Tiêng an h chuyên ngành 1 câu hỏi

They can reduce taxes and increase government spending in the stagnant economy, and reduce government spending and increase taxes in the overactive economy human interaction within mark

1 What do resources include?

Resources include the time and talent people have available, the land, buildings, equipment, and other tools on hand, and the knowledge of how to combine them to create useful products and services

2 What can be considered as important choices?

Important choices involve how much time to devote to work, to school, and to leisure time, how many dollars to spend and how many to save, how to combine resources to produce goods and services, and how to vote and shape the level of taxes and the role of government

3 What purpose do people use their resources for?

People use their resources to improve their well-being

4 What does the term “well-being” mean?

Well-being means the satisfaction that people gain from / gained from the consumption of

goods & services, the time shared with your relatives, friends, and so on

Theory of Adam Smith is The Classical School It sa ys that people who

acted in their own self-interest produced goods and wealth that bene ited all of society

He also believed that governments should not restrict or interfere in the markets because they could regulate themselves to produce wealth at maximum ef iciency Therefore, classical theory forms the basis of capitalism

9 What is the difference between the economic theory of Adam Smith and Marxism theory?

Adam Smith believed that because of their own interests, people produce goods and wealth that bene it all of society He also believed that governments should not restrict or interfere in the markets because they could regulate themselves to produce wealth at maximum ef iciency Therefore, classical theory forms the basis of capitalism

On the other hand,

Marxism states that capitalism will eventually fail because factory owners and CEOs exploit laborers to generate wealth for themselves Marx believed that labor exploitation leads to social unrest and class con lict, so laborers should own and control means of production in order to ensure social and economic stability

10 What does the recent economic theory of the Keynesian School indicate?

The theory of Keynes describes how governments can act within capitalistic economies to promote economic stability They can reduce taxes and increase government spending in the stagnant economy, and reduce government spending and increase taxes in the overactive economy

human interaction within markets Therefore, it can explain how people and Government behave in particular ways

14 What are means of production? What are factors of production?

Anything that people use for producing goods and services For example : tools,

equipment, machines,

A free market economy is an economic system in which the market is regulated by the law

of supply and demand Companies compete freely and there is no direct government intervention, but the government in luences the economy through its iscal and budgetary policies

5 What do you think are the disadvantages of a market economy?

6 What is a planned economy?

A planned economy is an economic system whereby the structure of market is deliberately planned by the state There is no real competition among companies, and private ownership doesn’t exist Production and consumption quotas are ixed beforehand by the government Means of production and channels of distribution are also state-controlled

7 Can companies compete freely in the planned economy?

There is no real competition among companies, and private ownership doesn’t exist

8 What do you think are the disadvantages of a planned economy?

9 What are the differences between a market economy and a planned economy?

1 In a market economy, market are regulated by the Supply & Demand, but they are

determined by the government in a planned economy

2 there is no direct government intervention in a free market economy whereas there

In a planned economy, government makes decisions on the allocation of scarce resources

2 Why are many microeconomic tools and concepts of limited relevance in Cuba and North Korea?

Because irms are told what how much to produce, and how to produce it; workers have little lexibility in choice of jobs, hours worked, or even where they live; and consumers typically have a very limited set of goods to choose from

The consumer theory describes how consumers based on their preferences, can maximize

their well-being by making optimal trade-off

(They have to decide when to enter the workforce, which job to do, who to work for.)

7 Give some examples explaining the trade-offs made by irms

Firms have 2 problems which they trade off

● irms have to trade- off hiring more workers with building more factories or do both ● irms also trade-off producing some kinds of products with the others

8 What limits or constraints does the Ford Motor Company have to face?

The Ford Motor Company faces limits in terms of the kinds of products that they can produce, and the resources available to produce them Ford is very good at producing cars and trucks, but it does not have ability to produce airplanes, computers or pharmacueticals It is also contrained in terms of inancial resources and the current production capacity of its factories

(Công ty Ford Motor phải đối mặt với các giới hạn về các loại sản phẩm mà họ có thể sản xuất và các tài nguyên có sẵn để sản xuất các sản phẩm đó Ford rất giỏi trong việc sản xuất

ô tô và xe tải, nhưng họ không có khả năng sản xuất máy bay, máy tính hoặc dược phẩm Họ cũng bị hạn chế về nguồn lực tài chính và năng lực sản xuất hiện tại của các nhà máy của họ.)

● Consumers, workers and irms have limited resource

● Therefore they have to make optimal trade-offs to maximize their well-being

The second theme is “the role of prices”: All the trade-off made by consumers,

workers and irms are based on prices

The last is “the central role of markets”: Describes how prices are determined in the

market

11 What are some limits in microeconomics?

● Consumer have limited income

● Workers have limited time, skills, health, education and experience

● Firms have limited capital , production capacity

12 What are resources of irms?

Resources of irms are human resources, inancial resources, production capacity, technology, management ability, reputation (trade mark), brands, and so on

13 What does microeconomics study?

Microeconomics is a branch of economics that explain how consumers, workers and irms behave while making decisions on the allocation of scarce resources Broadly speaking, microeconomics analyzes how the behavior of economic agents household and irms affect supply and demand for goods and services

They are monetary policy and iscal policy

● Fiscal policy controls Government revenue and spending It’s in the hand of the Ministry of inance

● Monetary policy which controls a nation’s money supply is supervised by each country’s Central Bank

Who supervises monetary policy?

The Central Bank of each country supervises monetary policy

What does monetary policy control?

It controls the money supply (lượng cung tien) of a nation

4 Who supervises iscal policy?

The Ministry of Finance supervises iscal policy

2 What are the main tools of monetary policy?

The main tools of monetary policy are reserve requirements, discount rates and open market operations

open market operations is the major and most common tool because it is faster for central bank to change money supply on open market operations than changing reserve requirement or discount rate

There’re some differences between macroeconomics and microeconomics

● Firstly, microeconomics studies individual and business decisions while macroeconomics looks at higher-up country and government decisions

● Secondly, microeconomics focuses on supply and demand and other forces that determine the price On the other hand, macroeconomics centers on economy-wide phenomena such as GDP, national income, in lation, etc…

● Lastly, microeconomics takes a bottom-up approach while macroeconomics takes a top-down approach

6 Why is it said that microeconomics and macroeconomics are interdependent and complement one another?

They are actually interdependent and complement one another because there are many overlapping issues between the two ields

(For example, increased in lation (macro effect) would cause the price of raw materials to increase for companies and in turn affect the end product’s price charged to the public.)

(Bởi vì có nhiều vấn đề chồng chéo giữa hai lĩnh vực Ví dụ, lạm phát gia tăng (hiệu ứng vĩ mô) sẽ khiến giá nguyên liệu thô tăng đối với các công ty và sau đó nó ảnh hưởng đến giá thành phẩm mà công ty tính cho công chúng.)

11 What are 2 branches of economics? What do they study?

The two main branches of economics are microeconomics and macroeconomics Microeconomics studies the actions of individuals and industries Macroeconomics studies the economic activity of an entire country and economy-wide phenomena

Demand refers to all the possible quantities of goods and services that buyers are willing

to buy at various prices while quantity demanded refers to the particular quantity of a

good or service that buyers are willing and able to buy at a certain price In addition ,

demand is in luenced by shift-factors whereas quantity demanded is in luenced by the price

3 How do prices of a good in luence its demand?

When other things are constant, A change in the price of a good causes a change in quantity demanded, if price of goods increases, the quantity demanded will decrease and vice versa

For example, if society’s income is higher, people (buyers) are willing and able to buy more

at various prices Therefore, demand will increase and the demand curve will shift to the right On the other hand, if society’s income is lower, people are willing and able to buy less at various prices So demand will decrease and the demand curve will shift to the left

● What are shift factors of supply?

Shift factors of supply are prices of inputs, technology, taxes and suppliers’ expectations

Analyzing one of shift-factors?

For example, if prices of inputs are higher, producers are willing and able to produce less

at various prices Therefore, supply will decrease and the supply curve will shift to the left

On the other hand, if prices of inputs are lower, producers are willing and able to produce more at various prices So supply will increase and the supply curve will shift to the right

5 What is “supply”?

Supply refers to all possible quantities of goods and services that sellers are able and willing to sell at various prices

6 What is the difference between “supply” and “quantity supplied”?

Supply refers to all the possible quantities of goods and services that sellers are able and

willing to sell at various prices while quantity supplied refers to the particular quantity

of a good or service that sellers are willing and able to sell at a certain price In addition, supply is in luenced by shift-factors whereas quantity supplied is in luenced by the price

7 6 How do prices of a good in luence its supply?

When other things are constant, A change in the price of a good causes a change in quantity supplied if price of goods increases, the quantity supplied will increase and vice versa

8 Will the supply curve of beer shift to the right or to the left if there is an increase in its production costs?

If there is an increase in beer’s production, the supply curve of beer shifts to the left

9 When is a market in equilibrium? ? What is excess demand ? What is excess supply ?

A market is in equilibrium when the quantity demanded is equal to quantity supplied at a certain price

Excess demand / Excess supply occurs when quantity demanded is more than quantity supplied / when quantity supplied is more than quantity demanded

Supply curve is a graphic representation of the relationship between product price and the quantity of the product supplied

14 If the national income increases, what will happen to demand for goods?

If national income increases the aggregate demand of a good will increase

Or An increase in national incomes will cause the whole demand curve to shift to the right

2 What is public inance concerned with ?

Public inance is concerned with how the government raises and spends money

3 How much is the Federal government going to collect in tax revenues in iscal year 2014?

(Chính phủ liên bang sẽ thu bao nhiêu tiền thuế trong năm tài khóa 2014?)

The federal government is going to collect $3 trillion in tax revenues in iscal year 2014

4 What type of taxes contributes the largest proportion of tax revenues?

Income taxes contributes the largest proportion of tax revenues

(What is the function of income taxes?

Income tax is one of the ways in which government can redistribute wealth.)

5 What are two types of funds from taxation?

Two types of funds from taxation are federal fund and trust fund

● Federal funds are the general revenues which include income taxes and corporate taxes and are used for general projects and programs basing on annual appropriation process ● Trust funds which include payroll taxes can be used only to pay for very speci ic programs such as Social Security and Medicare

6 What are federal funds?

Federal funds are the general revenues which include income taxes and corporate taxes

Federal funds are used for general projects and programs basing on annual appropriation

Trust funds are the government revenues generated from payroll taxes and can be

used only to pay for very speci ic programs such as Social Security and Medicare

8 For what purpose are these funds used?

(What are trust funds used for?)

Trust funds are used for speci ic Government programs such as social security and

medicare, welfare, public services

(What are Federal funds used for?)

Federal funds are used for general projects and programs such as for building

infrastructure, paying salaries for state employees, running the government body Programs can be different from year to year basing on annual appropriation process

(General public includes individuals or organizations in that country (domestic investors)

or in other countries (foreign/international investors)

What is the federal debt/ public debt?

⇨ The federal debt is the sum of the debt held by the public plus the debt held by

the federal account In detail, debt held by the public is the total amount the government

owes to all of its creditors in the general public Debt held by federal account is the amount of the money that Treasury has borrowed from itself

12 Who does the Federal Government owe money to?

Government owes money to its , foreign investors, foreign countries or other international inancial institutions (citizens The government borrows money from itself and from the public.)

13 What are payroll taxes?

Payroll tax is the tax imposed on wage or salaries of employees, paid by both employers and employees

14 What are main sources of government’s revenue?

Main source of tax revenues

● Income taxes paid by individual

● Payroll taxes paid by workers and employers

● Corporate income taxes paid by businesses

Main sources of government revenue are from tax revenue and borrowing Government revenue comes from many different kinds of taxes Among them, three main sources are individual income taxes, payroll taxes and corporate income taxes

In addition, government revenue comes from borrowing Borrowing is mainly achieved through the issuing of bonds

When the government spends more money than it takes in from tax revenues To make up the difference, the Treasury borrows money by issuing bonds

15 What are 2 ways for the treasury to sell government securities?

The treasury can sell government securities directly through its website or indirectly through banks or brokers

16 Where do the government revenues come from?

Or: What are sources of the government revenues?

- The government revenues mostly come from taxation

For example , if the government increases spending to build new highway, the

construction of the highway will create jobs Jobs create income that people spend on purchases, and the economy tends to grow On the other hand, when the government increases taxes, households and businesses have less of their income to spend, they purchase fewer goods and the economy tends to shrink

2 What is de icit spending? Is it useful or harmful for the economy? Why?

● What is de icit?

De icit is the total amount by which money spent is more than money received

● What is de icit spending? (What is government’s de icit spending?)

De icit spending is a situation of government budget in which the government spends more than it receives De icit spending is spending funds obtained by borrowing or printing instead

of taxation

De icit spending can be helpful for the economy when unemployment is high or the economy is slowing down On the other hand, it can be harmful for economy when unemployment is low or the economy is overheating

● When is de icit spending helpful for the economy?

De icit spending is helpful for the economy when unemployment is high or economic growth is low For example, when unemployment is high, the government can undertake projects that use workers who would otherwise be idle The economy will then expand because more money is being pumped into it

● When is de icit spending harmful for the economy?

De icit spending is harmful for the economy when unemployment is low and the economy

is overheating For example, when unemployment is low, de icit spending may result in

rising prices or in lation The additional government spending creates more competition for scarce workers and resources and this in lates wages and prices

increased The aim of expansionary policy is to stimulate total spending in the economy which known as aggregate demand and to promote economic growth

● Inside factors consist of the level of economic growth or unemployment likely in the

future, whether or not to run a budget de icit, and political considerations

● Outside factors include iscal policy of other contries and the requirements of the IMF

11 How does the government do to inance de icit?

There are two main ways to inance de icit (De icit spending can be inanced in 2 ways):

by borrowing or printing more money