Economic Principles Quiz

Perfect competition entails numerous buyers and sellers, ensuring no single entity can influence the market.

GDP represents the total value of goods and services produced within a country's borders.

Equilibrium is the state where demand equals supply, resulting in market stability.

The Gini coefficient quantifies income distribution within a population, indicating the level of inequality.

The law of supply asserts that as prices rise, producers are willing to supply more of a good or service.

A monopoly involves a sole seller dominating the market, leading to significant control over prices.

The law of demand states that as prices drop, consumers demand more of a good or service.

Opportunity cost refers to the value of the next best alternative sacrificed when choosing one option over another.

Inflation signifies a persistent rise in the overall price level, reducing the purchasing power of money.

Price elasticity of demand measures the responsiveness of quantity demanded to price changes.

Supply denotes the quantity of goods or services a seller is willing to provide at various prices.

The Federal Reserve executes monetary policies, regulating money supply and interest rates to stabilize the economy.

Comparative advantage refers to a country's efficiency in producing a good or service at a lower opportunity cost than other nations.

Comparative advantage theory advises entities to focus on producing goods or services where they can produce with lower opportunity costs than others.

The World Bank offers financial assistance, particularly to developing nations, to support infrastructure development and economic growth.