#1
Which economic model assumes that individuals act rationally to maximize their own utility?
Neoclassical economics
ExplanationNeoclassical economics assumes rational behavior for maximizing individual utility.
#2
Which of the following is not a measure of productivity?
Gross domestic product (GDP)
ExplanationGross domestic product (GDP) is not a measure of productivity.
#3
What does the term 'efficiency' refer to in economics?
The maximum output that can be produced from given inputs.
ExplanationEfficiency in economics refers to maximizing output from given inputs.
#4
What is the primary goal of macroeconomic policy?
All of the above.
ExplanationThe primary goal of macroeconomic policy encompasses various objectives.
#5
What does the term 'opportunity cost' represent in economics?
The value of the next best alternative foregone when a decision is made.
ExplanationOpportunity cost is the value of the next best alternative foregone in decision-making.
#6
According to the law of demand, what is the relationship between price and quantity demanded?
Inverse
ExplanationThe law of demand states an inverse relationship between price and quantity demanded.
#7
What is the formula for calculating labor productivity?
Output / Labor Hours
ExplanationLabor productivity is calculated as output divided by labor hours.
#8
In Solow Growth Model, what does 'steady state' refer to?
A situation where capital per worker remains constant over time
ExplanationSteady state in Solow Growth Model means constant capital per worker.
#9
Which of the following is a characteristic of the Harrod-Domar growth model?
It focuses on the relationship between savings, investment, and growth.
ExplanationHarrod-Domar model focuses on savings, investment, and growth relationship.
#10
What is the main assumption of the Heckscher-Ohlin model?
Countries differ only in terms of the relative abundance of factors of production.
ExplanationHeckscher-Ohlin model assumes countries differ in factor abundance only.
#11
In the context of economic growth, what does 'convergence' refer to?
The tendency for economies with lower initial income levels to grow faster than economies with higher initial income levels.
ExplanationConvergence refers to lower-income economies growing faster than higher-income ones.
#12
Which of the following is a characteristic of a perfectly competitive market?
Firms are price takers.
ExplanationPerfectly competitive markets have firms that are price takers.
#13
Which of the following is not a factor that can affect total factor productivity (TFP)?
Changes in the price level
ExplanationChanges in the price level do not affect total factor productivity (TFP).
#14
What does the Cobb-Douglas production function express?
The relationship between both labor and capital with output
ExplanationCobb-Douglas function expresses the relationship of labor, capital, and output.
#15
Which economic theory suggests that technological progress is the primary driver of economic growth in the long run?
Endogenous growth theory
ExplanationEndogenous growth theory sees technological progress as the primary driver of long-term economic growth.
#16
What is the name of the economic model that emphasizes the role of expectations and the self-fulfilling nature of economic forecasts?
Rational expectations theory
ExplanationRational expectations theory emphasizes expectations and self-fulfilling nature of forecasts.