1. Economics is a natural process of Human Development.

It is also the study of people, choices

and behaviour.
2. Macroeconomics is a branch of economics which is concerned with the overall behaviour and
performance of the economy as a whole while Microeconomics is the study of economics
behaviour of a particular individual firm or household; a study of a particular unit.
3. Land, Labor, capital and entrepreneur.
4.

Primitive/ Slavery/Wage Feudal Capitalist Socialist

Communal Slavery
Abundance Surplus Agricultural Industrial Profit
revolution
Stone used as Slavery plantation Manufacturing Owned by state
tools industry
Personal/Basic Farms and Social class Free market
consumption domestic trade
animals
Tribes Land Lord Free
(farmers/peasant) competition
Survival of the Money Free enterprise
Fittest
Equal work for Banks Monopoly
men and woman capitalist
Primitive colonialism Imperialism
property
PRIVATE Capital flight
PROPERTY

5. Classical Economics is a school of thought of the Classical Economist Adam Smith, Jean
Baptiste- Sy and David Ricardo this school of thought believe in the free trade / Laiseez Faire and
little government intervention while the Keynesian Economics believe that the government need
to intervene through pump priming.
6. In the market economy the ownership of the means of production is in the hand of private
sectors or capitalist while in the Command Economy the ownership of the means of production
is in the government.
7.
8.
9
10.
11.
12.
13.
14. States that as an individual increase his consumption of a product, there is a decline in the
marginal utility.
15. The average product of labor is the output product while the marginal product of labor is the
change in output per unit change.
16. Diminishing marginal return as you add variable resources to fixed resources output will
eventually decrease.
17. Cost of production refers to the total sum of money needed for the production of a particular
quantity of output.
18. Opportunity Cost refers to the value of what you have to give up in order to choose
something else.
19.
20. Perfect Competition

 The ideal market structure where buyers and seller can find a specific product
 Each individual player in the market is relatively small cannot influence the market as
whole.
 Products are Homogenous
Pure Monopoly

 There is only one supplier of a product or service

 Firms are price makers.
Oligopoly

 It is where the market is dominated by a small or a few number of firms

 They compete by offering warranties
Monopolistic Competition

 A market structure in which there are many sellers who are supplying good that are
close, but not perfect substitutes.
 Within each product group, products and firms are different but close enough to
compete with each other
21. Nominal values are those not adjusted while real values are those adjusted.
22. GDP is the market value of all finished goods and services produced within a country in a
year. It is commonly used as a measure of output or economic activity. Only includes final goods.
It does not include goods.

23. Income Approach

Expenditures Approach
24.
25.
26. Inflation is a phenomenon of rising prices of goods and of factors of production.
CAUSE OF INFLATION

 Govt. prints too much money

 Demand pull inflation
 Cost push inflation
When inflation occurs the economy might fall.
27. Unemployment refers to the condition and extent of joblessness within an economy
28. Frictional – transitional type of unemployment which happens when people move from one
job to another
Cyclical – results from the ups and downs of business cycle of the country
- Exist when the overall demand for labor is low
- Also occurs when there is a recession in the economy
Structural – results from the mismatch between the available skill and the requirement in
the labor market.
Seasonal – results from seasonable changes in the labor supply.
29. Medium of Exchange – it is use to exchange to goods and services.
Amount of Account
Store of Value – the value of different goods can be compared across time and space
30. What is money supply? How is the supply of money determined?
31. Fractional reserve money is a banking system in which banks only hold a fraction of the
money their customers deposit as reserve. Banks operate by borrowing funds – usually by
accepting deposits or by borrowing in the money markets. Banks borrow from individuals
businesses, financial institutions and government with surplus funds (savings).
32. Bond markets refers to the collection of markets and exchanges where the issuing and
tracking of equities (stocks of publicly held companies).