#1
What does the Consumer Price Index (CPI) measure?
Inflation rate
Unemployment rate
Economic growth
Interest rates
#2
What is the primary goal of price stability in an economy?
To encourage investment
To minimize inflation and deflation
To maximize government revenue
To promote international trade
#3
Inflation is generally considered harmful to an economy because it:
Encourages saving
Reduces the real value of money
Stabilizes prices
Increases consumer purchasing power
#4
What does the term 'deflation' refer to in economics?
A general increase in the level of prices
A sustained decrease in the general price level
An increase in the money supply
A decrease in the interest rate
#5
What is the main purpose of the unemployment rate as an economic indicator?
To measure the rate of job creation
To measure the percentage of the labor force that is unemployed and actively seeking employment
To predict future economic growth
To determine the level of government spending
#6
What is the primary function of the Federal Reserve System in the United States?
Regulating international trade
Controlling fiscal policy
Managing the national debt
Conducting monetary policy
#7
Which of the following is considered a lagging economic indicator?
Gross Domestic Product (GDP)
Consumer Price Index (CPI)
Unemployment rate
Corporate profits
#8
What is the Phillips Curve used to illustrate?
The relationship between inflation and unemployment
The relationship between interest rates and GDP
The impact of government spending on economic growth
The relationship between imports and exports
#9
Which of the following is NOT a leading economic indicator?
Retail sales
Stock market performance
Consumer confidence index
Industrial production index
#10
What does the Producer Price Index (PPI) measure?
Consumer spending patterns
Changes in wholesale prices
Gross Domestic Product (GDP)
Labor force participation rate
#11
Which of the following is a measure of income inequality within a population?
Consumer Price Index (CPI)
Gini coefficient
Consumer Confidence Index (CCI)
Producer Price Index (PPI)
#12
Which of the following is NOT a component of the Consumer Price Index (CPI)?
Housing
Food and beverages
Transportation
Corporate profits
#13
Which of the following is NOT a tool of monetary policy used by central banks to maintain price stability?
Open market operations
Fiscal stimulus
Reserve requirements
Interest rates
#14
Which of the following is NOT a component of the M1 money supply?
Currency
Checkable deposits
Savings accounts
Traveler's checks
#15
What is the relationship between the unemployment rate and price stability?
Higher unemployment leads to higher inflation
Lower unemployment leads to lower inflation
Higher unemployment leads to lower inflation
There is no relationship between unemployment and inflation
#16
What effect does high inflation have on interest rates?
Interest rates decrease
Interest rates increase
Interest rates remain unchanged
Interest rates become negative
#17
Which of the following is NOT a tool of fiscal policy used to influence the economy?
Taxation
Government spending
Open market operations
Transfer payments
#18
Which of the following is a potential consequence of high levels of debt in an economy?
Increased investment
Stable interest rates
Increased risk of default
Decreased government spending