#1
Which economic system relies on market forces to determine prices and allocate resources?
Capitalism
ExplanationMarket-driven system with private ownership and minimal government intervention.
#2
In a command economy, who typically makes decisions about resource allocation?
Government authorities
ExplanationCentralized authority controls production and resource distribution.
#3
In a laissez-faire economic system, what is the government's role?
Minimal intervention, allowing market forces to operate freely
ExplanationLimited government involvement in economic affairs.
#4
Which economic concept refers to the total market value of all goods and services produced within a country in a specific time period?
Gross Domestic Product (GDP)
ExplanationIndicator of a nation's economic performance.
#5
Which economic system is characterized by collective or government ownership of the means of production and distribution of goods and services?
Socialism
ExplanationEconomic system with communal ownership and centralized planning.
#6
What is a characteristic of a mixed economy?
Combination of private and public ownership
ExplanationBlend of market-driven elements and government intervention.
#7
In economic terms, what does GDP stand for?
Gross Domestic Product
ExplanationTotal value of goods and services produced within a country.
#8
What is the primary goal of monetary policy?
Control inflation and interest rates
ExplanationCentral bank's management of money supply to stabilize prices and employment.
#9
Which economic system emphasizes collective ownership and control of the means of production?
Communism
ExplanationState or community ownership of resources and production.
#10
What is the main purpose of the World Trade Organization (WTO)?
Promote international trade and resolve trade disputes
ExplanationFacilitates global trade agreements and settles trade conflicts.
#11
What role does fiscal policy play in the economy?
Managing government spending and taxation
ExplanationGovernment's use of spending and taxation to influence economic conditions.
#12
What is the Tragedy of the Commons in the context of economics?
Overuse and depletion of shared resources
ExplanationExploitation of communal resources due to individual self-interest.
#13
Which economic indicator is used to measure the average prices of a basket of goods and services in an economy?
Consumer Price Index (CPI)
ExplanationBenchmark for inflation by tracking changes in prices of goods and services.
#14
What is the difference between absolute advantage and comparative advantage in international trade?
Absolute advantage focuses on efficiency, while comparative advantage considers opportunity cost
ExplanationAbsolute advantage: ability to produce more efficiently. Comparative advantage: lower opportunity cost.
#15
In economic terms, what does the term 'elasticity' refer to?
The responsiveness of quantity demanded to a change in price
ExplanationDegree of sensitivity of demand or supply to price changes.