#1
Which of the following is an example of a price floor?
Minimum wage
ExplanationMinimum wage sets a legal minimum price for labor.
#2
What is the main purpose of imposing tariffs?
To protect domestic industries
ExplanationTariffs aim to shield domestic industries from foreign competition.
#3
Which of the following is NOT a fiscal policy tool that governments can use to influence the economy?
Open market operations
ExplanationOpen market operations are a tool of monetary policy, not fiscal policy.
#4
What is the term for a situation where the government spends more money than it collects in revenue in a given fiscal year?
Fiscal deficit
ExplanationFiscal deficit occurs when government spending exceeds revenue.
#5
Which of the following is a tool of monetary policy?
Setting reserve requirements
ExplanationReserve requirements are a tool used by central banks to control the money supply.
#6
Which of the following is a form of direct government intervention in the market?
Setting price ceilings
ExplanationPrice ceilings directly control the maximum price of goods or services.
#7
What is the primary goal of antitrust laws?
To promote competition and prevent monopolies
ExplanationAntitrust laws aim to foster fair competition and prevent monopolistic practices.
#8
Which of the following is an example of a negative externality?
Air pollution from a factory
ExplanationNegative externality occurs when an action imposes costs on unrelated third parties.
#9
What is the economic term for a situation where a single seller dominates the market and controls the supply of a product or service?
Monopoly
ExplanationMonopoly refers to a market structure with only one seller controlling the market.
#10
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and sellers
ExplanationPerfect competition involves numerous buyers and sellers with identical products.
#11
Which economic concept refers to the total value of all goods and services produced within a country's borders in a specific time period?
Gross Domestic Product (GDP)
ExplanationGDP measures the total economic output of a nation.
#12
Which of the following is an example of a regressive tax?
Sales tax
ExplanationSales tax takes a higher percentage of income from low-income earners than high-income earners.
#13
Which of the following is an example of a public good?
National defense
ExplanationPublic goods are non-excludable and non-rivalrous, such as national defense.
#14
What is the primary goal of expansionary monetary policy?
To stimulate economic growth
ExplanationExpansionary monetary policy aims to boost economic activity by increasing the money supply and lowering interest rates.
#15
Which of the following is a function of the Federal Reserve in the United States?
Controlling the money supply
ExplanationThe Federal Reserve is responsible for regulating the nation's money supply and ensuring economic stability.