#1
Which of the following is a tool used by central banks to control the money supply in an economy?
Monetary policy
ExplanationMonetary policy regulates money supply.
#2
Which international organization is responsible for promoting monetary cooperation and exchange rate stability?
International Monetary Fund (IMF)
ExplanationIMF fosters monetary collaboration globally.
#3
What is the primary objective of trade policy?
Promoting economic growth
ExplanationTrade policy aims to bolster economic growth.
#4
Which of the following is a characteristic of a command economy?
Centralized government planning
ExplanationCommand economy: centralized government planning.
#5
Which economic concept is associated with the idea that individuals may not always make rational decisions due to cognitive biases?
Behavioral economics
ExplanationBehavioral economics studies irrational decisions due to biases.
#6
What is the primary goal of fiscal policy?
Maximize employment
ExplanationFiscal policy aims to optimize employment levels.
#7
Which economic theory advocates for minimal government intervention in the market?
Classical economics
ExplanationClassical economics favors limited government involvement.
#8
What is the Phillips Curve used to illustrate in economic policy?
The relationship between inflation and unemployment
ExplanationPhillips Curve depicts inflation-unemployment ties.
#9
What is the primary function of a central bank in a country's economic system?
Conducting monetary policy
ExplanationCentral banks execute monetary policies.
#10
In economic terms, what does the Laffer Curve illustrate?
The relationship between tax rates and tax revenue
ExplanationLaffer Curve depicts tax rate-tax revenue correlation.
#11
What is the function of antitrust laws in economic regulation?
To prevent monopolies and promote competition
ExplanationAntitrust laws safeguard against monopolistic practices.
#12
In the context of economic policy, what does 'deregulation' refer to?
Removing or reducing government regulations in the market
ExplanationDeregulation entails cutting market regulations.
#13
Which of the following is a key element of supply-side economics?
Reducing taxes to stimulate economic growth
ExplanationSupply-side economics focuses on tax reduction.
#14
What is the Tragedy of the Commons in the context of resource management?
The depletion of shared resources due to individual self-interest
ExplanationTragedy of the Commons: resource depletion from self-interest.
#15
What is the purpose of exchange rate policies in international economics?
To manage the value of a country's currency relative to others
ExplanationExchange rate policies regulate currency values.