#1
What is the primary indicator used to measure the level of economic activity within a country?
Gross Domestic Product (GDP)
ExplanationGDP is the primary measure of economic activity within a country.
#2
What is the term for the total value of goods and services produced within a country's borders in a specific time period?
Gross Domestic Product (GDP)
ExplanationGDP measures the total value of goods and services produced within a country's borders.
#3
What economic indicator measures the percentage change in prices of a basket of goods and services over time?
Consumer Price Index (CPI)
ExplanationCPI measures inflation by tracking the change in prices of a basket of goods and services.
#4
What is the term for the percentage of the labor force that is unemployed and actively seeking employment?
Unemployment rate
ExplanationThe unemployment rate measures the proportion of the workforce without a job but actively seeking one.
#5
In economics, what does the term 'opportunity cost' refer to?
The cost of alternative choices
ExplanationOpportunity cost signifies the value of the next best alternative foregone when a decision is made.
#6
Which of the following is a characteristic of a recession?
Decrease in GDP
ExplanationRecession entails a decline in the Gross Domestic Product.
#7
Which of the following is NOT a component of Gross Domestic Product (GDP)?
Personal savings
ExplanationPersonal savings are not included in GDP calculations.
#8
What effect does an increase in interest rates typically have on consumer spending?
Decreases consumer spending
ExplanationRising interest rates usually lead to reduced consumer spending.
#9
Which of the following is an example of a fiscal policy tool used to stimulate economic activity?
Implementing expansionary government spending
ExplanationExpansionary government spending is a fiscal policy tool to boost economic activity.
#10
Which of the following is a characteristic of a boom phase in the business cycle?
Rapid economic growth
ExplanationA boom phase is marked by significant and rapid economic growth.
#11
In macroeconomics, what does the term 'stagflation' refer to?
High inflation and high unemployment
ExplanationStagflation describes a combination of high inflation and unemployment.
#12
Which of the following is a characteristic of a recessionary gap in the economy?
Potential output exceeds actual output
ExplanationA recessionary gap indicates that potential output exceeds actual output.
#13
Which of the following is NOT a characteristic of monopolistic competition?
Identical products sold by all firms
ExplanationMonopolistic competition involves firms offering differentiated products, not identical ones.