#1
1. What is the law of demand in economics?
As prices increase, quantity demanded decreases
ExplanationInverse relationship between price and quantity demanded.
#2
4. What does GDP stand for in the context of economics?
Gross Domestic Product
ExplanationTotal value of all goods and services produced in a country.
#3
10. What is the term for the total market value of all final goods and services produced in a country in a specific time period?
Gross Domestic Product
ExplanationAggregate value of a country's economic output.
#4
12. In the context of international trade, what is a trade surplus?
When a country exports more goods than it imports
ExplanationPositive balance of trade with higher exports than imports.
#5
20. What is the difference between nominal GDP and real GDP?
Nominal GDP is not adjusted for inflation, while real GDP is adjusted for inflation
ExplanationImpact of inflation adjustment on economic output.
#6
24. According to the law of supply, what happens to the quantity supplied as the price of a good or service increases?
Quantity supplied increases
ExplanationDirect relationship between price and quantity supplied.
#7
2. Which of the following is considered a macroeconomic indicator?
Consumer Price Index (CPI)
ExplanationMeasures inflation and price changes at a national level.
#8
3. What is the concept of opportunity cost?
The cost of choosing one option over the next best alternative
ExplanationThe value of forgone alternatives when a choice is made.
#9
7. What is the primary function of central banks in most economies?
Issuing currency
ExplanationAuthority to print and regulate the country's money supply.
#10
8. Which economic system relies on private ownership and market forces to determine production and distribution of goods and services?
Capitalism
ExplanationMarket-driven system with private ownership of resources.
#11
11. What is the concept of elasticity of demand?
The percentage change in quantity demanded relative to the percentage change in price
ExplanationResponsiveness of quantity demanded to price changes.
#12
15. According to the law of diminishing returns, what happens as additional units of a variable input are added to a fixed input in production?
Marginal product eventually decreases
ExplanationDecrease in additional output with each added unit of input.
#13
17. Which economic concept represents the point at which the quantity of goods and services demanded equals the quantity supplied in the market?
Market equilibrium
ExplanationBalanced market condition with supply equaling demand.
#14
5. According to the law of diminishing marginal utility, what happens as a person consumes more units of a good or service?
Marginal utility decreases
ExplanationDecrease in satisfaction with each additional unit consumed.
#15
6. In economics, what is the Phillips Curve used to illustrate?
The relationship between inflation and unemployment
ExplanationTrade-off between inflation and unemployment rates.
#16
9. What is the Laffer Curve used to explain in economics?
The relationship between tax rates and government revenue
ExplanationOptimal taxation level for maximizing government revenue.
#17
13. What is the key difference between fiscal policy and monetary policy?
Fiscal policy is related to government spending and taxation, while monetary policy is related to money supply and interest rates
ExplanationGovernment tools for managing the economy.
#18
14. What is the Tragedy of the Commons in economics?
A situation where public goods are overused and depleted
ExplanationOverexploitation of shared resources leading to depletion.
#19
16. What is the concept of fiscal deficit in government finance?
The excess of government expenditures over government revenue, excluding borrowing
ExplanationBudget shortfall excluding borrowing.
#20
19. What is the concept of comparative advantage in international trade?
When a country can produce a good at a lower opportunity cost than other countries
ExplanationEfficient production advantage in global trade.