UNIT 1:

MICROECONOMICS AND MACROECONOMICS

[ MICROECONOMICS]
1. What is Microeconomics?
Microeconomics is the study of decisions made by people and businesses
regarding the allocation of resources and prices of goods and services.
2. What is Microeconomics about?
Microeconomics is the study of decisions made by people and businesses
regarding the allocation of resources and prices of goods and services.
Microeconomics is about the limited of resources:
+ consumers have limited income
+ workers have limited the number of working hours
+ firms have limited budgets or financial resources.
It's also about the ways to make the most of the limits
3. What are 3 main themes of Microeconomics?
Microeconomics focus 3 main themes:
- The first idea of making optimal trade-offs. Because resources are limited,
consumers, workers or firms have to make trade-offs.
- Next is the role of price. All of the trade-offs made by consumers, workers and
firms are determined by the prices; and prices are set by the Government.
- The last main theme is the central role of markets. Prices are determined by
the interactions of consumers, workers and firms by the law of supply and
demand
4. Examples of trade-off made by CONSUMERS?
Because consumers have limited income, so they have to:
- Trade-off the purchase of some goods with others
- Also trade-off the current consumption with future consumption.
5. Examples of trade-off made by WORKERS?
Because workers have limited the number of working hours, so they must:
- Trade-off working now with continued education
- Trade-off in their choice of employment
- Also trade-off labor for leisure.
6. Examples of trade-off made by FIRMS?
Because firms have limited financial resources, so:
- They must decide whether to hire more workers, build new factories or do
both.
- They also trade-off producing one set of products with another.
7. What does CONSUMER theory describe?
Consumer theory describes how consumers can maximize their well-being by
making optimal trade-offs. Because of limited income, so they have to
- Trade-off the purchase of some goods with others
- Also trade-off the current consumption with future consumption.
8. What does FIRMS theory describe?
Firms theory describes how firms can maximize profits by making optimal
trade-offs. Because of limited financial resources, so
- They must decide whether to hire more workers, build new factories or do
both.
- They also trade-off producing one set of products with another.

[ MACROECONOMICS]
1. What is Macroeconomics?
Macroeconomics is to study the behavior of the economy as a whole and entire
industries such as GDP, unemployment, inflation, balance of payment, and so
on.
2. What is the goal of Macroeconomics?
The goal of Macroeconomics is to look at the overall economic trends such as
employment levels, economic growth, balance of payment, inflation, and so on.
3. What are the 2 Macroeconomic policies?
 They are Monetary policy and Fiscal policy.
- Monetary policy controls the nation’s supply of money. Tools of Monetary
policy are RR, DR, and OMO, which is supervised by the Central bank.
- Fiscal policy controls the Government’s revenue and spending. Tools of fiscal
policy are Government spending and taxation, supervised by the Ministry of
Finance.
4. What are the objectives of 2 macroeconomic policies?
The basic objectives of 2 main Macroeconomics policies are to promote
economic growth, to keep inflation under control and to maintain economic
stability.
5. How do Central banks control the economy?
Central banks control the economy by increasing or regulating the money
supply to keep the economy from overheating or slowing down too quickly.
6. What is the relation between Microeconomics and Macroeconomics ?
These 2 studies of economics appear to be different, but actually interdependent
and complement one another and many overlapping issues between the 2 fields.
(Hai nghiên cứu kinh tế học này có vẻ khác nhau, nhưng thực chất lại phụ
thuộc lẫn nhau và bổ sung cho nhau do có nhiều vấn đề chồng chéo giữa hai
lĩnh vực)

UNIT 2: PUBLIC FINANCE

1. What are the main sources of Government revenue?
There are two main sources: Tax revenue and Borrowing
- Tax revenue comes from 3 major sources:
+ Income taxes paid by individual
+ Payroll taxes paid by workers and employers
+ Corporate income taxes paid by businesses
+ Other taxes: customs duties and excise taxes
- The second main source of Revenue is Borrowing. Government borrows
money by issuing bonds and other types of securities.
 2. What are Trust funds? What are Trust funds used for?
- Trust funds are Government revenue which comes from payroll taxes
- Trust funds are used to pay for specific Government programs: social security
and medicare
3. What are Federal funds? What are federal funds used for?
- Federal funds are general revenue which comes from personal income taxes
and corporate income taxes.
- Federal funds are used to conduct the annual appropriation process.
4. Federal debt is the sum of the debt held by the public.
5. What is debt held by the public? What is debt held by a federal
account?
- Debt held by the public (nợ công) is the total amount of money that
Government owes to creditors in the general public, including citizens, foreign
investors or Government of foreign countries.
- Debt held by Federal accounts is the total amount of money that Government
borrows from itself. When Trust fund accounts run a surplus, the Treasury takes
the surplus and uses it to pay for other kinds of federal spending.
6. What is Government spending?
Government spending is the total amount of money that the government spends
in a particular period

UNIT 3: FISCAL POLICY

1. Two Macroeconomics policies?
- Monetary policy controls a nation’s money supply. Tools of Monetary policy
are RR, DR, OMO, is supervised by Central banks
- Fiscal policy controls Government’s revenue and spending. Tools of this
policy are public spending and taxation, which is supervised by the Ministry of
finance.
2. What is expansionary fiscal policy?
- Fiscal policy is expansionary when taxation is reduced and public spending is
increased ( T↓ ; G↑)
- With the aim to stimulate total spending/ aggregate demand in the economy.
- It occurs when the economy is not growing fast enough and unemployment is
high.
3. What is contractionary fiscal policy?
- Fiscal policy is contraction when taxation is increased or public spending is
reduced ( T↑ ; G↓)
- With the aim to restrict total spending in the economy.
- It occurs when the economy overheating or inflation is high.
4. What are factors affecting decisions on fiscal policy?
- Firstly, taking about inside factors:
+ The first inside factor is the Level of economic growth, unemployment,
inflation can affect Government revenue or Government spending.
+ The second factor is whether or not to run a budget deficit by spending more
money than G (public spending) raise.
+ Decision on a fiscal policy is also influenced by political considerations such
as the role of Government in the economy or public reaction to a particular
course of action.
- Secondly, have outside factors such as:
+ Fiscal policies of other countries
+ Requirement of International Moneytary Fund or world bank.
5. What is the deficit? How does the Government finance the deficit?
- Deficit (thâm hụt) happens when the Government spent more than it receives.
- Deficit can be financed in 2 ways: borrowing or printing money. If the
Government borrows money, it will reduce the supply of money in the
economy. If the Government prints more money, it will increase the supply of
money in the economy.
6. What is deficit spending?
Deficit spending is the spending funds obtained by borrowing or printing money
instead of taxation that can be helpful or harmful for the economy
7. When is deficit spending helpful for the economy?
- When unemployment is high or the economy is stagnant
- The Gov can undertake projects that use idle workers.
- Jobs create income that people spend on purchases.
- Then the economy will expand.
8. When is deficit spending harmful to the economy?
- When unemployment is low or the economy is overheating.
- The additional government spending can lead to inflation
- When prices increase, people purchase fewer goods
- Then the economy tends to shrink

UNIT 4: MONEYTARY POLICY

1. What are three main objectives of Monetary policy?
- The most important is to manage inflation (lạm phát)
- The second objective is to reduce unemployment (thất nghiệp)
- The last is to promote moderate and long-term interest rates (lãi suất)
2. What are three main tools of Monetary policy?
- Reserves requirement
- Discount rate
- Open market operations with the aim to regulate the monetary supply.