Economic Concepts and Relationships Quiz

Challenge yourself with this quiz on GDP, demand, inflation, fiscal policy, and more. Test your understanding of macroeconomic principles!

Practice Learn Test

What does GDP stand for?

Gross Domestic Product

General Development Process

Government Development Policy

Global Demand Projection

What is the law of demand?

As price increases, demand increases

As price decreases, quantity demanded increases

As price increases, quantity demanded decreases

There is no relationship between price and quantity demanded

What is inflation?

A decrease in the general price level of goods and services

An increase in the general price level of goods and services

Stagnation of the economy

A decrease in the overall production of goods and services

What is a monopoly?

A market structure with many firms selling differentiated products

A market structure with only one seller selling a unique product with no close substitutes

A market structure with a few firms selling identical products

A market structure with barriers to entry and exit

Which of the following is a characteristic of a mixed economy?

Private ownership of all resources

Government ownership of all resources

A combination of private and government ownership of resources

No ownership of resources

What is the law of supply?

As price decreases, supply increases

As price increases, supply increases

As price increases, supply decreases

There is no relationship between price and supply

Which of the following is not a characteristic of perfect competition?

Many buyers and sellers

Homogeneous products

Barriers to entry

Perfect information

What is the formula for calculating GDP?

Consumption + Investment + Government Spending + Exports - Imports

Consumption + Investment + Government Spending

Consumption + Investment + Exports - Imports

Consumption + Investment

Which of the following is a fiscal policy tool used to combat recession?

Decreasing government spending

Increasing taxes

Increasing government spending

Decreasing taxes

#10

What is the law of diminishing marginal utility?

As consumption of a good increases, the marginal utility increases

As consumption of a good increases, the marginal utility decreases

As consumption of a good decreases, the marginal utility increases

As consumption of a good decreases, the marginal utility decreases

#11

What does the term 'elasticity of demand' measure?

The responsiveness of quantity demanded to a change in price

The responsiveness of quantity supplied to a change in price

The total quantity demanded at any price level

The percentage change in demand compared to the percentage change in price

#12

What is fiscal policy?

Policy related to the regulation of money supply by a central bank

Policy related to government's taxation and spending decisions

Policy related to international trade agreements

Policy related to the regulation of interest rates

#13

What does the term 'opportunity cost' refer to in economics?

The cost of an item or activity in terms of the next best alternative foregone

The total cost incurred in producing a good or service

The cost of raw materials used in production

The cost of labor in production

#14

What is the Phillips curve used to illustrate?

The relationship between inflation and unemployment

The relationship between GDP and inflation

The relationship between GDP and unemployment

The relationship between interest rates and inflation

#15

What is the concept of 'deadweight loss' in economics?

The loss of potential welfare that occurs when equilibrium for a good or service is not achieved

The loss of potential revenue that occurs when taxes are imposed on a market

The loss of potential profit that occurs when a firm operates inefficiently

The loss of potential consumer surplus that occurs when price is higher than the equilibrium price

#16

What is the difference between absolute advantage and comparative advantage?

Absolute advantage refers to the ability of a country to produce a good using fewer resources, while comparative advantage refers to the ability of a country to produce a good at a lower opportunity cost

Absolute advantage refers to the ability of a country to produce a good at a lower opportunity cost, while comparative advantage refers to the ability of a country to produce a good using fewer resources

Absolute advantage refers to the ability of a country to produce a good more efficiently, while comparative advantage refers to the ability of a country to produce a good less efficiently

Absolute advantage refers to the ability of a country to produce a good more efficiently, while comparative advantage refers to the ability of a country to produce a good more efficiently

#17

What is the difference between a command economy and a market economy?

In a command economy, decisions are made by individuals and businesses, while in a market economy, decisions are made by the government

In a command economy, resources are allocated by market forces, while in a market economy, resources are allocated by government planners

In a command economy, the government owns and controls the means of production, while in a market economy, individuals and businesses own and control the means of production

In a command economy, there is no private ownership of property, while in a market economy, property is privately owned

#18

What is the difference between oligopoly and monopolistic competition?

In oligopoly, there are many firms selling differentiated products, while in monopolistic competition, there are only a few firms selling identical products

In oligopoly, there are only a few firms selling identical products, while in monopolistic competition, there are many firms selling differentiated products

In oligopoly, there are many firms selling identical products, while in monopolistic competition, there are only a few firms selling differentiated products

In oligopoly, there is only one firm selling a unique product with no close substitutes, while in monopolistic competition, there are many firms selling identical products