Economy Finance Quiz

What is the law of supply and demand?

• According to the law of supply and demand, prices are influenced by the weather conditions and natural disasters.

• The price of a good or service is determined by the supply of the product and the demand for the product.

• The law of supply and demand states that prices are determined by the cost of production and the profit margin.

• Supply and demand law is based on the idea that prices are set by the government regulations.

What are the benefits of international trade?

• Increased economic growth, access to a wider variety of goods and services, lower prices for consumers, and the opportunity for countries to specialize in the production of goods and services they are most efficient at.

• Limited economic growth, reduced access to goods and services, and higher prices for consumers

• Increased unemployment, higher prices for consumers, and limited access to goods and services

• Decreased economic growth, reduced variety of goods and services, and higher prices for consumers

Define inflation and its impact on the economy.

• Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling.

• Inflation only affects the prices of luxury items and has no impact on essential goods and services.

• Inflation has no impact on the economy and is just a natural fluctuation in prices.

• Inflation is the rate at which the general level of prices for goods and services is decreasing, and subsequently, the purchasing power of currency is rising.

Explain the concept of consumer price index (CPI).

• CPI measures the average change over time in the prices paid by rural consumers for a market basket of consumer goods and services.

• CPI measures the average change over time in the prices paid by businesses for a market basket of consumer goods and services.

• CPI measures the average change over time in the prices paid by urban consumers for a market basket of producer goods and services.

• CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

What are the different types of financial markets?

• Food markets, clothing markets, and electronics markets

• Local markets, national markets, and international markets

• Stock markets, bond markets, commodity markets, and currency markets

• Online markets, offline markets, and wholesale markets

How does supply and demand affect the price of goods and services?

• By influencing the weather patterns

• By influencing the balance between the quantity supplied and the quantity demanded.

• By causing inflation and deflation

• By determining the color of the goods and services

Discuss the role of tariffs in international trade.

• Tariffs are incentives for exporting goods.

• Tariffs are restrictions on the quantity of imported goods.

• Tariffs are subsidies given to imported goods.

• Tariffs are taxes imposed on imported goods.

What are the causes of inflation and how can it be controlled?

• Inflation is caused by a decrease in demand and can be controlled by increasing taxes

• Multiple factors such as excessive money supply, demand-pull inflation, cost-push inflation, and built-in inflation can cause inflation. It can be controlled through measures such as monetary policy, fiscal policy, supply-side policies, and wage and price controls.

• Inflation is caused by a decrease in production and can be controlled by reducing interest rates

• Inflation is caused by a shortage of money supply and can be controlled by printing more money

How is the consumer price index calculated and used?

• It is calculated by analyzing the stock market performance and is used to measure economic growth.

• It is calculated by comparing the price of luxury items to a base period and is used to measure poverty levels.

• It is calculated by comparing the price of a basket of goods and services to a base period and is used to measure inflation and changes in the cost of living.

• It is calculated by counting the number of consumers in a specific area and is used to measure unemployment rates.

Explain the functions of stock exchanges in financial markets.

• Stock exchanges do not ensure fair and transparent trading

• Stock exchanges do not contribute to price discovery in financial markets

• Stock exchanges are only for buying and selling stocks

• Stock exchanges facilitate trading of securities, ensure fair and transparent trading, and contribute to price discovery and liquidity in the financial markets.