UNIT 1

1. What is the definition of “economics”?

Economics is the study of how people choose to use resources to best satisfy human
demand.
13. What are two branches/ types of economics?
Economics can be divided into microeconomics and macroeconomics
14. What is the economic theory of Adam Smith?
It is the Classical School.
15. What is the economic theory of Adam Smith about?
It says that because of their own interests, people produce goods and wealth that
benefit all society.
17. What is the economic theory of Karl Marx?
It is Marxism.
18. What is the economic theory of Karl Marx about?
Marx believed that owners’ exploitation of labor leads to social unrest and class
conflict, so laborers should own and control means of production , in order to ensure
the social and economic stability
20. What is the economic theory of Keynes?
It is Keynesian School.
21. What is the economic theory of Keynes about?
The theory of Keynes describes how governments use macroeconomic policies to
regulate the economy, ensuring the social and economic stability.
UNIT 2
3. What is market economy? What is the definition of market economy?
Market economy is an economic system in which economic relations are regulated by
the law of supply and demand. các quan hệ kinh tế
6. What is planned economy? What is the definition of planned economy?

Planned economy is an economic system in which all production, distribution and

consumption quotas are fixed beforehand by the government
9. What is mixed economy? / What is the definition of mixed economy?
- It is an economic system in which some goods and services are produced by the
government and some by private enterprise
UNIT 3
1. What are 3 important themes of microeconomics?
- 3 important themes of microeconomics are: the allocation of scarce resources, the
role of prices and the role of markets.
4. What are limited resources of consumers?

The limited resources of consumers are their incomes

7. What are resources of workers?
Resources of workers are their time and talent, knowledge, working experience, etc.
9. What are resources of firms?
Resources of firms are human resources, financial resources, production capacity,
technology, management ability, reputation (trade mark), brands, and so on.
12. Who makes decisions on the allocation of resources in the planned economy?

The Government fixes all production, distribution and consumption quotas beforehand
15. What do consumers make trade-offs normally based on?
Consumers make trade-offs normally based on their incomes and their preferences.
16. What is the major role of prices?
All of the trade-offs made by consumers, workers and firms are based on the prices.
17. How are prices set in the planned economy?
In the planned economy, prices are set by the government.
18. How are prices set in the market economy?
In the market economy, prices are determined by the interactions of consumers,
workers and firms.

UNIT 4
1. What are two major macroeconomic policies?
They are monetary policy and fiscal policy
2. Who supervises monetary policy?
The Central Bank of each country supervises monetary policy.
3. What does monetary policy control?
It controls the money supply (lượng cung tiền) of a nation.
4. Who supervises fiscal policy?
The Ministry of Finance supervises fiscal policy.
5. What does fiscal policy control?
It controls the government’s revenue and spending
6. What are the main objectives of macroeconomic policies?
The main objectives of macroeconomic policies are: to promote economic growth, to
control inflation (MP) and to reduce unemployment rates.(FP)
7. What is the definition of macroeconomics?
- Macroeconomics is the branch of economics that studies overall economic trends
within one economy and interactions among different economies in the world.
8. What do economic trends include?
Economic trends include employment levels, economic growth, balance of payments,
inflation and so on.
UNIT 5
13. What is demand curve?
Demand curve is a graphic representation of the relationship between product price
and the quantity of the product demanded.
14. What is supply curve?
Supply curve is a graphic representation of the relationship between product price and
the quantity of the product supplied.
16. What factors cause the whole demand curve shift to the right or the left?
Shift factors cause the whole demand curve shift to the right or the left.
18. What does the law of demand describe?
When other things are constant, if price of goods increases, the quantity demanded
will decrease and vice versa.
19. What does the law of supply describe?
When other things are constant, if price of goods increases, the quantity supplied will
increase and vice versa.
21. If the national income increases, what will happen to demand of a good?
If national income increases the aggregate demand of a good will increase.
Or
An increase in national incomes will cause the whole demand curve shift to the right.
22. If the national income decreases, what will happen to demand of a good?
If national income decreases the aggregate demand of a good will decrease.
Or
A decrease in national incomes will cause a shift of the whole demand curve to the
left.
25. How does high technology influence supply of a good or service?
High technology can help companies to produce more goods and services, so the
aggregate supply will increase.
Or
This is illustrated in a graph as the shift of the whole supply curve to the right.

UNIT 6
1. Where do the government revenues come from?
Or: What are sources of the government revenues?
- The government revenues mostly come from taxation.
2. What are 2 types of funds generated from taxation?
They are trust funds and federal funds.
3. What are trust funds?
Trust funds are the government revenues generated from payroll taxes including social
(national) insurance and health insurance.
4. What are trust funds used for?
Trust funds are used for social security and medicare.
5. What are federal funds?
Federal funds are the government revenues generated from income taxes, customs
duty, excise tax and so on.
6. What are federal funds used for?
Federal funds are used for building infrastructure, paying salaries for state employees,
running the government body.
Or:
Federal funds are used for the government projects and programs.
7. How can the government borrow money?
The government borrows more money by issuing and selling bonds or other types of
government securities.
8. 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.
9. Who does the government borrow money from?
The government borrows money from itself and from the public.
10. What is the money that the government borrows from itself called?
It is called debts held by federal accounts.
11. What is the money that the government borrows from the public called?
It is called debts held by the public.
UNIT 7: FISCAL POLICY
1. What is fiscal policy?
Fiscal policy is a government policy related to taxation and public spending.
2. What is the main objective of fiscal policy?
The main objective of fiscal policy is to maintain economic growth, high employment
and low inflation.
4. What is contractionary fiscal policy?
Fiscal policy is contractionary when taxation is increased or public spending is
reduced.
5. What is deficit?
Deficit is the total amount by which money spent is more than money received.
6. What is deficit spending?
Deficit spending is a situation in which a company or especially a government spends
more money than it collects for a given period of time.
Or
What is government’s deficit spending?
Government’s deficit spending means spending funds obtained by borrowing or
printing instead of taxation.
10. What is inflation rate?
Inflation rate is the rate at which prices increase overtime causing the value of money
to fall.
16. When is deficit spending harmful for the economy?
Deficit spending is harmful for the economy when unemployment is low or inflation
is high.
17. Under what circumstances can fiscal policy be expansionary?
Fiscal policy can be expansionary when the economy is not growing fast enough or
unemployment is too high.
18. Under what circumstances can fiscal policy be contractionary?
Fiscal policy can be contractionary when the economy is growing too fast or inflation
is high.
19. What factors should be considered in making decisions on the fiscal policy?
They are the level of economic growth or unemployment likely in the future, political
considerations, fiscal policies of other countries and the requirements of the IMF.
24. What are the purposes of expansionary fiscal policy?
It is used for creating jobs and developing the economy.
25. What are the purposes of contractionary fiscal policy?
It is used for slowing down the economy and reducing inflation
UNIT 8: TAXATION
1. What is the primary function of taxation?
The primary function of taxation is to raise revenue to finance government
expenditure.
2. What is the function of indirect excise duties?
The function of indirect excise duties is to dissuade people from consuming
unnecessary goods and services.
3. What is the function of income taxes?
Income tax is one of the ways, in which government can redistribute wealth.
7. How do individuals evade tax?
Self- employed people and people with part-time jobs don’t declare their incomes to
the tax offices.
8. How can highly-paid employees reduce their income tax liability?
To reduce income tax liability, highly-paid employees receive lots of perks instead of
taxable money such as company cars, free health insurance and subsidized lunches
10. What is one of the ways for companies to avoid tax on profits?
Companies can bring forward capital expenditure on new factories, machines and so
on so that at the end of the year all the profits have been used up.
13. What is a progressive tax?
A progressive tax is the tax imposed at a higher rate on higher incomes
UNIT 11
1. What is a medium of exchange?
Medium of exchange is anything that is widely accepted as payments for goods and
services and settlements of debts.
10. What is barter economy?
Barter economy is the economy in which goods and services are traded directly
without the use of money.
16. What is a standard of deferred payment? Or unit of account over time?
As a standard of deferred payment, money is used to make payments for debts in the
future.
18. If you buy a good on credit, how do you make payments for that good?
Firstly you have to pay a deposit, then you have to make regular repayments until the
debts are used up.
UNIT 12: MONETARY POLICY

1. What is the monetary policy?

2. What are the objectives (or goals) of monetary policy?

The objectives of monetary policy are to promote economic growth and to keep
inflation under control.
7. What happens if the Central bank increases the reserve requirement?
If the Central increases the reserve requirement, it contracts the money supply; banks
have to keep more in reserve so they have less money to lend out.
8. What happens if the Central bank reduces the reserve requirement?
If the Central bank reduces the reserve requirement, it expands the money supply;
banks have to keep less in reserve so they have more money to lend out.
10. What happens if the central bank increases the discount rate?
If the central bank increases the discount rate, it contracts the money supply.
11. What happens if the central bank reduces the discount rate?
If the central bank reduces the discount rate, it expands the money supply.
12. What will happen if the Central banks buy government securities?
If the Central banks buy government securities, the money supply will increase.
13. What will happen if the Central banks sell government securities?
If the Central banks sell government securities, the money supply will decrease.
14. What are
?
Open market operations refer to the buying and selling of government securities by
the Central Bank on the open market.
18. Under what circumstance should monetary policy be expansionary?
Monetary policy should be expansionary when unemployment is high or economic
growth is low
19. Under what circumstance should monetary policy be restrictive?
Monetary policy should be restrictive when inflation is too high.
20. What is expansionary monetary policy?
Monetary policy is expansionary when the Central bank reduces reserve requirements
or discount rates or buys more government securities.
21. What is restrictive monetary policy?
Monetary policy is restrictive when the Central bank increases reserve requirements or
discount rates or sells more government securities.
22. Who are depositors of a bank?
A bank's depositors are the people who have accounts with that bank.
23. What are objectives of expansionary monetary policy?
The objectives of expansionary monetary policy are to promote economic growth and
create more jobs.
23. What is the objective of restrictive monetary policy?
The objectives of restrictive monetary policy are to reduce inflation.
24. What can banks do if they are short of reserves?
If they are short of reserves, banks can borrow money from their bank (the Central
bank).
UNIT 14
4. What is an OTC (over-the-counter) market?
What are features of an OTC market?
An OTC market is the market in which transactions are made throughout the
day and via communication instruments such as telephone or computer link.
Or:
An OTC market is the market which hasn’t got fixed hours or a physical
meeting place.
6. What is exchange rate?
Exchange rate is the rate at which the currency of one country or region can be
exchanged for that of another country or region.
UNIT 15
1. Based on types of financial instruments, how are securities markets classified?
They are classified into equity markets and debt markets
2. What are equity markets?
Equity markets are the markets in which equity instruments (shares) are traded
4. What are debt markets?
Debt markets are the markets in which debt instruments (công cụ nợ) are traded

1.What is the reserve requirement?

2.What are the function of money?
3, What are the roles of insurance?
4. What are the main objectives of macroeconomic policies?
5. When is deficit spending harmful for the economy?

7.When is a market in equilibrium?

2.Where do tax revenue come from?
3.What is a medium of exchange?
4.What is the forward transaction?
2.What is economics theory of Karl Marx?

16. What is the major role of prices?

4. Who supervises fiscal policy?

3.What is quantity demanded?

3.How are trust fund used ?
5.When is there a deficit?
1. What is the primary function of taxation?