#1
What does GDP stand for in economics?
Gross Domestic Product
ExplanationTotal value of goods and services produced within a country's borders.
#2
What is the formula for calculating GDP (Gross Domestic Product)?
Consumption + Investment + Government Spending + Exports - Imports
ExplanationTotal monetary value of all goods and services produced within a country.
#3
Which of the following is a characteristic of a recession?
Increasing unemployment
ExplanationRising number of individuals without jobs.
#4
Which of the following is NOT a component of GDP?
Imports
ExplanationGoods and services produced abroad but consumed domestically.
#5
What is the Phillips Curve used to analyze?
The relationship between inflation and unemployment
ExplanationInverse relationship between unemployment and inflation.
#6
Which of the following is a tool used by central banks to control the money supply?
Open market operations
ExplanationBuying and selling government securities to adjust the money supply.
#7
What is the formula for calculating the unemployment rate?
Unemployment / Labor Force
ExplanationPercentage of unemployed individuals in the labor force.
#8
What does the term 'deflation' mean in economics?
A general decrease in prices of goods and services
ExplanationNegative inflation rate resulting in lower prices.
#9
What does the term 'stagflation' refer to?
A combination of high inflation and economic stagnation
ExplanationSimultaneous occurrence of inflation and economic slowdown.
#10
What does the term 'crowding out' refer to in economics?
A decrease in private sector investment due to increased government borrowing
ExplanationGovernment borrowing leading to reduced private investment.
#11
What is the term used to describe the situation when the economy's output is below its potential level?
Recessionary gap
ExplanationDifference between actual and potential output.
#12
Which of the following is an example of fiscal policy?
The government increasing public spending on infrastructure
ExplanationGovernment's use of taxation and spending to influence the economy.
#13
What is the main goal of contractionary monetary policy?
To decrease the money supply and reduce inflation
ExplanationIntended to curb inflation by reducing money supply.