#1
What is Gross Domestic Product (GDP)?
The total value of goods and services produced within a country in a specific time period
ExplanationMeasurement of a nation's economic output.
#2
What is the fiscal policy primarily concerned with in macroeconomics?
Management of government spending and taxation
ExplanationGovernment's use of spending and taxation to influence the economy.
#3
What is the concept of 'opportunity cost' in macroeconomics?
The cost of the next best alternative when a decision is made
ExplanationValue of forgone alternatives when a choice is made.
#4
In macroeconomics, what does the term 'deflation' refer to?
A sustained decrease in the general price level of goods and services
ExplanationContinuous decline in the overall price level.
#5
Which of the following is a tool used by the central bank to control the money supply?
Open market operations
ExplanationManipulating interest rates through buying and selling government securities.
#6
What is the Phillips Curve used to illustrate in macroeconomics?
The relationship between inflation and unemployment
ExplanationInverse relationship between inflation and unemployment rates.
#7
What is the Quantity Theory of Money in macroeconomics?
The theory that changes in the money supply affect the price level
ExplanationDirect relationship between money supply and price levels.
#8
In macroeconomics, what does the term 'stagflation' refer to?
A period of both high inflation and high unemployment
ExplanationSimultaneous occurrence of inflation and unemployment.
#9
Which of the following is a characteristic of the Classical Economic theory?
Emphasis on the role of self-regulating markets
ExplanationBelief in minimal government intervention in the economy.
#10
What is the Laffer Curve used to represent in macroeconomics?
The relationship between tax rates and government revenue
ExplanationOptimal tax rate for maximizing government revenue.
#11
According to the Keynesian theory, what is the role of government during an economic downturn?
Increase government spending to stimulate demand
ExplanationBoosting demand through government intervention.
#12
What is the concept of 'crowding out' in macroeconomics?
Increased government spending leads to decreased private investment
ExplanationGovernment spending displacing private investment.