Economic Development and Market Dynamics Quiz

Perfectly competitive markets involve multiple small firms with no individual control over prices.

GDP is the sum of all goods and services produced within a country's borders.

Fiscal policy aims to influence the economy by adjusting government spending and taxation to achieve economic goals, including employment maximization.

Open market operations involve buying or selling government securities to control the money supply and interest rates.

Oligopoly features a market dominated by a few large sellers offering similar products.

Monopolistic competition involves many sellers with differentiated products.

Predatory pricing is a strategy to eliminate competitors by initially setting low prices and then raising them.

The Phillips Curve shows the inverse relationship between unemployment and inflation.

The Laffer Curve illustrates the trade-off between tax rates and government revenue.

The Gini coefficient quantifies the degree of income inequality within a population.

HDI components include life expectancy, education, and per capita income, but not income inequality.

Comparative advantage refers to a country's ability to produce a good more efficiently than another country.

Aggregate Demand includes consumption, investment, government spending, and net exports but not labor supply.

The substitution effect occurs when consumers switch to a cheaper alternative as the price of a good rises.

Economies of scale refer to the cost advantages gained by increasing the scale of production.