Economics and Politics Quiz

What is the primary characteristic of a market economy?

• Government control over resources
• Free competition and market forces
• Centralized planning by the government
• Limited consumer choice

Which of the following is a feature of a centrally planned economy?

• Private ownership of property
• Government determines prices and production
• High levels of competition
• Profit belongs to business owners

In a mixed economy, how is profit typically treated?

• It is not allowed
• It is encouraged and taxed
• It is entirely owned by the government
• It is discouraged

Which political system is characterized by free and fair elections?

• Autocracy
• Democracy
• Oligarchy
• Theocracy

What is a common characteristic of underdeveloped countries?

• High literacy rates
• Advanced technology
• Severe poverty
• Strong infrastructure

What is the main economic activity in underdeveloped countries?

• Manufacturing
• Service industries
• Agriculture or resource-based
• Technology

Which stage of the business cycle is characterized by the economy slowing down?

• Expansion
• Peak
• Recession
• Trough

What is the opportunity cost?

• The cost of producing a good
• The value of what is foregone to get something else
• The profit made from a business
• The total cost of resources used

Which economic indicator adjusts before the economy experiences a change?

• Lagging
• Leading
• Coincident
• Static

What role does the government play in international business?

• Setting tariffs
• Determining company profits
• Controlling all business operations
• Eliminating competition