Economics Questions and Answers

The law of supply says that a higher price will induce producers to supply a higher quantity to the market i.e. the higher the price, the greater the quantity supplied and vice versa.

If the income of consumer changes (upward or downward), the aggregate satisfaction of the consumer would also change (upward or downward) provided the prices remain the same. An increase in consumers' income will shift the budget line outwards while a decrease in consumers' income will shift the budget line inward.

The Gross Domestic Product is the total monetary or market value of all the goods and services produced within a country. It is used to measure the rate of growth in an economy.

Currency depreciation is a fall in the value of a currency in a floating exchange rate system. Therefore, a decrease in the price of the domestic currency in terms of a foreign currency is referred to as depreciation.

Scarcity explains the basic economic problem that the world has limited or scarce resoures to meet seemingly unlimited wants, and this reality forces people to make decisions about how to allocate resources in the most efficient way.