#1
Which of the following is NOT a characteristic of economic instability?
Stable unemployment rates
ExplanationEconomic instability often involves fluctuating unemployment rates.
#2
What does GDP stand for?
Gross Domestic Product
ExplanationGDP represents the total value of goods and services produced in a country.
#3
What is the primary indicator used to measure economic growth?
Gross Domestic Product (GDP)
ExplanationGDP serves as the primary measure of a country's economic growth.
#4
During economic instability, which of the following is likely to occur?
Rise in income inequality
ExplanationEconomic instability can contribute to an increase in income inequality.
#5
Which of the following is a consequence of economic instability?
Volatility in financial markets
ExplanationFinancial markets can experience volatility during periods of economic instability.
#6
What is the primary objective of monetary policy during times of economic instability?
Stimulating economic growth
ExplanationMonetary policy aims to boost economic growth during instability.
#7
Which of the following is an impact of economic instability on GDP?
Decreased consumer spending
ExplanationEconomic instability can lead to a decline in consumer spending, affecting GDP.
#8
What is the name for a period of declining GDP, typically lasting two consecutive quarters?
Economic recession
ExplanationAn economic recession is characterized by a sustained decline in GDP over two quarters.
#9
What does the term 'stagflation' refer to?
A period of low economic growth combined with high inflation
ExplanationStagflation involves a rare combination of low growth and high inflation.
#10
Which of the following is a tool used by central banks to stabilize the economy?
Monetary policy
ExplanationCentral banks use monetary policy to regulate economic stability.
#11
Which of the following factors contributes to economic instability?
Unpredictable fiscal policies
ExplanationUnpredictable fiscal policies can exacerbate economic instability.
#12
What is the term for a situation where the rate of inflation exceeds the rate of wage growth?
Stagflation
ExplanationStagflation occurs when inflation outpaces wage growth.
#13
Which economic theory suggests that government intervention is necessary to stabilize the economy during times of economic instability?
Keynesian economics
ExplanationKeynesian economics advocates government intervention for economic stabilization.
#14
What is the name for the situation when an economy experiences negative GDP growth for an extended period?
Economic depression
ExplanationAn economic depression involves prolonged negative GDP growth.
#15
Which of the following is an indicator of economic instability?
High debt-to-GDP ratio
ExplanationA high debt-to-GDP ratio is a sign of economic instability.
#16
Which of the following measures the percentage change in the prices of goods and services over time?
Consumer Price Index (CPI)
ExplanationCPI measures the inflation rate by tracking price changes in goods and services.
#17
Which of the following factors is a leading cause of economic instability during the business cycle?
Monetary policy
ExplanationMonetary policy is a key factor influencing economic instability during the business cycle.