#1
Which phase of the economic cycle is characterized by low unemployment rates, increased consumer spending, and rising GDP?
Expansion
ExplanationPeriod of economic growth with low unemployment, high consumer spending, and rising GDP.
#2
What is the primary tool used by central banks to control the money supply and influence economic activity?
Monetary policy
ExplanationCentral banks' strategies to control money supply and economic activities.
#3
What is the term used to describe a sustained increase in the general price level of goods and services in an economy?
Inflation
ExplanationRise in overall price levels of goods and services.
#4
Which of the following is NOT a phase of the business cycle?
Inflation
ExplanationInflation is an economic condition, not a phase of the business cycle.
#5
In economics, what does the term 'opportunity cost' refer to?
The value of the next best alternative that must be forgone
ExplanationCost of choosing one option over another, measured in forgone alternatives.
#6
Which economic indicator measures the total value of all goods and services produced within a country's borders in a specific period?
Gross Domestic Product (GDP)
ExplanationSum of all goods and services produced within a country.
#7
Which of the following is NOT a characteristic of a bear market?
Rising unemployment rates
ExplanationBear markets are marked by falling stock prices, not rising unemployment.
#8
What is the term used to describe the phenomenon when inflation rises rapidly alongside high unemployment and stagnant economic growth?
Stagflation
ExplanationCombination of inflation, high unemployment, and slow economic growth.
#9
Which of the following indicators is typically considered a leading indicator of economic activity?
Consumer confidence index
ExplanationPredictive measure indicating future economic trends.
#10
In the context of financial markets, what does the term 'volatility' refer to?
The degree of uncertainty or variation in price movements
ExplanationFluctuations or variations in asset prices over time.
#11
Which of the following is NOT a characteristic of a boom phase in the economic cycle?
Increasing consumer debt
ExplanationBooms typically see decreasing consumer debt due to higher income.
#12
What term describes the situation where the prices of assets are rapidly increasing, often fueled by speculation?
Bubble
ExplanationRapid asset price escalation driven by speculation.
#13
Which economic theory suggests that government intervention is necessary to stabilize economic fluctuations?
Keynesian economics
ExplanationBelief in government intervention to manage economic swings.
#14
What is the name of the theory that suggests stock prices reflect all available information and cannot be consistently outperformed?
Efficient Market Hypothesis
ExplanationStock prices reflect all available information instantly.