#1
Which of the following is NOT a factor that contributes to economic growth?
Decrease in productivity
ExplanationProductivity is a key driver of economic growth; decrease in productivity hampers growth.
#2
What does GDP stand for?
Gross Domestic Product
ExplanationGDP measures the total value of goods and services produced within a country's borders.
#3
What is the name for the period of economic decline during which trade and industrial activity are reduced?
Recession
ExplanationRecessions are characterized by decreased economic activity, including lower trade and industrial output.
#4
What is the primary objective of fiscal policy?
To manage government spending and taxation
ExplanationFiscal policy aims to stabilize the economy through government spending and taxation decisions.
#5
What is the term used to describe the total value of goods and services produced within a country in a given period of time?
Gross Domestic Product (GDP)
ExplanationGDP is a measure of a nation's economic output and is used to gauge its economic health.
#6
Which economic indicator measures the average changes in prices received by producers of goods and services over time?
Producer Price Index (PPI)
ExplanationPPI tracks price changes at the producer level and is a leading indicator of inflation.
#7
What is the formula for calculating economic growth rate?
(Final GDP - Initial GDP) / Initial GDP
ExplanationEconomic growth rate is calculated by comparing the difference between final and initial GDP over the initial GDP.
#8
What is the relationship between economic growth and standard of living?
Economic growth leads to an increase in standard of living
ExplanationAs economies grow, individuals typically experience higher incomes and improved living standards.
#9
Which of the following is a measure of income inequality?
Gini coefficient
ExplanationThe Gini coefficient measures the distribution of income or wealth within a population.
#10
Which of the following factors is most likely to contribute to long-term economic growth?
Investment in education and infrastructure
ExplanationEducation and infrastructure investments enhance productivity and innovation, fostering long-term economic growth.
#11
Which of the following is an example of a leading economic indicator?
Consumer Confidence Index
ExplanationThe Consumer Confidence Index forecasts future economic activity based on consumer sentiment.
#12
Which of the following is NOT a characteristic of sustainable economic growth?
High unemployment rate
ExplanationSustainable economic growth aims to minimize unemployment by creating job opportunities.
#13
What does the term 'trickle-down economics' refer to?
An economic theory that emphasizes reducing taxes on the wealthy to stimulate investment and economic growth
ExplanationIt suggests that benefits for the wealthy will eventually 'trickle down' to the rest of society.
#14
What is the primary focus of supply-side economics?
Stimulating supply through tax cuts and deregulation
ExplanationSupply-side economics aims to boost economic growth by incentivizing production and investment.
#15
What does the term 'stagflation' refer to?
A period of high inflation and stagnant economic growth
ExplanationStagflation combines stagnant economic growth with high inflation rates, posing challenges for policymakers.
#16
Which economic theory advocates for minimal government intervention in the economy?
Classical economics
ExplanationClassical economics emphasizes laissez-faire policies and free market principles.
#17
What does the term 'Laffer curve' refer to in economics?
A curve representing the relationship between income tax rates and tax revenue.
ExplanationThe Laffer curve illustrates the point at which tax rates maximize revenue before they deter economic activity.