#1
Which economic theory suggests that individuals act rationally to maximize their self-interest?
Classical Economics
ExplanationRational self-interest as a guiding principle.
#2
Which economic concept is described as the total value of goods and services produced in a country over a specific time period?
Gross Domestic Product (GDP)
ExplanationAggregate value of a nation's economic output.
#3
What is the primary focus of Keynesian Economics during times of economic downturn?
Stimulating demand through fiscal policy
ExplanationUsing government spending to boost demand in downturns.
#4
Which economic theory suggests that economic growth can be sustained through increasing the supply of money?
Monetarism
ExplanationControlling money supply to regulate economic growth.
#5
What economic concept is measured by the Consumer Price Index (CPI)?
Inflation
ExplanationChanges in the cost of a basket of goods over time.
#6
According to the Law of Demand, what happens to the quantity demanded when the price of a good or service decreases?
Increases
ExplanationInverse relationship between price and quantity demanded.
#7
Who is considered the father of modern economics?
Adam Smith
ExplanationAdam Smith's pivotal role in shaping modern economic thought.
#8
According to the Phillips Curve, what is the relationship between inflation and unemployment?
Inverse relationship
ExplanationInflation and unemployment move inversely in the short run.
#9
Which economic model suggests that the economy tends to fluctuate between periods of expansion and contraction in a predictable manner?
Business Cycle Model
ExplanationPredictable cycles of economic expansion and contraction.
#10
According to the Tragedy of the Commons, what happens when resources are collectively owned and utilized by individuals?
Over-exploitation and degradation
ExplanationShared resources tend to suffer from overuse and decline.
#11
According to the Quantity Theory of Money, what is the relationship between the money supply and inflation?
Direct relationship
ExplanationIncrease in money supply leads to proportional inflation.
#12
In the context of international trade, what is the main premise of the Heckscher-Ohlin model?
Factor endowments
ExplanationCountries specialize based on their resource abundance.
#13
In neoclassical economics, what is the primary driver of consumer behavior?
Marginal utility
ExplanationConsumer choices are based on maximizing utility at the margin.
#14
What does the Solow Growth Model focus on in the context of economic growth?
Technological progress
ExplanationThe role of technological advancements in economic growth.
#15
In international trade theory, what does the term 'comparative advantage' refer to?
The ability to produce a good using fewer resources
ExplanationProducing goods with lower opportunity costs.
#16
Which economic model emphasizes the importance of expectations and how they influence economic decisions and outcomes?
Rational Expectations Model
ExplanationExpectations play a crucial role in shaping economic behavior.
#17
What does the term 'Laffer curve' represent in economic theory?
The relationship between tax rates and government revenue
ExplanationOptimal taxation rates maximizing government revenue.
#18
Which economic model suggests that individuals may not always make rational decisions and can be influenced by psychological factors?
Behavioral Economics
ExplanationPsychological influences on economic decision-making.