Economics Quiz

When price increases the demand for a quantity will?

• Increase

• Decreases

• First Increase then decrease

• None

Explain the concept of elasticity of supply and give an example.

• Elasticity of supply is the measure of how much the quantity demanded of a good responds to a change in the price of that good.

• Elasticity of supply is the measure of how much the quantity supplied of a good responds to a change in the price of that good.

• Elasticity of supply is the percentage change in quantity demanded divided by the percentage change in price.

• Elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price. For example, if the price of strawberries increases by 10% and the quantity supplied increases by 20%, the elasticity of supply would be 20%/10% = 2.

What are the characteristics of a perfectly competitive market?

• A large number of buyers and sellers, similar products, imperfect information, restricted entry and exit, and market power for individual buyers or sellers

• A small number of buyers and sellers, different products, imperfect information, restricted entry and exit, and market power for individual buyers or sellers

• A small number of buyers and sellers, identical products, perfect information, free entry and exit, and no market power for any individual buyer or seller

• A large number of buyers and sellers, identical products, perfect information, free entry and exit, and no market power for any individual buyer or seller

Describe the differences between monopoly and oligopoly market structures.

• Monopoly market structure is characterized by a few large firms dominating the market, while oligopoly market structure is characterized by a single seller dominating the market.

• Monopoly market structure is characterized by a lack of barriers to entry, while oligopoly market structure is characterized by high barriers to entry.

• Monopoly market structure is characterized by a single seller dominating the market, while oligopoly market structure is characterized by a few large firms dominating the market.

• Monopoly market structure is characterized by perfect competition, while oligopoly market structure is characterized by a lack of competition.

What are the components of gross domestic product (GDP) and how is it calculated?

• The components of GDP are imports, exports, and inflation. It is calculated by subtracting imports from exports.

• The components of GDP are population, unemployment, and inflation. It is calculated by dividing these components.

• The components of GDP are consumption, investment, government spending, and net exports. It is calculated by adding up these components.

• The components of GDP are wages, profits, and taxes. It is calculated by multiplying these components.

Explain the significance of GDP as an economic indicator.

• GDP is a measure of the total population of a country

• GDP provides an indication of the size and growth of the economy, which can help in making economic policy decisions and comparing the economic performance of different countries.

• GDP is used to determine the weather forecast

• GDP measures the happiness of the citizens

How does the central bank use open market operations to influence the money supply?

• By buying or selling government securities

• By directly controlling the stock market

• By printing more currency notes

• By increasing interest rates on loans

Who draft the monetary policy of the country?

• Commercial Banks

• Government

• Central Bank of a Country

• Central Bank & Government Both

What is fiscal policy and how does it differ from monetary policy?

• Fiscal policy is the regulation of international trade, while monetary policy is the regulation of domestic trade.

• Fiscal policy is the control of the money supply and interest rates by a central bank.

• Fiscal policy is the use of government spending and taxation, while monetary policy involves the control of the money supply and interest rates by a central bank.

• Monetary policy involves the use of government spending and taxation.

Discuss the impact of expansionary fiscal policy on the economy.

• Expansionary fiscal policy can lead to increased aggregate demand, higher economic growth, and reduced unemployment.

• Expansionary fiscal policy has no impact on the economy

• Expansionary fiscal policy leads to decreased aggregate demand

• Expansionary fiscal policy results in higher unemployment