Economic Challenges and Government Responses Quiz

Democracy is a political system, not an economic system.

Fiscal policy aims to stabilize the economy through government spending and taxation.

GDP measures the total economic output of a country in a specific timeframe.

A recession is a sustained economic decline with two consecutive quarters of negative GDP growth.

In a market economy, property is privately owned and allocated based on market forces.

A budget deficit occurs when government spending surpasses its revenue.

Inflation refers to a continuous rise in the overall price level in an economy.

The Gini coefficient gauges the extent of income inequality within a population.

Opportunity cost is the value of the best alternative foregone when a choice is made.

Interest rates are a key tool used in monetary policy to regulate the money supply.

Stagflation is a condition of high inflation combined with high unemployment.