Economics Test

Question 1: The real exchange rate measures:

Question 2: Which of the following is most likely a normative economic statement?

Question 3: If the price elasticity of demand for a good is 0.5, then a 10 percent increase in price will decrease the quantity demanded by:

Question 4: Which of the following is an example of a contractionary fiscal policy?

Question 5: According to the quantity theory of money, if the money supply grows at 10%, real GDP grows at 3%, the velocity of money is unchanged, what is the inflation rate?

Question 6: Which of the following best describes the term 'structural unemployment'?

Question 7: According to the theory of comparative advantage, a country should:

Question 8: If the interest rate decreases, what is likely to happen to investment spending?

Question 9: Which of the following is a characteristic of monopolistic competition?

Question 10: An increase in the supply of a good will lead to a(n):

Question 11: What does the term 'GDP deflator' refer to?

Question 12: Which of the following best describes 'comparative advantage'?

Question 13: Which of the following is not a function of money?

Question 14: What does the Phillips Curve illustrate?

Question 15: What term is used to describe the situation when the interest rate banks charge each other for overnight loans of federal funds meets the target set by the central bank?

Question 16: Which of the following is an example of a contractionary fiscal policy?

Question 17: What happens in the foreign exchange market when a currency appreciates?

Question 18: In the context of macroeconomics, what does the term 'stagflation' refer to?

Question 19: What is the economic principle indicating that resources are limited and cannot meet all human wants?

Question 20: If the government increases interest rates, what is the likely impact on aggregate demand?

Question 21: What does the Lorenz Curve illustrate?

Question 22: Which of the following is not a function of money?

Question 23: According to the Quantity Theory of Money, what is the result of increasing the money supply?

Question 24: Which of the following best defines 'monetary policy'?

Question 25: In Keynesian economics, how can government influence demand and reduce unemployment?

Question 26: What does the Phillips Curve illustrate?

Question 27: What is meant by 'Purchasing Power Parity'?

Question 28: Which of the following best describes the distinction between normative and positive economics?

Question 29: Which of the following is NOT a key function of the financial system?

Question 30: If the price elasticity of demand for a product is less than 1, the demand for the product is described as:

Question 31: Monetary policy influences the economy primarily through changes in:

Question 32: According to the law of demand, ceteris paribus, if the price of a commodity falls, then:

Question 33: What does the Phillips curve show the relationship between?

Question 34: Which of the following is an example of a contractionary fiscal policy?

Question 35: The concept of 'diminishing marginal utility' implies that:

Question 36: What is the primary focus of microeconomics?

Question 37: What does the term 'marginal cost' refer to in the context of production?

Question 38: According to the law of demand, what is the relationship between price and quantity demanded?

Question 39: In the context of exchange rates, what does PPP stand for?

Question 40: What signifies a contraction in the business cycle?

Question 41: Which of the following is an example of a non-tariff barrier?

Question 42: What is the primary goal of monetary policy?

Question 43: Which of the following best describes 'fiscal policy'?

Question 44: What factor primarily causes currency appreciation?

Question 45: What does the Lorenz Curve illustrate?

Question 46: In economics, what is 'deadweight loss'?

Question 47: What is the primary objective of monetary policy?

Question 48: What happens to the value of a country's currency when it runs a trade surplus?

Question 49: According to the quantity theory of money, what is the effect of an increase in the money supply, holding everything else constant?

Question 50: In the context of exchange rates, what is 'purchasing power parity'?

Question 51: What indicates a contractionary monetary policy?

Question 52: What is the effect of a high inflation rate on the real value of money?

Question 53: Which of the following best defines 'stagflation'?

Question 54: What does the law of diminishing marginal returns state?

Question 55: What is the economic term for the situation where the government spending exceeds its revenue?

Question 56: In the context of supply and demand, what effect does a price ceiling have when set below the equilibrium price?

Question 57: Which of the following is an example of a regressive tax system?

Question 58: What concept describes the phenomenon that additional satisfaction decreases as more units of a product are consumed?

Question 59: If a country has a comparative advantage in the production of a good, this implies that:

Question 60: Which of the following is not a function of money?

Question 61: What is meant by 'crowding out' in the context of government spending?

Question 62: Which of the following best describes a 'mixed economy'?

Question 63: What does the Phillips curve illustrate?

Question 64: What is the economic principle that describes a situation where the quantity supplied exceeds the quantity demanded at a particular price?

Question 65: Which of the following best describes the term 'marginal cost'?

Question 66: In the context of macroeconomics, the Phillips Curve illustrates the relationship between:

Question 67: Which of the following is considered a contractionary fiscal policy?

Question 68: What does the term 'real GDP' refer to?

Question 69: The theory of comparative advantage suggests that:

Question 70: What is meant by 'price elasticity of demand'?

Question 71: Which of the following is an example of a progressive tax system?

Question 72: When referring to the 'money supply' in an economy, which of the following is typically included?

Question 73: Which of the following best describes the law of demand?

Question 74: What is the primary factor that causes a movement along the demand curve for a good?

Question 75: According to the concept of price elasticity of demand, a product is considered inelastic if:

Question 76: In the context of supply and demand, a market equilibrium occurs when:

Question 77: Which of the following is a characteristic of perfect competition?

Question 78: What does the marginal rate of substitution (MRS) represent in consumer choice theory?

Question 79: Which of the following best describes the concept of diminishing marginal utility?

Question 80: What does the term 'monetary policy' refer to?

Question 81: What is the primary objective of fiscal policy?

Question 82: Which of the following economic measures is most directly aimed at assessing the average productivity of a nation's economy?

Question 83: What does the concept of 'diminishing marginal utility' explain?

Question 84: In the context of international trade, what does the term 'comparative advantage' refer to?

Question 85: The Phillips curve represents the relationship between:

Question 86: Which of the following best describes the concept of 'economic rent'?

Question 87: If the supply of a good is perfectly inelastic, how would an increase in demand affect its price?

Question 88: Which theory explains why interest rates across different countries move in a similar pattern?

Question 89: In an economy, if the money supply increases, what is the most likely immediate effect on interest rates?

Question 90: What is the primary focus of microeconomics?

Question 91: Which of the following is most likely to lead to an increase in the demand curve for a normal good?

Question 92: What does the price elasticity of demand measure?

Question 93: In the context of supply and demand, market equilibrium is defined as:

Question 94: If the government imposes a price ceiling below the equilibrium price of a good, what is most likely to occur?

Question 95: Which of the following best describes the concept of diminishing marginal utility?

Question 96: Gross Domestic Product (GDP) can be calculated using which of the following methods?

Question 97: Which of the following best explains the natural rate of unemployment?

Question 98: What is meant by the term 'monetary policy'?

Question 99: What effect does a high inflation rate have on the purchasing power of money?

Question 100: Which of the following is most likely to be a characteristic of a perfectly competitive market?

Question 101: According to the quantity theory of money, if the money supply grows at 10%, real output grows at 3%, and the velocity of money is unchanged, the inflation rate will be:

Question 102: Which of the following is NOT a function of money?

Question 103: What does the Phillips Curve illustrate?

Question 104: What is the primary economic function of the financial system?

Question 105: Which of the following statements about fiscal policy is true?

Question 106: What is the primary difference between monopolistic competition and perfect competition?

Question 107: A decrease in the supply of loanable funds will lead to:

Question 108: Which of the following is most likely to lead to an increase in a nation's currency value in the foreign exchange markets?

Question 109: If the quantity demanded of a good exceeds the quantity supplied at the current price, what is the likely outcome in a competitive market?

Question 110: Which of the following economic indicators is a lagging indicator?

Question 111: In the context of international trade, what does the term 'terms of trade' refer to?

Question 112: According to the quantity theory of money, if the money supply grows faster than real output, what is the likely result?

Question 113: What does the Phillips Curve represent?

Question 114: Which of the following best describes 'comparative advantage' in international trade?

Question 115: What does the Lorenz Curve illustrate?

Question 116: In Keynesian economics, what is the primary reason for unemployment?

Question 117: What is the primary goal of monetary policy?

Question 118: Which of the following best describes the concept of comparative advantage?

Question 119: The concept of 'sticky wages' primarily refers to:

Question 120: Which of the following would be considered a contractionary fiscal policy?

Question 121: In the context of international trade, what does the term 'tariff' refer to?

Question 122: What does the Phillips Curve demonstrate?

Question 123: Which principle states that trade can create value and increase the welfare of all nations participating, even if some are more efficient at producing goods or services than others?

Question 124: How does the quantity theory of money explain inflation?

Question 125: What is the primary function of the World Bank?

Question 126: Which of the following terms refers to the situation when increasing all inputs by some percentage results in a greater percentage increase in output?

Question 127: According to the quantity theory of money, if the money supply grows at 10% per year, real GDP grows at 3% per year, and the velocity of money is unchanged, what will be the inflation rate?

Question 128: In the context of the foreign exchange market, what does the term 'appreciation' refer to?

Question 129: What does the Philips Curve illustrate?

Question 130: Which economic theory posits that countries should specialize in producing goods for which they have a lower opportunity cost of production?

Question 131: When referring to fiscal policy, expansionary measures typically include:

Question 132: What is usually considered the primary goal of monetary policy?

Question 133: Which of the following is a characteristic of monopolistic competition?

Question 134: An increase in consumer confidence will likely lead to:

Question 135: Which economic indicator is considered a leading indicator for consumer inflation?

Question 136: In macroeconomics, what does the term 'guns or butter' model illustrate?

Question 137: What economic theory posits that lower taxes increase government revenue by encouraging economic growth?

Question 138: In the context of international trade, what does the 'terms of trade' refer to?

Question 139: What principle states that trade between countries can improve overall economic welfare, even when one country has an absolute advantage in all goods?

Question 140: Which of the following best describes the fiscal policy?

Question 141: What does the Phillips Curve demonstrate the relationship between?

Question 142: Which is considered a contractionary monetary policy tool?

Question 143: Which of the following is an example of a regressive tax system?

Question 144: What is the primary goal of a firm in a perfectly competitive market?

Question 145: Which of the following best describes the concept of diminishing marginal utility?

Question 146: In the context of macroeconomics, what does the Phillips curve illustrate?

Question 147: Which of the following is true about the elasticity of demand?

Question 148: What does the term 'monetary policy' refer to?

Question 149: What is the main difference between nominal GDP and real GDP?

Question 150: According to the law of supply, what happens to the quantity supplied of a good when its price increases?

Question 151: What is meant by 'fiscal policy'?

Question 152: What is the fundamental problem of economics?