Economic Concepts and Principles Assessment

The video tutorial covers essential economic concepts likely to appear in exams, including taxes, inflation, deflation, tariffs, supply and demand, and the roles of the SEC, FDIC, and Federal Reserve. It also explains the differences between GDP and GNP, providing a comprehensive overview of these fundamental economic terms and their implications.

What is one likely effect of tax cuts on consumer behavior?

• Decrease in consumer spending

• Increase in consumer spending

• Decrease in consumer savings

• No change in consumer spending

How does inflation affect the purchasing power of money?

• Increases purchasing power

• Has no effect on purchasing power

• Doubles purchasing power

• Decreases purchasing power

What is the opposite of inflation?

• Hyperinflation

• Stagflation

• Deflation

• Recession

What is a common view of economists on tariffs?

• They are beneficial for all countries

• They are negative for the importing country

• They only benefit consumers

• They have no impact on the economy

What happens to prices when supply is high and demand is low?

• Prices increase

• Prices decrease

• Prices fluctuate randomly

• Prices remain unchanged

What is the primary mission of the SEC?

• To increase taxes

• To regulate the market

• To provide loans to banks

• To control inflation

What does the FDIC insure?

• Foreign currency exchanges

• Deposits in US banks

• Real estate properties

• Stock market investments

What does GDP measure?

• Total value of goods and services produced within a country

• Total value of goods and services produced by a country's citizens worldwide

• Total imports of a country

• Total exports of a country

Which is typically greater for the US, GDP or GNP?

• GNP

• GDP

• It varies each year

• They are equal

Why is the GNP of the US often greater than its GDP?

• Due to high import tariffs

• Because of low domestic consumption

• Because of significant production outside the country

• Due to high domestic production