#1
What does GDP stand for?
Gross Domestic Product
ExplanationTotal value of goods and services produced within a country's borders.
#2
What is the opportunity cost in economics?
The cost of forgoing the next best alternative when making a decision
ExplanationValue of the next best alternative sacrificed.
#3
What is the role of the Federal Reserve in the United States?
Conducting monetary policy and regulating the money supply
ExplanationCentral bank responsible for monetary stability.
#4
What is the primary function of the World Trade Organization (WTO)?
Facilitating trade negotiations and dispute resolution
ExplanationPromoting global trade and resolving trade disputes.
#5
What is the concept of a 'liquidity trap' in macroeconomics?
A condition where monetary policy becomes ineffective due to very low interest rates
ExplanationSituation where interest rates are so low that monetary policy loses effectiveness.
#6
Which of the following is NOT included in the Consumer Price Index (CPI)?
Stock Market Prices
ExplanationCPI measures changes in the prices paid by consumers for a basket of goods and services.
#7
What is the formula for calculating inflation rate?
(CPI in Current Year - CPI in Previous Year) / CPI in Previous Year
ExplanationPercentage change in the general price level.
#8
Which economic system relies on supply and demand with little or no government intervention?
Capitalism
ExplanationMarket-driven system with private ownership of resources.
#9
What is the formula for calculating the unemployment rate?
(Number of Unemployed / Labor Force) * 100
ExplanationPercentage of unemployed people in the labor force.
#10
Which economic indicator is often considered a leading indicator of economic health?
Stock Market Performance
ExplanationReflects investor sentiment and economic expectations.
#11
Which of the following is a measure of the average prices received by producers of goods and services at all stages of the production process?
Producer Price Index (PPI)
ExplanationIndicator of inflation experienced by producers.
#12
What is the significance of the Phillips Curve in economics?
It shows the relationship between inflation and unemployment.
ExplanationTrade-off between inflation and unemployment levels.
#13
What is the concept of the Laffer Curve in taxation?
It illustrates the relationship between tax rates and government revenue.
ExplanationOptimal tax rate for maximizing government revenue.
#14
In the context of international trade, what does the term 'tariff' refer to?
A tax on imports or exports
ExplanationImposed on imported or exported goods.
#15
In finance, what does the term 'diversification' refer to?
Spreading investments across different assets to reduce risk
ExplanationMinimizing risk by investing in various assets.