Economics Basics

What happens to price and quantity when demand increases and supply remains constant?

• Price decreases, Quantity decreases

• Price increases, Quantity increases

• Price decreases, Quantity remains constant

• Price remains constant, Quantity decreases

In a perfectly competitive market, how many firms are there?

• Constant

• Variable

• Infinite

• Limited

What is GDP used to measure?

• Unemployment rate

• Total economic output of a country

• Total population of a country

• Stock market performance

What is the main purpose of tariffs in international trade?

• To stabilize currency exchange rates

• To increase imports and exports

• To protect domestic industries, reduce imports, and generate revenue for the government.

• To promote international cooperation

How does expansionary fiscal policy affect the economy?

• Expansionary fiscal policy leads to deflation

• Expansionary fiscal policy causes unemployment to decrease

• Expansionary fiscal policy has no impact on the economy

• Expansionary fiscal policy can boost economic activity and help during times of recession.

What is the main tool used by central banks to control the money supply?

• Quantitative easing

• Open market operations

• Discount rate

• Fiscal policy

What is the law of demand?

• The law of demand states that as the price of a good or service increases, the quantity demanded increases, and vice versa.

• The law of demand states that as the price of a good or service increases, the quantity demanded remains constant.

• The law of demand states that as the price of a good or service decreases, the quantity demanded decreases, and vice versa.

• The law of demand states that as the price of a good or service increases, the quantity demanded decreases, and vice versa.

What are the characteristics of a monopoly market structure?

• A few sellers, no substitutes, low barriers to entry, price maker, potential for normal profits

• A single seller, close substitutes, low barriers to entry, price taker, potential for abnormal losses

• A single seller, no close substitutes, high barriers to entry, price maker, potential for abnormal profits

• Multiple sellers, close substitutes, low barriers to entry, price taker, potential for abnormal profits

What are some examples of leading economic indicators?

• Average weekly jobless claims, building permits, stock market performance

• GDP growth rate, inflation rate, consumer confidence index

What are the benefits of free trade agreements?

• Higher prices for consumers

• Increased unemployment rates

• Multiple benefits such as economic growth, job creation, market access, lower prices, innovation, competition, and diplomatic relations.

• Limited access to new markets