Economics important Questions with Answers 

1. **Who is recognized as the founding figure of economics?**

- **Answer**: **Adam Smith**².

2. **What are the three fundamental economic predicaments?**

- **Answer**: The three fundamental economic predicaments are:

- **Scarcity**: Limited resources in relation to unlimited desires.

- **Choice**: The necessity to make decisions due to scarcity.

- **Opportunity cost**: The value of the next best alternative forgone when a choice is made².

3. **How do full employment, price stability, economic growth, and inflation reflect a country's economy?**

- **Answer**: These factors indicate the overall well-being of an economy:

- **Full employment**: Signifies a robust labor market.

- **Price stability**: Reflects controlled inflation.

- **Economic growth**: Demonstrates a flourishing economy.

- **Inflation**: Impacts purchasing power and overall stability².

4. **What is the distinction between macroeconomics and microeconomics?**

- **Answer**: Macroeconomics examines the economy as a whole (like a forest), while microeconomics focuses on individual components (like trees) such as households, firms, and markets².

5. **What are Giffen goods?**

- **Answer**: Giffen goods are those that people consume more of when their prices rise. They defy the usual demand curve behavior³.

6. **Who invests significant amounts in stocks, property, or other ventures with risk for potential gain?**

- **Answer**: Such individuals are referred to as **speculators**³.

7. **Which stage of the product life cycle generally has high unit costs?**

- **Answer**: The **introductory stage** tends to have higher costs per unit³.

8. **Which bank provides financing for exports and imports?**

- **Answer**: The **EXIM Bank** is responsible for financing exports and imports³.

9. **What type of unemployment results from an economic depression?**

- **Answer**: **Cyclical unemployment** occurs during economic downturns³.