#1
Which of the following is not a component of aggregate demand?
Consumption
Investment
Exports
Imports
#2
What does GDP stand for?
Gross Domestic Profit
Gross Domestic Product
General Development Program
Government Direct Payment
#3
What does the term 'inflation' refer to in economics?
A decrease in the general level of prices
An increase in the general level of prices
Stagnation in economic growth
A decrease in the money supply
#4
What is the name of the central bank of the United States?
Federal Reserve
Bank of America
Treasury Department
Securities and Exchange Commission
#5
What does the term 'trade deficit' refer to?
When a country exports more than it imports
When a country imports more than it exports
When a country's imports and exports are equal
When a country has a surplus in its trade balance
#6
Which of the following is a characteristic of a recession?
Rising unemployment
Decreasing inflation
Increased consumer spending
Expansion of business investments
#7
Which of the following is a tool used by central banks to control the money supply?
Fiscal policy
Monetary policy
Trade policy
Industrial policy
#8
What is the unemployment rate when the number of people seeking employment equals the number of people who are employed?
0%
100%
50%
Depends on the labor force participation rate
#9
Which of the following is a contractionary fiscal policy tool?
Decreasing taxes
Increasing government spending
Increasing transfer payments
Increasing subsidies
#10
Which of the following is not a measure of economic growth?
Gross Domestic Product (GDP)
Gross National Product (GNP)
Net Investment
Consumer Price Index (CPI)
#11
Which of the following is a lagging economic indicator?
Unemployment rate
Consumer spending
Stock prices
New housing starts
#12
Which of the following is a goal of expansionary fiscal policy?
To decrease aggregate demand
To decrease government spending
To decrease taxes
To increase aggregate demand
#13
Which of the following is a leading economic indicator?
Unemployment rate
Consumer price index (CPI)
New orders for durable goods
Industrial production index
#14
What is the formula for calculating Gross Domestic Product (GDP)?
GDP = C + I + G + (X - M)
GDP = C + I + G
GDP = C + I + (X - M)
GDP = C + G + (X - M)
#15
What does the term 'opportunity cost' mean?
The cost of goods and services in the market
The cost of production inputs
The value of the next best alternative that is forgone
The cost of government borrowing
#16
Which of the following is not a tool of monetary policy?
Open market operations
Reserve requirement
Government spending
Discount rate
#17
What is the name of the theory that suggests changes in the money supply directly influence interest rates and, thus, the economy?
Keynesian economics
Classical economics
Monetarism
Austrian economics
#18
What does the term 'fiscal deficit' refer to?
When government expenditures exceed its revenues in a given year
When government revenues exceed its expenditures in a given year
When government borrows money from foreign countries
When government increases taxes
#19
Which of the following is a characteristic of a command economy?
Private ownership of the means of production
Centralized planning by the government
Market forces determine allocation of resources
Government intervention is minimal
#20
What is the purpose of the Consumer Price Index (CPI)?
To measure changes in the cost of living over time
To measure changes in stock prices
To measure changes in international trade balances
To measure changes in government spending
#21
What does the term 'stagflation' refer to?
High inflation accompanied by high unemployment
High inflation accompanied by rapid economic growth
Low inflation accompanied by low unemployment
Low inflation accompanied by economic recession
#22
What is the Phillips curve in macroeconomics?
A curve showing the relationship between the unemployment rate and the inflation rate
A curve showing the relationship between the GDP and the inflation rate
A curve showing the relationship between the interest rate and the inflation rate
A curve showing the relationship between the exchange rate and the inflation rate
#23
What does the term 'crowding out' mean in economics?
The displacement of private investment by government borrowing
The displacement of government spending by private investment
The displacement of exports by imports
The displacement of consumption by savings
#24
What is the main goal of supply-side economics?
To reduce inflation
To increase government spending
To stimulate economic growth by increasing the supply of goods and services
To decrease taxes
#25
What is the main purpose of antitrust laws?
To encourage monopolistic behavior
To regulate financial markets
To prevent monopolies and promote fair competition
To reduce government intervention in the economy