#1
Which economic system relies on private ownership of the means of production and operates mainly through market forces?
Capitalist economy
ExplanationPrivate ownership and market forces drive production.
#2
Who is considered the father of modern economics?
Adam Smith
ExplanationAdam Smith is credited as the pioneer of modern economics.
#3
Which of the following is a characteristic of a market economy?
Private ownership of resources
ExplanationResources are owned and controlled privately.
#4
Who developed the theory of comparative advantage?
David Ricardo
ExplanationDavid Ricardo introduced the theory of comparative advantage.
#5
What is the term used to describe the total value of all final goods and services produced within a country's borders in a specific time period?
Gross Domestic Product (GDP)
ExplanationAggregate value of goods and services produced domestically.
#6
Which of the following is NOT a component of GDP?
Imports
ExplanationImports are not included in GDP calculation.
#7
What is the main feature of a command economy?
Centralized government control
ExplanationThe government controls production and distribution.
#8
What is the term used to describe the total value of goods and services produced in a country in a given period, usually a year?
Gross Domestic Product (GDP)
ExplanationGDP measures the economic output of a nation.
#9
In economics, what does the term 'opportunity cost' refer to?
The cost of the next best alternative foregone
ExplanationThe value of the best alternative not chosen.
#10
Which of the following is NOT a characteristic of a traditional economy?
Centralized decision-making by government
ExplanationDecisions are based on customs and traditions, not centralized government.
#11
What does the term 'fiscal policy' refer to in economics?
Government's use of taxation and spending to influence the economy
ExplanationGovernment manipulation of tax and spending to regulate the economy.
#12
Which of the following is a characteristic of a mixed economy?
Combination of private and government ownership of resources
ExplanationOwnership and control are shared between private entities and the government.
#13
Which economic concept refers to the situation where the amount of goods or services demanded exceeds the amount supplied, leading to higher prices?
Shortage
ExplanationDemand surpasses supply, causing price increase.
#14
What is the term used to describe a sustained decrease in the general price level of goods and services in an economy?
Deflation
ExplanationPersistent decrease in overall prices.
#15
What does the term 'invisible hand' refer to in economics?
The self-regulating nature of the market
ExplanationMarket forces guiding resources allocation without explicit intervention.
#16
What does the term 'stagflation' describe in economics?
A period of high inflation and high unemployment
ExplanationSimultaneous occurrence of inflation and unemployment.
#17
What does the 'Laffer curve' illustrate in economics?
The effect of tax rates on government revenue
ExplanationThe relationship between tax rates and government revenue.