Basic Concepts in Economics and Finance Quiz

The fundamental issue of limited resources and unlimited wants.

Money is a medium of exchange and not a direct input in the production process.

Consumers buy more of a good when its price decreases and less when its price increases.

The formula for calculating interest on a principal amount over time.

The cost of forgoing the next best alternative when making a decision.

The current value of a future sum of money, discounted at a given interest rate.

The total value of goods and services produced in a country over a specific time period.

A tax that takes a larger percentage of income from low-income earners.

A measure of the profitability of an investment.

In perfect competition, prices are determined by market forces, not individual firms.

The central bank's management of money supply and interest rates to achieve economic goals.

The extra benefit or satisfaction gained from consuming an additional unit of a good or service.

The formula for calculating the total amount after interest compounds over time.

A measure of how much quantity demanded of a good responds to a change in price.

A measure of the profitability of an investment, calculated as the present value of future cash flows minus the initial investment.

The relationship between the price of a good, the consumer's income, and the prices of other goods.

The relationship between the quantity of output produced and the inputs of labor and capital.