#1
Which of the following is considered a basic economic resource?
Labor
ExplanationLabor is a fundamental factor of production in economics.
#2
What does GDP stand for in economics?
Gross Domestic Product
ExplanationGDP represents the total monetary value of all goods and services produced within a country's borders in a specific time period.
#3
What is the primary goal of microeconomics?
To analyze the behavior of individual consumers and firms
ExplanationMicroeconomics focuses on understanding the decision-making processes of individuals and businesses within the economy.
#4
Which of the following is a characteristic of a command economy?
Centralized government control
ExplanationIn a command economy, the government dictates economic decisions, including what goods and services are produced and how they are allocated.
#5
What is the term used to describe a sustained increase in the general price level of goods and services in an economy?
Inflation
ExplanationInflation reduces the purchasing power of money over time, leading to higher prices for goods and services.
#6
Which of the following is NOT a characteristic of a traditional economy?
Centralized government planning
ExplanationTraditional economies rely on customs, traditions, and cultural norms to dictate economic decisions, rather than centralized planning by the government.
#7
Which of the following is NOT a characteristic of a developed economy?
High poverty rate
ExplanationDeveloped economies typically exhibit lower poverty rates due to higher standards of living and more robust social welfare systems.
#8
What is the term used to describe a situation where a country's economy is growing but the gap between the rich and poor is widening?
Economic inequality
ExplanationEconomic inequality refers to the unequal distribution of wealth and income among individuals or groups within an economy.
#9
What is the term used to describe the total value of goods and services produced within a country's borders in a specific time period?
GDP (Gross Domestic Product)
ExplanationGDP measures the economic output of a nation, encompassing all final goods and services produced within its borders.
#10
Which of the following is an example of a regressive tax?
Sales tax
ExplanationA regressive tax takes a larger percentage of income from low-income earners than from high-income earners, such as sales tax.
#11
What is the term used to describe a situation where a country's imports exceed its exports?
Trade deficit
ExplanationA trade deficit occurs when a nation's imports of goods and services exceed its exports, leading to a negative balance of trade.
#12
Which of the following is a component of the fiscal policy?
Government spending
ExplanationFiscal policy involves government decisions regarding taxation and spending aimed at influencing the economy.
#13
Which of the following is NOT a factor that contributes to economic development?
Inflation
ExplanationInflation is typically considered detrimental to economic development as it erodes the purchasing power of currency.
#14
What does the Human Development Index (HDI) measure?
Overall well-being of a country's citizens
ExplanationHDI assesses factors such as life expectancy, education, and income to gauge the overall quality of life within a country.
#15
What is the term used to describe the situation where the economy experiences a prolonged period of declining economic activity, characterized by falling output and employment levels?
Recession
ExplanationA recession is a significant decline in economic activity across the economy, lasting for a prolonged period.
#16
What is the primary goal of monetary policy?
To control inflation
ExplanationMonetary policy aims to regulate the money supply and interest rates to achieve stable prices and control inflation within an economy.
#17
What is the term used to describe a situation where the value of a currency falls relative to other currencies?
Devaluation
ExplanationDevaluation occurs when a country intentionally reduces the value of its currency relative to other currencies in the foreign exchange market.