#1
Which of the following is a basic economic principle?
Opportunity cost
ExplanationThe value of the next best alternative forgone
#2
What does GDP stand for in economics?
Gross Domestic Product
ExplanationTotal value of all goods and services produced in a country
#3
Which of the following is not considered a factor of production?
Technology
ExplanationInput used in the production process
#4
What does the term 'scarcity' imply in economics?
Limited resources to fulfill unlimited wants
ExplanationBasic economic problem of insufficient resources
#5
What is the concept of 'opportunity cost' in economics?
The value of the next best alternative forgone
ExplanationCost of forgoing the next best alternative when making a decision
#6
What is the primary purpose of fiscal policy?
To stabilize the economy through government spending and taxation
ExplanationGovernment's use of spending and taxation to influence the economy
#7
What is the primary goal of monetary policy?
To regulate interest rates and money supply
ExplanationControl of money supply and interest rates to achieve economic goals
#8
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and sellers
ExplanationLarge number of buyers and sellers with identical products
#9
What is the formula to calculate price elasticity of demand?
Percentage change in price / Percentage change in quantity demanded
ExplanationMeasure of responsiveness of quantity demanded to price changes
#10
What is the primary function of central banks in an economy?
Regulating interest rates
ExplanationControlling money supply and influencing interest rates
#11
What is the economic concept behind the term 'inflation'?
Persistent rise in the general level of prices
ExplanationGeneral increase in prices over time
#12
Which of the following is an example of a regressive tax?
Sales tax
ExplanationTax that takes a larger percentage from low-income earners
#13
What is the role of the Federal Reserve System in the United States?
Supervise banks and financial institutions
ExplanationCentral banking system overseeing monetary policy
#14
What does the term 'elasticity' refer to in economics?
The responsiveness of quantity demanded to a change in price
ExplanationSensitivity of quantity demanded to price changes
#15
According to the law of demand, what happens when the price of a good increases?
Demand decreases
ExplanationInverse relationship between price and quantity demanded