What is the main function of central banks in an economy?
Regulating interest rates
Creating fiscal policy
Issuing currency
Conducting elections
#3
In economics, what does the term 'ceteris paribus' mean?
All else equal
Supply equals demand
Price elasticity
Cost-benefit analysis
#4
What is the primary purpose of fiscal policy?
To control inflation
To regulate the money supply
To manage government spending and taxation
To influence interest rates
#5
What is the primary goal of monetary policy?
To manage government spending
To regulate the money supply and interest rates
To control inflation through taxation
To influence aggregate demand through fiscal measures
#6
Which of the following is a characteristic of a perfectly competitive market?
Few buyers and sellers
Product differentiation
Barriers to entry
Homogeneous products
#7
What is the 'invisible hand' concept in economics associated with?
Adam Smith
John Maynard Keynes
Milton Friedman
Karl Marx
#8
What does the term 'opportunity cost' refer to in economics?
The cost of producing one more unit of a good
The total cost of production
The highest-valued alternative that must be sacrificed to choose an option
The cost of inputs used in production
#9
Which of the following is a measure of income inequality?
Consumer Price Index (CPI)
Gini coefficient
Unemployment rate
Aggregate demand
#10
What does the term 'elasticity of demand' measure?
How much a change in price affects quantity demanded
The slope of the demand curve
The total revenue earned from selling a product
The responsiveness of quantity demanded to changes in income
#11
Which economic principle suggests that as the price of a good increases, the quantity demanded decreases?
Law of demand
Law of supply
Law of diminishing marginal utility
Law of diminishing returns
#12
Which economic concept explains the idea that individuals and firms often act in their self-interest, leading to positive outcomes for society as a whole?