#1
Which of the following is not a goal of monetary policy?
Maximizing corporate profits
ExplanationMonetary policy aims to control inflation, stabilize currency, and foster economic growth, not maximize corporate profits.
#2
What is the primary function of fiscal policy?
Manage government spending and taxation
ExplanationFiscal policy involves government's use of spending and taxation to influence the economy and achieve specific goals.
#3
What is the purpose of antitrust laws?
To promote competition and prevent monopolies
ExplanationAntitrust laws are designed to maintain fair competition, preventing the formation of monopolies and ensuring market competition.
#4
Which of the following is a characteristic of a command economy?
Centralized government planning
ExplanationA command economy is characterized by central government control and planning of economic activities.
#5
Which economic indicator measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services?
Consumer Price Index (CPI)
ExplanationThe Consumer Price Index (CPI) tracks changes in the prices paid by consumers for a basket of goods and services, indicating inflation or deflation.
#6
Which regulatory body is responsible for overseeing the US stock market?
SEC
ExplanationThe Securities and Exchange Commission (SEC) is responsible for regulating and overseeing the US stock market.
#7
What is the 'Laffer Curve' used to illustrate?
The relationship between tax rates and government revenue
ExplanationThe Laffer Curve depicts the idea that there is an optimal tax rate that maximizes government revenue, beyond which revenue decreases.
#8
What is a tariff?
A tax on imports or exports
ExplanationA tariff is a tax imposed on goods and services traded internationally, affecting imports and exports.
#9
Which of the following is not a component of Gross Domestic Product (GDP)?
Corporate profits
ExplanationWhile GDP includes factors like consumption, investment, and government spending, corporate profits are not directly considered in GDP calculations.
#10
Which of the following is a tool used by central banks to control the money supply?
Open market operations
ExplanationCentral banks utilize open market operations to influence the money supply by buying or selling government securities in the open market.
#11
Which economic theory is associated with the idea of 'trickle-down economics'?
Supply-side economics
ExplanationTrickle-down economics is linked to supply-side economics, which advocates reducing taxes on the wealthy to spur economic growth benefiting all.
#12
What does the term 'regulatory capture' refer to?
The phenomenon where regulatory agencies serve the interests of the industries they regulate
ExplanationRegulatory capture occurs when regulatory agencies intended to act in the public interest instead advance the interests of the industries they regulate.
#13
Which of the following is NOT considered a type of unemployment?
Demand-side unemployment
ExplanationDemand-side unemployment is not a recognized type of unemployment; common types include frictional, structural, and cyclical unemployment.
#14
Which of the following is an example of a regressive tax?
Value-added tax (VAT)
ExplanationA regressive tax, like the Value-added tax (VAT), takes a higher percentage of income from low-income earners than from high-income earners.
#15
What is the primary goal of environmental regulations?
To protect public health and natural resources
ExplanationEnvironmental regulations aim to safeguard public health and preserve natural resources by establishing standards and guidelines for businesses and individuals.