#1
In the circular flow diagram, households are primarily responsible for:
Producing goods and services
Consuming goods and services
Investing in capital goods
Regulating the economy
#2
Which of the following is a factor of production?
Money
Labor
Consumer goods
Finished products
#3
Which of the following best describes the term 'opportunity cost'?
The cost of an alternative that must be forgone in order to pursue a certain action
The total cost of producing a good or service
The cost incurred from producing one additional unit of a good or service
The cost of goods and services that are consumed by households
#4
In the circular flow model, which sector is responsible for providing goods and services to businesses?
Government
Households
Foreign sector
Financial institutions
#5
Which of the following is NOT a function of money in an economy?
Medium of exchange
Unit of account
Store of value
Producer of goods
#6
The term 'inflation' refers to:
A general increase in prices and fall in the purchasing value of money
A general decrease in prices and rise in the purchasing value of money
Stable prices over time
Unemployment rate
#7
Gross Domestic Product (GDP) is the total value of:
Goods and services produced within a country in a year
Goods and services consumed within a country in a year
Goods and services exported by a country in a year
Goods and services imported by a country in a year
#8
Which economic model assumes that individuals act rationally to maximize their own self-interest?
Keynesian Economics
Monetarist Economics
Classical Economics
Neoclassical Economics
#9
Which of the following is NOT a component of Aggregate Demand (AD) in macroeconomics?
Consumption
Investment
Government Spending
Imports
#10
In the circular flow model, firms provide households with income in the form of:
Taxes
Profits
Wages
Subsidies
#11
Which of the following is an example of a fiscal policy tool used to stimulate economic growth?
Increasing taxes
Reducing government spending
Decreasing interest rates
Increasing government spending
#12
The Phillips curve illustrates the relationship between:
Inflation and unemployment
Interest rates and investment
Government spending and GDP
Consumption and savings
#13
The circular flow diagram represents the flow of goods, services, and money between:
Governments and businesses
Households and governments
Households and businesses
Businesses and financial institutions
#14
Which of the following is a characteristic of a mixed economy?
Centralized planning
Private ownership of resources
Limited government intervention
Income equality
#15
The production possibilities frontier (PPF) shows the maximum combinations of two goods that can be produced given:
Unlimited resources
Limited technology
Full employment of resources
Underutilization of resources
#16
Which economic concept suggests that as production of a good increases, the opportunity cost of producing an additional unit also increases?
Law of Diminishing Marginal Utility
Law of Increasing Opportunity Cost
Law of Demand
Law of Supply
#17
Which of the following is NOT a characteristic of perfect competition?
Many buyers and sellers
Differentiated products
Perfect information
No barriers to entry or exit
#18
The Lorenz curve is used to illustrate:
Income distribution
Consumer surplus
Price elasticity
Production possibilities