Basic economics

Dear students!

Of course, you won't learn economics in 30 minutes. It's nonsense and it isn't the aim of this lesson.

I am also aware of the fact that many important factors, mainly political ones, are missing from this short video. Personally, I don't really share the idea that "economy works in a simple mechanical way like a machine", and I don't believe in generalizations like "that's human nature", either. However, this clockwork explanation of economics can be useful to us, because it contains a lot of useful vocabulary and some (far from total) understanding of how economy works. We will divide this video into several parts. 

1) watch the video from the beginning to 7:11

https://www.youtube.com/watch?v=PHe0bXAIuk0

2) answer these questions (sometimes one-two words will be enough) and send your answers:

Economics_questions1-1.docx

According to this explanation:

1) what are the three main forces that drive the economy?

2) what is transaction? What does it consist of?

3) what is price in this model?

4) what is market?

5) what does economy consist of?

6) which state institution is the biggest buyer and seller?

7) what is the role of the Central Government?

8) what is the role of the Central Bank?

9) who are the two main participants of a credit transaction?

10) what does a credit consist of? (principal +  __________ )

Note. In the context of borrowing, principal is the initial size of a loan or a bond.

11) what does interest rate influence?

12) what is debt to the lender and what is debt to the borrower?

13 how can a credit transaction be settled?

14. what does increased spending mean to the economy?
15. what does a creditworthy borrower have?
16. what is productivity growth?
17. when does productivity matter more and when does credit?
18. Productivity grows steadily in this model so it isn’t the main driver of changes, but credit/debt are considered to be big drivers of economy. Why?