#1
Which of the following is NOT a broad economic goal?
High government spending
ExplanationContrary to economic stability and efficiency.
#2
Which of the following indicators is typically used to measure economic growth?
Gross Domestic Product (GDP)
ExplanationSum of all goods and services produced.
#3
What is the primary tool used by central banks to implement monetary policy?
Interest rates
ExplanationAdjusting the cost of borrowing.
#4
What does the term 'fiscal policy' refer to?
Government's use of taxation and spending to influence the economy
ExplanationManaging economic activity.
#5
Which of the following is NOT a component of aggregate demand?
Imports
ExplanationNot included in overall demand.
#6
Which of the following is a characteristic of a recession?
Negative GDP growth
ExplanationEconomic contraction.
#7
Which of the following is NOT a typical function of money in an economy?
Producer of goods
ExplanationMoney serves as a medium of exchange, store of value, and unit of account, not a producer of goods.
#8
What is the primary goal of monetary policy?
To control inflation
ExplanationMaintaining stable prices.
#9
What is the term for the situation when the economy is producing at its maximum potential output?
Full employment equilibrium
ExplanationAll available resources are utilized.
#10
Which of the following is a potential consequence of high inflation?
Loss of confidence in currency
ExplanationReduced purchasing power.
#11
Which of the following is an example of an expansionary fiscal policy measure?
Increasing government spending
ExplanationBoosting demand and economic growth.
#12
What is the term for a situation where the inflation rate is negative?
Deflation
ExplanationGeneral decline in prices.
#13
What is the term for the situation when an economy experiences both inflation and high unemployment simultaneously?
Stagflation
ExplanationCombination of stagnant growth and rising prices.
#14
What is the term for the situation when the government spends more money than it collects in revenue?
Budget deficit
ExplanationShortfall in government finances.
#15
According to classical economic theory, what is the best way to achieve long-term economic growth?
Promoting free trade
ExplanationEncouraging efficient resource allocation.
#16
In the context of economic policy, what does the term 'crowding out' refer to?
The displacement of private investment due to government borrowing
ExplanationReduced private sector activity.
#17
What is the primary objective of supply-side economics?
To promote economic growth through policies that encourage production
ExplanationFocus on boosting supply and productivity.