#1
Which of the following is a characteristic of a market economy?
Private ownership of property
ExplanationDefines economic system where individuals or entities own property and make economic decisions.
#2
What does GDP stand for in economics?
Gross Domestic Product
ExplanationTotal value of goods and services produced within a country's borders in a given period.
#3
Which of the following is not a factor of production?
Money
ExplanationRefers to resources like land, labor, and capital used in production.
#4
What is fiscal policy?
Government policy related to taxation and spending
ExplanationInvolves government decisions on revenue generation and expenditure to influence the economy.
#5
What is the function of a commercial bank?
Providing financial services to individuals and businesses
ExplanationOffers services like loans, deposits, and investments to the public and businesses.
#6
What is the main function of central banks in monetary systems?
To control inflation
ExplanationPrimary role is regulating money supply and interest rates to maintain stable prices.
#7
Which of the following is a characteristic of a command economy?
Government control of production
ExplanationCentralized authority determines production and distribution of goods and services.
#8
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
ExplanationMeasure of responsiveness of quantity demanded to changes in price.
#9
In economics, what does the term 'opportunity cost' refer to?
The highest-valued alternative that must be sacrificed to choose another course of action
ExplanationCost of foregoing the next best alternative when making a decision.
#10
Which of the following is a characteristic of perfect competition?
Many buyers and sellers
ExplanationMarket structure with numerous buyers and sellers, no single entity can influence price.
#11
What is the role of the International Monetary Fund (IMF) in the global economy?
Providing financial assistance to developing countries
ExplanationSupports countries facing economic difficulties through loans and policy advice.
#12
What is the significance of the gold standard in monetary history?
It established a fixed exchange rate system
ExplanationLinked currency values to gold, ensuring stability in international trade.
#13
What is the Phillips Curve used to illustrate?
The relationship between inflation and unemployment
ExplanationShows inverse relationship between unemployment rate and inflation rate.
#14
What is the 'Tragedy of the Commons' in economics?
A situation where individuals exploit shared resources for personal gain, leading to depletion
ExplanationDescribes overuse and degradation of common resources due to lack of property rights.
#15
In economics, what is 'monopolistic competition'?
A market structure with many sellers, each offering slightly different products
ExplanationCharacterized by many firms selling differentiated products with some degree of market power.