1. What does it mean "markets are competive" ? Competive market contains two major decision-making units whose actions are coordinated through market exchanged.The first is the business firm,the second is the households 2. What is the basic economic problem ? The basic economic problem for any community is how to make the best use of its labor and other resources 3. What is " overstocked" ? 4. 5. What is a market ? A market is an arrangement by which buyers and sellers of a community interact to determine its price and quantity 6. What does Macroeconomic study ? Macroeconomic study overall economic trends such as employment levels,economic growth,and inflation 7. Why can we say macroeconomics is an important topic ? It is an important topic for many reasons.For one, macroeconomic performance is a central factor affecting the success or failure of nations.Countries that grow rapidly and without major imbalances are admired because their citizens enjoy high and rising living standards.At the opposite extreme are countries that stagnate and seem stuck in a situation of high inflation and high trade deficits. In addition, a government can have a major impact on its economic performance through its economic policies- through fiscal policy and monetary policy 8. How many policies are there in macroeconomic ? There are four policies in macroeconomic.They include fiscal policy,monetary policy,income policy and foreign economic policy 9. What is the fiscal policy ? Fiscal policy is carried out by the Ministry of Finance and can be divided into two parts,government expenditures and taxation.These two parts determine whether the government has a deficit or surplus in its budget.A careful fiscal policy is the basis of a stable macroeconomy 10. What do the fiscal deficits affect ? Fiscal deficits affect both the balance of payments and the rate of inflation 11. What is the monetary policy? 12. How is GNP different from GDP ? The difference between GNP and GDP is GDP concentrates only on domestic production of goods and services covering the economic activity which take place within the country's borders while GNP includes net international trade and investment 13. What does microeconomic deal with? Microeconomics deals with the economic behavior of individual economic agents-mainly households and firms,and of particular markets and industries 14. What is demand ? The demand for anything,at a given price,is the amount which will be bought at that price 15. How many meanings of the term "supply" ? What are they ? There are three meanings of the term "supply" . It may mean the total amount in existence,the term is often used in this sense when the total stock cannot be increased,or can be increased by only a small percentage,during the next year or two. The supply of anything which is currently produced may mean the normal output per unit of time Supply may also mean the amount offered for sale per unit of time 16. Distinguish 3 terms ,"demand","desire" and "needs" ? There is no doubt that many people who cannot afford a car would like one, and also that many children need more milk than they get.But unless desire or need is backed up by ability and willingness to pay,it does not affect the volume of sales. The demand for a thing,at a given price,is the amount which would,in fact, be bought at that price 17. What does microeconomics focus on ? The focus is on the prices and outputs of particular goods and services and on how markets interact to determine the allocation of scare resources among millions of alternative uses 18. What does internatinonal economics deals with ? International economics deals with the economic interdependence among nations.the pure theory of trade,the theory of commercial policy,foreign exchande markets and the balance of payments and adjustment in the balance of payments 19. How many theories are there in international economics ? There are two theories in international economichs .They include the theory of trade and the theory of commercial policy