Financial Literacy and Economic Concepts Quiz

A general increase in prices that reduces the purchasing power of a currency.

The total value of all goods and services produced in a country in a given period of time.

A measure of the profitability of an investment, calculated as the gain or loss relative to the initial investment.

Central banks, such as the Federal Reserve, control monetary policy, including setting interest rates to influence the economy.

The central bank of the U.S., responsible for regulating the money supply and influencing interest rates to achieve economic goals.

A market structure with a large number of buyers and sellers, leading to price competition.

The formula for compound interest where A is the final amount, P is the principal, r is the interest rate, and n is the number of compounding periods.

A fundamental economic principle stating that as the price of a good or service decreases, the quantity demanded by consumers increases.

The comprehensive measure of a nation's economic activity, encompassing all goods and services produced.

The optimal distribution of resources to maximize overall societal welfare.

While a factor facilitating production, money is not a primary factor of production like land, labor, and capital.

The value of the best alternative forgone when a decision is made to allocate resources to a particular option.

A measure of how sensitive the quantity demanded of a good is to a change in its price.

A recession is a temporary economic decline, while a depression is a more severe and prolonged downturn.

Progressive taxes impose higher rates on higher incomes, whereas regressive taxes take a larger proportion of income from lower earners.