#1
Which of the following is a characteristic of a traditional economic system?
Individuals make economic decisions based on customs and traditions
ExplanationCustoms and traditions guide economic decisions.
#2
What is the role of entrepreneurship in an economic system?
To innovate, take risks, and create new businesses
ExplanationEntrepreneurship drives innovation, risk-taking, and business creation.
#3
What is fiscal policy in economics?
Government's use of taxes and spending to influence the economy
ExplanationGovernment adjusts taxes and spending to impact economic activity.
#4
In the context of international trade, what does comparative advantage refer to?
A country's ability to produce a good using fewer resources than another country
ExplanationComparative advantage reflects efficiency in resource utilization for production.
#5
What is the primary goal of supply-side economics?
Promoting economic growth through tax cuts and deregulation
ExplanationSupply-side economics aims to stimulate economic growth by reducing barriers to production.
#6
In a market economy, prices are primarily determined by:
Supply and demand
ExplanationPrices are influenced by supply and demand dynamics.
#7
What is the main focus of the command economic system?
Government control and central planning
ExplanationGovernment directs economic activities centrally.
#8
In a mixed economic system, the government typically regulates:
Certain aspects while allowing market forces in others
ExplanationGovernment regulates some sectors while market forces operate freely in others.
#9
Which economic indicator measures the overall health of an economy by considering the total value of goods and services produced within a country's borders?
Gross Domestic Product (GDP)
ExplanationGDP measures total production within national borders, reflecting economic health.
#10
Which of the following is a characteristic of a centrally planned (command) economy?
Government control and direction of economic activities
ExplanationEconomic activities are directed and controlled by the government.
#11
Which economic system emphasizes the role of the government in ensuring social welfare and reducing income inequality?
Mixed economy
ExplanationGovernment intervenes to promote social welfare and reduce inequality.
#12
What is the concept of opportunity cost in economics?
The value of the best alternative forgone when a decision is made
ExplanationOpportunity cost is the value of foregone alternatives.
#13
What is a positive externality in economics?
A benefit enjoyed by a third party as a result of an economic transaction
ExplanationThird parties benefit from economic activities without being directly involved.
#14
According to the law of demand, what happens to the quantity demanded when the price of a good or service increases?
Quantity demanded decreases
ExplanationDemand decreases as prices increase, according to the law of demand.
#15
Which economic concept refers to the total market value of all final goods and services produced within a country in a specific period?
Gross Domestic Product (GDP)
ExplanationGDP measures the total value of goods and services produced in a country.