Principles of Economic Management Quiz

Opportunity cost signifies the value of the best alternative forgone when a choice is made.

GDP represents the total value of goods and services produced within a country's borders over a certain time period.

Money is not a factor of production; instead, it serves as a medium of exchange and store of value in the economy.

Fiscal policy involves government spending, taxation, and borrowing to influence the economy.

The law of demand states that, all else being equal, as the price of a good rises, the quantity demanded for that good falls.

Total revenue is the total amount of money a company receives from selling its goods or services.

Monopolistic competition features a downward-sloping, not perfectly elastic, demand curve.

Perfectly competitive markets feature firms that accept the market price as given and do not have market power.

The law states that as a consumer consumes more units of a good, the additional satisfaction derived from each additional unit decreases.

Elasticity of demand measures the responsiveness of quantity demanded to changes in price.

Central banks perform functions such as issuing currency, regulating money supply, and overseeing monetary policy.

Marginal cost represents the additional cost incurred by producing one more unit of a good or service.

Inflation signifies a sustained increase in the general price level of goods and services in an economy.