#1
Which of the following is NOT a characteristic of a market economy?
Centralized decision-making
ExplanationMarket economies rely on decentralized decision-making.
#2
What does GDP stand for in economics?
Gross Domestic Product
ExplanationGDP measures the total value of all goods and services produced in a country.
#3
Which of the following is NOT a factor of production?
Demand
ExplanationDemand is a determinant of consumption, not a factor of production.
#4
Which of the following is a characteristic of a command economy?
Centralized decision-making
ExplanationCommand economies have centralized control over economic decisions.
#5
What is the economic term for the total value of all goods and services produced in a country in a given period?
Gross Domestic Product (GDP)
ExplanationGDP represents the total value of a nation's production.
#6
Which of the following is a measure of the overall level of prices in an economy?
Consumer Price Index (CPI)
ExplanationCPI gauges the general price level of goods and services in an economy.
#7
What is the term for a situation in which the government spends more money than it receives in revenue?
Budget deficit
ExplanationBudget deficit occurs when government spending exceeds its revenue.
#8
What is inflation?
A situation where there is a sustained increase in the general price level of goods and services
ExplanationInflation is the rise in the overall price level over time.
#9
What is the 'Laffer Curve' used to illustrate?
The relationship between tax rates and tax revenue
ExplanationLaffer Curve depicts the optimal tax rate for maximizing government revenue.
#10
What is the name of the theory that suggests a country should specialize in the production of goods and services it can produce most efficiently while importing goods and services it cannot produce as efficiently?
Comparative Advantage
ExplanationComparative Advantage advocates for specializing in efficient production.
#11
What is the primary purpose of fiscal policy?
To manage government spending and taxation
ExplanationFiscal policy aims to regulate economic activity through government budgetary decisions.
#12
Which of the following is an example of a regressive tax?
Sales tax
ExplanationRegressive taxes take a higher proportion of income from low earners, like sales tax.
#13
What is the term used to describe a period of negative economic growth for two consecutive quarters?
Recession
ExplanationRecession is a sustained decline in economic activity lasting two quarters or more.
#14
What does the term 'opportunity cost' refer to?
The cost of an economic decision measured in terms of the next best alternative forgone
ExplanationOpportunity cost is the value of the best alternative foregone when a decision is made.
#15
What is the 'Phillips Curve' used to illustrate?
The relationship between unemployment and inflation
ExplanationPhillips Curve shows the trade-off between unemployment and inflation.
#16
What is the 'Tragedy of the Commons'?
A situation where individuals overuse and deplete a shared resource
ExplanationTragedy of the Commons involves overexploitation of communal resources.