#1
Which of the following best defines the law of demand?
As price decreases, demand increases
ExplanationInverse relationship between price and demand
#2
What is the primary function of the Federal Reserve System in the United States?
Monetary policy
ExplanationCentral bank controlling money supply and interest rates
#3
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and sellers, identical products
ExplanationLarge number of buyers and sellers with homogenous products
#4
What is the concept of 'invisible hand' in economics often associated with?
Adam Smith
ExplanationMarket self-regulation
#5
What is the role of the World Trade Organization (WTO) in international trade?
To establish and enforce rules for international trade
ExplanationGlobal trade regulation
#6
What does GDP stand for?
Gross Domestic Product
ExplanationTotal value of goods and services produced in a country
#7
Which of the following is a characteristic of monopolistic competition?
Many sellers selling differentiated products
ExplanationMany sellers with slightly different products
#8
What does the term 'opportunity cost' refer to in economics?
The cost of an alternative that must be forgone in order to pursue a certain action
ExplanationCost of the next best alternative
#9
What is the formula to calculate price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
ExplanationResponsiveness of demand to price changes
#10
What does the term 'supply curve' represent in economics?
The relationship between price and quantity supplied
ExplanationQuantity supplied at different prices
#11
What is the Tragedy of the Commons?
A situation where individuals overuse or deplete a shared resource
ExplanationOverexploitation of shared resources
#12
Which of the following is NOT a component of aggregate demand?
Exports
ExplanationTotal spending on goods and services except exports
#13
What is the concept of 'comparative advantage' in international trade?
The ability of one country to produce a good at a lower opportunity cost than another country
ExplanationProducing goods with lower opportunity costs
#14
What is the role of the International Monetary Fund (IMF) in the global economy?
To provide loans and financial assistance to member countries
ExplanationStabilizing global financial system
#15
What is the concept of 'scarcity' in economics?
The limited availability of resources to meet unlimited wants
ExplanationInsufficient resources to satisfy all wants