Economics and Financial Literacy Quiz

Test your understanding of economics with these 12 questions covering topics like GDP, market forces, inflation, and more!

Practice Learn Test

What does the term 'opportunity cost' mean in economics?

The total cost of an opportunity

The cost of forgoing the next best alternative when making a decision

The cost of obtaining an opportunity

The monetary value of an opportunity

Which economic system relies on market forces to determine prices and allocate resources?

Socialism

Communism

Capitalism

Mixed economy

Which of the following is considered a leading economic indicator?

Unemployment rate

Gross Domestic Product (GDP)

Consumer Price Index (CPI)

Stock market performance

What is the formula for calculating the Gross Domestic Product (GDP)?

GDP = Consumption + Investment + Government Spending + (Exports - Imports)

GDP = Consumption - Investment - Government Spending + (Exports + Imports)

GDP = Consumption * Investment * Government Spending * (Exports - Imports)

GDP = Consumption / Investment * Government Spending + (Exports - Imports)

In finance, what does the term 'bear market' refer to?

A market characterized by rising prices

A market characterized by falling prices

A market with stable prices

A market with no trading activity

What is the purpose of diversification in investment portfolios?

To concentrate all investments in one asset

To minimize risk by investing in different assets

To maximize short-term returns

To eliminate the need for investment analysis

In financial markets, what does the term 'bull market' refer to?

A market characterized by falling prices

A market characterized by rising prices

A market with no trading activity

A market with stable prices

What is the role of the Federal Reserve in the United States?

Fiscal policy implementation

Monetary policy regulation

Tax collection

Foreign trade negotiations

What is the Quantity Theory of Money primarily focused on explaining?

Interest rates

Inflation

Stock market fluctuations

Exchange rates

#10

What is the Phillips Curve used to illustrate in economics?

The relationship between inflation and unemployment

The impact of fiscal policy on government revenue

The behavior of interest rates in a market

The elasticity of supply and demand

#11

What is the Laffer Curve used to illustrate in economics?

The relationship between tax rates and government revenue

The impact of interest rates on inflation

The elasticity of demand for luxury goods

The correlation between unemployment and inflation

#12

What is the primary function of the International Monetary Fund (IMF)?

Regulating global trade agreements

Providing financial assistance and stability to member countries

Issuing a global currency

Managing national budgets