#1
What does the Gross Domestic Product (GDP) measure?
The total value of goods and services produced in a country
ExplanationGDP measures the overall economic output of a country, including goods and services.
#2
What does the Consumer Price Index (CPI) measure?
The average prices of a basket of goods and services
ExplanationCPI measures the average prices of a specified basket of consumer goods and services.
#3
Which economic indicator is often referred to as the 'cost of living index'?
Consumer Price Index (CPI)
ExplanationCPI is often called the 'cost of living index' as it reflects changes in the prices of essential goods and services.
#4
Which economic indicator is often used as a measure of a country's standard of living?
Human Development Index (HDI)
ExplanationHDI provides a comprehensive measure of a country's standard of living, considering health, education, and income.
#5
Which of the following is considered a lagging economic indicator?
Corporate Profits
ExplanationLagging indicators, like Corporate Profits, reflect economic trends after they have occurred.
#6
How is the unemployment rate calculated?
Number of unemployed people divided by the labor force
ExplanationUnemployment rate is calculated by dividing the number of unemployed by the labor force.
#7
Which of the following is not a component of the business cycle?
Stagnation
ExplanationStagnation is not a distinct phase of the business cycle, which includes expansion, peak, recession, and trough.
#8
What does the term 'Fiscal Policy' refer to in economics?
Government's use of taxation and spending to influence the economy
ExplanationFiscal policy involves government actions related to taxation and spending to impact the overall economy.
#9
In economic terms, what is the 'Laffer Curve' used to illustrate?
The relationship between tax rates and government revenue
ExplanationThe Laffer Curve shows the potential effects of tax rates on government revenue, indicating an optimal rate.
#10
In the context of economic indicators, what does the term 'leading indicator' mean?
An indicator that predicts future economic activity
ExplanationLeading indicators provide insights into future economic trends and activities.
#11
What is the purpose of the Producer Price Index (PPI)?
Measuring inflation from the perspective of producers
ExplanationPPI measures changes in selling prices received by domestic producers, indicating inflation from their viewpoint.
#12
Which of the following is a measure of income inequality?
Gini Coefficient
ExplanationThe Gini Coefficient is a measure of income inequality, with higher values indicating greater inequality.
#13
What does the term 'Quantitative Easing' refer to?
Central bank's purchase of financial assets to increase money supply
ExplanationQuantitative Easing involves a central bank buying financial assets to boost the money supply and stimulate the economy.
#14
What is the Phillips Curve in economics?
A curve illustrating the relationship between inflation and unemployment
ExplanationThe Phillips Curve illustrates the trade-off between inflation and unemployment in an economy.