Economic Concepts Quiz

What is the role of government in the economic cycle?

• To regulate and stabilize the economy

• To create art and literature

• To organize sports events

• To design fashion trends

How do economic factors influence available resources within a country?

• They reduce available resources.

• They have no influence on resources.

• They enhance economic resources and growth opportunities.

• They only affect natural resources.

What is the relationship between economic factors and a country's ability to develop independently?

• Economic factors are unrelated to independent development.

• Economic factors hinder independent development.

• Economic factors are important for understanding independent development.

• Economic factors only affect dependent development.

Which of the following is NOT a characteristic of a planned economy?

• State control over production

• High levels of inequality

• Low unemployment

• Common good as an incentive

Which stage of the economic cycle is characterized by economic activity picking up and GDP beginning to grow again?

• Contraction

• Trough

• Expansion

• Peak

What does the balance of payments equilibrium aim to address?

• Surpluses in domestic trade

• Deficits in external trade

• Increases in government spending

• Reductions in national debt

What is a common goal of both fiscal and monetary policies?

• Increase in taxes

• Stabilize the economy

• Decrease in government spending

• Increase in interest rates

Which policy involves changes in taxes and government spending?

• Monetary policy

• Fiscal policy

• Trade policy

• Regulatory policy

What is a common misconception about deflation?

• It always leads to economic growth

• It causes high inflation

• Lower prices are always good

• It reduces the burden of debt

What is the role of firms in the simplified model of the economy?

• They provide factor payments to households

• They collect taxes from households

• They import goods from other countries

• They regulate the economy