#1
Which economic principle suggests that individuals make decisions based on maximizing their own self-interest?
Capitalism
ExplanationCapitalism is based on the idea that individuals act in their own self-interest, leading to overall economic prosperity.
#2
Who is known as the father of modern economics?
Adam Smith
ExplanationAdam Smith is considered the father of modern economics for his work in 'The Wealth of Nations' and advocacy of free markets.
#3
Who authored the book 'The Wealth of Nations'?
Adam Smith
Explanation'The Wealth of Nations' was authored by Adam Smith, laying the foundation for classical economics and advocating for free markets.
#4
What economic principle suggests that as the price of a good decreases, the quantity demanded increases?
Law of demand
ExplanationThe law of demand states that there is an inverse relationship between the price of a good and the quantity demanded, assuming all other factors remain constant.
#5
According to classical economics, what is the role of government in the economy?
Minimal intervention
ExplanationClassical economics suggests that government should have minimal intervention in the economy, allowing markets to self-regulate.
#6
Which economic philosophy advocates for the redistribution of wealth to achieve social equality?
Socialism
ExplanationSocialism advocates for the redistribution of wealth to achieve social equality and reduce economic disparities.
#7
What is the central idea behind Keynesian economics?
Aggregate demand determines economic activity
ExplanationKeynesian economics emphasizes the role of aggregate demand in determining economic activity and advocates for government intervention during economic downturns.
#8
Who coined the term 'invisible hand' to describe the self-regulating nature of markets?
Adam Smith
ExplanationAdam Smith coined the term 'invisible hand' to describe how individuals pursuing their own self-interest can lead to overall economic benefit.
#9
According to the theory of rational choice, what do individuals aim to maximize?
Utility
ExplanationThe theory of rational choice suggests that individuals aim to maximize their utility, or satisfaction, from consuming goods and services.
#10
Who proposed the theory of comparative advantage in international trade?
David Ricardo
ExplanationDavid Ricardo proposed the theory of comparative advantage, suggesting that countries should specialize in producing goods they are most efficient at.
#11
What economic principle suggests that the best outcome is achieved when each individual in society pursues their own self-interest?
Laissez-faire
ExplanationLaissez-faire economics suggests that minimal government intervention allows individuals to pursue their own self-interest, leading to the best overall outcome.
#12
Which economist is associated with the concept of 'creative destruction'?
Joseph Schumpeter
ExplanationJoseph Schumpeter is associated with the concept of 'creative destruction,' which describes how innovation and entrepreneurship lead to the destruction of old industries and the creation of new ones.
#13
What is the primary goal of neoliberalism?
Maximizing economic growth
ExplanationNeoliberalism aims to maximize economic growth by advocating for free markets, deregulation, and reducing government intervention in the economy.
#14
Which economic concept suggests that increasing the money supply leads to inflation?
Quantity theory of money
ExplanationThe quantity theory of money suggests that increasing the money supply without a corresponding increase in goods and services leads to inflation.