Economics Concepts Final Review Quiz

Which of the following best describes the law of demand?

• As the price of a good increases, the quantity demanded increases.

• As the price of a good decreases, the quantity demanded increases.

• As the price of a good increases, the quantity demanded remains constant.

• As the price of a good decreases, the quantity demanded decreases.

In a perfectly competitive market, which of the following is true?

• Firms are price makers.

• There are significant barriers to entry.

• Products are differentiated.

• Firms are price takers.

Which of the following is a tool of monetary policy?

• Government spending

• Taxation

• Open market operations

• Subsidies

If the government increases its spending, what is the likely short-term effect on aggregate demand?

• Aggregate demand will decrease.

• Aggregate demand will increase.

• Aggregate demand will remain unchanged.

• Aggregate demand will fluctuate randomly.

Which of the following is considered a lagging economic indicator?

• Stock market returns

• Unemployment rate

• New housing starts

• Consumer confidence index

What happens to the supply curve when there is a technological advancement in production?

• The supply curve shifts to the left.

• The supply curve shifts to the right.

• The supply curve becomes vertical.

• The supply curve remains unchanged.

Which market structure is characterized by a single seller?

• Perfect competition

• Monopolistic competition

• Oligopoly

• Monopoly

What is the primary goal of contractionary fiscal policy?

• To increase inflation

• To decrease inflation

• To increase government debt

• To increase unemployment

Which of the following is a characteristic of an oligopoly?

• Many small firms

• No barriers to entry

• Few large firms

• Homogeneous products

If the central bank wants to decrease the money supply, which action might it take?

• Lower the reserve requirement

• Buy government securities

• Raise the discount rate

• Decrease taxes