Financial Literacy and Economics Quiz

Inflation refers to a rise in the overall price level of goods and services over a period of time.

GDP is the monetary value of all finished goods and services produced within a country's borders in a specific time period.

The law of demand states that there is an inverse relationship between the price of a good and the quantity demanded by consumers.

Opportunity cost refers to the value of the best alternative forgone when a decision is made.

Comparative advantage refers to a country's ability to produce a particular good or service at a lower opportunity cost than other countries.

Fiscal policy involves government decisions on spending and taxation to influence economic conditions.

The Federal Reserve oversees the nation's monetary policy, regulating money supply and interest rates to stabilize the economy.

Monopoly refers to a market structure where a single firm dominates the entire market and has the power to influence prices.

The unemployment rate measures the percentage of the labor force that is unemployed and actively seeking employment.

In a command economy, the government centrally plans and controls the economy, including resource allocation, production, and distribution.

GDP measures the economic output of a nation, including consumption, investment, government spending, and net exports.

Perfect competition is a market structure characterized by a large number of buyers and sellers, homogeneous products, and ease of market entry and exit.

The Phillips curve depicts the inverse relationship between inflation and unemployment, suggesting that as one decreases, the other tends to increase.

A tariff is a tax imposed on imported goods, making them more expensive for consumers and thus reducing demand.

The quantity theory of money asserts that changes in the money supply directly affect the price level in the economy.