#1
What does GDP stand for in economics?
Gross Domestic Product
ExplanationA measure of the total economic output of a country.
#2
Which of the following is NOT a factor of production?
Demand
ExplanationDemand is not a factor of production; land, labor, capital, and entrepreneurship are.
#3
What does the term 'opportunity cost' refer to in economics?
The cost of giving up the next best alternative
ExplanationThe value of the best alternative foregone when a decision is made.
#4
What is the law of demand?
As the price of a good increases, the quantity demanded decreases
ExplanationAn inverse relationship between price and quantity demanded.
#5
What is the law of supply?
As the price of a good increases, the quantity supplied increases
ExplanationA direct relationship between price and quantity supplied.
#6
What does the term 'elasticity' measure in economics?
The responsiveness of quantity demanded to a change in price
ExplanationHow quantity demanded responds to changes in price.
#7
Which market structure is characterized by a large number of sellers with similar products?
Perfect competition
ExplanationA market with many buyers and sellers, no barriers to entry, and homogeneous products.
#8
What is the role of a central bank in an economy?
All of the above
ExplanationCentral banks perform various functions, including monetary policy, issuing currency, and regulating banks.
#9
What is the concept of 'comparative advantage' in international trade?
When one country can produce a good more efficiently than another country
ExplanationWhen a country can produce a good at a lower opportunity cost than another.
#10
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
ExplanationA measure of the responsiveness of quantity demanded to changes in price.
#11
What is fiscal policy?
Government policy concerning taxation and spending
ExplanationThe use of government spending and taxation to influence the economy.
#12
What is the difference between microeconomics and macroeconomics?
Microeconomics focuses on individual markets, while macroeconomics focuses on the economy as a whole
ExplanationMicroeconomics studies individual markets, while macroeconomics studies the economy as a whole.
#13
What is the difference between a recession and a depression?
A depression is characterized by a larger decline in economic activity than a recession
ExplanationA recession is a downturn in economic activity, while a depression is a severe and prolonged downturn.
#14
What is the formula for calculating the unemployment rate?
Number of unemployed people / Labor force
ExplanationThe proportion of the labor force that is unemployed.
#15
What is the difference between nominal GDP and real GDP?
Real GDP is adjusted for inflation, while nominal GDP is not
ExplanationReal GDP accounts for changes in price levels, while nominal GDP does not.
#16
What is the Phillips curve?
A curve showing the relationship between inflation and unemployment
ExplanationThe inverse relationship between inflation and unemployment.