#1
What does GDP stand for in economics?
Gross Domestic Product
ExplanationMeasure of a country's economic performance.
#2
What is the main function of central banks in an economy?
Regulating interest rates
ExplanationControl money supply and interest rates to stabilize economy.
#3
In economics, what does the term 'ceteris paribus' mean?
All else equal
ExplanationHolding all other factors constant.
#4
What is the primary purpose of fiscal policy?
To manage government spending and taxation
ExplanationInfluence economy through government spending and taxation.
#5
What is the primary goal of monetary policy?
To regulate the money supply and interest rates
ExplanationControl money supply to achieve economic goals.
#6
Which of the following is a characteristic of a perfectly competitive market?
Homogeneous products
ExplanationProducts are identical, buyers have perfect information.
#7
What is the 'invisible hand' concept in economics associated with?
Adam Smith
ExplanationConcept of self-regulating markets.
#8
What does the term 'opportunity cost' refer to in economics?
The highest-valued alternative that must be sacrificed to choose an option
ExplanationCost of the next best alternative forgone.
#9
Which of the following is a measure of income inequality?
Gini coefficient
ExplanationQuantifies distribution of income or wealth within a population.
#10
What does the term 'elasticity of demand' measure?
How much a change in price affects quantity demanded
ExplanationSensitivity of quantity demanded to changes in price.
#11
Which economic principle suggests that as the price of a good increases, the quantity demanded decreases?
Law of demand
ExplanationInverse relationship between price and quantity demanded.
#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?
Invisible hand
ExplanationSelf-interest leads to unintended benefits for society.