Formative Assessment for Opting Economics

Which of the following best defines economics?

• The study of how individuals spend their money

• The study of how governments allocate resources

• The study of how societies allocate scarce resources to satisfy unlimited wants

• The study of how businesses maximize profits

What does the law of demand state?

• As prices rise, quantity demanded rises

• As prices fall, quantity demanded rises

• As prices rise, quantity demanded falls

• As prices fall, quantity demanded remains constant

Which of the following is a determinant of supply?

• Consumer income

• Technology

• Consumer preferences

• Price of substitute goods

Which of the following is a characteristic of a perfectly competitive market?

• Many buyers and one seller

• Many buyers and many sellers

• Few buyers and few sellers

• Few buyers and one seller

What does GDP stand for?

• Gross Domestic Product

• Gross Development Process

• Global Demand and Production

• Growth Development Potential

Which of the following is an example of a fiscal policy tool?

• Changes in interest rates by the central bank

• Government spending on infrastructure projects

• Open market operations

• Regulation of commercial banks

In economics, what does "opportunity cost" refer to?

• The monetary cost of an opportunity

• The value of the best alternative forgone when a choice is made

• The cost of goods and services in the market

• The cost of production inputs

What is inflation?

• A decrease in the overall level of prices

• An increase in the overall level of prices

• A situation where prices remain constant over time

• A measure of unemployment rate

What is the primary goal of monetary policy?

• To control inflation

• To control government spending

• To regulate foreign trade

• To manage fiscal deficits

Why do you want to study economics? How does it impact your day to day life?