do not maintain large stocks of goods. Conversely, trading and manufacturing concerns require significant working capital to maintain inventory.

2. Size of Business

The size of the business has a direct correlation with working capital needs. Generally, the larger the business unit, the greater the requirement for working capital, and vice-versa.

3. Length of Operating Cycle

The length of the operating cycle significantly affects working capital...

Core Business Concepts

• Quality: An essential or basic characteristic or feature that belongs to something; how good or bad something is.
• Perishable Goods: Goods that may decay or be destroyed.
• Consumer: A person or organization that buys something or uses a service.
• Planning Regulations: Official rules governing development and land use.
• Tariffs: A schedule or list of charges or fares; a system of duties charged by a government on imports or exports.
• Capital: The wealth owned or used in business by an individual.
• Remuneration: Reward; pay; to pay for in money or the equivalent.
• Stakeholders: A person or group owning a significant percentage of a company's shares.
• Output: The quantity or amount of something produced in a specified period.

Motivational