Economic Policies and Theories Quiz

Advocates for minimal government intervention in the economy to achieve equilibrium through market forces.

The main goal is to stabilize the economy by adjusting government spending and taxation.

Involves controlling interest rates and money supply to influence economic activity.

Aims to boost economic activity through government spending and tax adjustments.

GDP measures the value of goods and services produced domestically, excluding imports.

Shows an inverse relationship, as one decreases, the other tends to increase.

Considered the founder, wrote 'The Wealth of Nations,' emphasizing free markets.

Focuses on how individuals form expectations and make decisions based on them.

Imbalance of information between parties in an economic transaction.

Ricardo's theory argues for specialization based on comparative advantage for mutual benefit.

Illustrates the point at which tax rates maximize revenue before declining.

Unlike perfect competition, participants do not have complete information.

Direct relationship - an increase in money supply leads to higher prices.

Government dictates production and distribution, centralizing economic decisions.

An unaccounted cost imposed on society due to economic activities.