Economic Activity Quiz

What does economic activity encompass?

• The production of goods and services only

• The process of creating, distributing, and using goods and services

• Only the production of goods

• The creation of taxes

Why is economic activity important?

• It determines government policies only

• It affects individuals, businesses, and governments

• It only impacts businesses

• It helps reduce inflation

What is an example of economic activity from daily life?

• Using a smartphone

• Reading a book

• Watching TV

• Writing a letter

How does a recession affect businesses?

• Increases consumer demand

• Leads to higher profits

• Results in job losses, reduced spending, and lower revenues

• Boosts innovation

What is Gross Domestic Product (GDP)?

• The total market value of goods and services produced within a country

• The amount of money in circulation within a country

• The unemployment rate in a country

• The inflation rate of a country

What is included in the GDP calculation?

• Only government spending

• Only consumer spending

• Consumer spending, business investment, government spending, and net exports

• Only business investment

What does a high unemployment rate indicate?

• High consumer spending

• Economic prosperity

• Economic slowdown and lower demand

• Increasing government investment

Which type of unemployment is caused by a downturn in the economy?

• Frictional unemployment

• Structural unemployment

• Cyclical unemployment

• Seasonal unemployment

What happens during inflation?

• Prices decrease

• The purchasing power of money increases

• Prices increase, reducing purchasing power

• Wages increase without affecting prices

What is productivity?

• The measure of economic output per capita

• The measure of how efficiently goods and services are produced

• The rate at which unemployment changes

• The level of taxation in an economy