#1
Which of the following is a basic economic problem?
Scarcity
ExplanationResources are limited, but wants are unlimited.
#2
Who is known as the father of modern economics?
Adam Smith
ExplanationAuthor of 'The Wealth of Nations' and advocate of free market capitalism.
#3
Which of the following is NOT a characteristic of a monopoly?
Many sellers
ExplanationMonopoly implies a single seller in the market.
#4
What is the primary tool used by central banks to control the money supply?
Open market operations
ExplanationBuying and selling government securities to influence the money supply.
#5
What is the term for a situation where the price of a good increases as its demand increases?
Inelasticity
ExplanationPrice remains relatively constant despite changes in demand.
#6
Which of the following is NOT a factor of production?
Money
ExplanationMoney is a medium of exchange, not a factor of production.
#7
Which of the following is NOT a characteristic of perfect competition?
Barriers to entry
ExplanationPerfect competition implies easy entry and exit for firms.
#8
Which economic system relies on supply and demand to determine prices?
Capitalism
ExplanationPrivate ownership of the means of production and market-driven allocation of resources.
#9
The GDP (Gross Domestic Product) of a country includes:
Both goods and services produced within the country's borders
ExplanationTotal market value of all goods and services produced within a country's borders.
#10
Which of the following is NOT a measure of economic inequality?
Consumer Price Index (CPI)
ExplanationCPI measures inflation, not economic inequality.
#11
What is the term for a situation in which one person's gain is equivalent to another's loss?
Zero-sum game
ExplanationTotal gains and losses balance out to zero.
#12
What is the economic term for the total value of all final goods and services produced within a country in a given period of time?
Gross Domestic Product (GDP)
ExplanationMeasure of a country's economic output.
#13
In economics, what does the term 'ceteris paribus' mean?
All else being equal
ExplanationAssumption where all factors except those being studied are held constant.
#14
Which economic theory advocates for minimal government intervention in the economy?
Austrian economics
ExplanationEmphasizes individual liberty, free markets, and limited government intervention.
#15
What does the term 'comparative advantage' refer to in economics?
The ability of one country to produce a good at a lower opportunity cost than another country
ExplanationWhen a country can produce a good with lower opportunity cost than another country.
#16
Which international organization is responsible for fostering global monetary cooperation and financial stability?
International Monetary Fund (IMF)
ExplanationPromotes exchange rate stability and provides financial assistance.
#17
What is the name for the situation where a country's imports exceed its exports?
Trade deficit
ExplanationIndicates a negative balance of trade.
#18
Which international trade theory suggests that countries should specialize in producing goods for which they have a comparative advantage?
Comparative advantage
ExplanationCountries benefit from specializing in goods they can produce most efficiently.
#19
Which of the following is a primary function of the World Trade Organization (WTO)?
Promoting free trade and resolving trade disputes
ExplanationEnsures trade flows as smoothly, predictably, and freely as possible.