#1
What is Gross Domestic Product (GDP)?
The total value of goods and services produced within a country in a specific time period
ExplanationAggregate measure of economic activity.
#2
What is inflation?
An increase in the overall level of prices of goods and services
ExplanationRise in the general price level.
#3
What is the role of the central bank in a country's economy?
To conduct monetary policy and regulate the money supply
ExplanationControl and oversight of the nation's currency.
#4
What is the Phillips Curve in macroeconomics?
A curve showing the relationship between inflation and unemployment
ExplanationTrade-off between inflation and unemployment.
#5
What is the loanable funds market in macroeconomics?
A market where households and firms borrow and lend money
ExplanationMarket for borrowing and lending.
#6
What is the significance of the Consumer Price Index (CPI) in measuring inflation?
It measures changes in the prices of goods and services purchased by consumers
ExplanationIndicator of consumer purchasing power.
#7
What is the role of the International Monetary Fund (IMF) in the global economy?
To provide loans and financial assistance to countries facing balance of payments problems
ExplanationGlobal financial assistance provider.
#8
What is the difference between fiscal policy and monetary policy?
Fiscal policy involves government spending and taxation, while monetary policy involves controlling the money supply and interest rates
ExplanationGovernment spending vs. money supply control.
#9
What is the concept of the multiplier effect in macroeconomics?
The impact of a change in government spending on overall economic output
ExplanationAmplification of government spending impact.
#10
What is the relationship between money supply and inflation according to the Quantity Theory of Money?
An increase in money supply leads to a proportional increase in prices
ExplanationDirect correlation between money supply and prices.
#11
Explain the concept of the Laffer curve in the context of fiscal policy.
It illustrates the relationship between government revenue and tax rates, suggesting that there is an optimal tax rate to maximize revenue
ExplanationOptimal tax rate for maximum revenue.
#12
What is the Triffin Dilemma?
A conflict between national and global economic interests related to the use of a single world currency
ExplanationConflict over global currency choice.