#1
Which of the following is a measure of inflation?
CPI
ExplanationConsumer Price Index measures changes in the cost of living over time.
#2
What does GDP stand for?
Gross Domestic Product
ExplanationTotal value of all goods and services produced within a country's borders.
#3
What does the term 'Fiscal Policy' refer to?
Government's management of tax rates and spending
ExplanationGovernment's use of taxation and spending to influence the economy.
#4
What is the formula for calculating the consumer price index (CPI)?
CPI = (Current Price Index / Base Price Index) × 100
ExplanationMeasure of average price changes in consumer goods and services.
#5
What is the equation of the quantity theory of money?
MV = PQ
ExplanationRelates the amount of money in circulation to the price level of goods and services.
#6
What is the formula for calculating GDP?
GDP = C + I + G + (X - M)
ExplanationGross Domestic Product equals consumption plus investment plus government spending plus exports minus imports.
#7
What does the 'Phillips Curve' depict?
Relationship between unemployment and inflation
ExplanationIt shows an inverse relationship between unemployment and inflation.
#8
What is the main goal of monetary policy?
To stabilize prices
ExplanationMaintaining stable prices and controlling inflation.
#9
Which of the following is a component of aggregate demand?
All of the above
ExplanationConsumption, investment, government spending, and net exports.
#10
Which of the following is a measure of economic growth?
Gross Domestic Product (GDP)
ExplanationIndicator of a nation's economic activity and health.
#11
What does the term 'Multiplier Effect' describe in economics?
The magnified impact of initial spending on overall economic activity
ExplanationInitial spending leads to further economic activity and income.
#12
What is the term used to describe the situation when the economy experiences negative GDP growth for two consecutive quarters?
Recession
ExplanationPeriod of declining economic activity.
#13
Which of the following represents the 'Laffer Curve'?
Relationship between tax rates and government revenue
ExplanationIt illustrates the tradeoff between tax rates and tax revenue.
#14
What is the primary tool used by central banks to control the money supply?
Open market operations
ExplanationBuying and selling government securities to influence the money supply.
#15
What does the term 'stagflation' refer to?
High inflation and high unemployment
ExplanationSimultaneous occurrence of inflation and unemployment.
#16
What is the formula for the unemployment rate?
(Number of unemployed / Labor force) × 100
ExplanationPercentage of unemployed people in the labor force.
#17
Which of the following is NOT a tool of monetary policy?
Government spending
ExplanationIt falls under fiscal policy, not monetary.
#18
What is the 'Natural Rate of Unemployment'?
The lowest rate of unemployment achievable without causing inflation
ExplanationLevel of unemployment when the economy is at full capacity.
#19
What is the primary goal of a central bank?
Ensure financial stability
ExplanationMaintaining stable prices and a healthy financial system.