Test your understanding of economics by answering these questions. You will receive feedback after each response, along with your score at the end of the quiz.
Question 1: What is the basic economic problem?
Correct answer: Scarcity
Question 2: What does inflation mean?
Correct answer: Rising prices
Question 3: What is a mixed economy?
Correct answer: A combination of private and public sectors
Question 4: What is opportunity cost?
Correct answer: The value of the next best alternative
Question 5: What is fiscal policy?
Correct answer: Government spending and taxation
Question 6: What is a trade deficit?
Correct answer: Imports exceed exports
Question 7: What does the law of demand state?
Correct answer: Price increases lead to demand decreases
Question 8: What is a monopoly?
Correct answer: One firm dominates the market
Question 9: What is the Phillips Curve?
Correct answer: A graphical representation of inflation and unemployment
Question 10: What is the main function of the World Trade Organization (WTO)?
Correct answer: To oversee international trade agreements
Question 11: What does the term "elasticity" refer to in economics?
Correct answer: The responsiveness of demand or supply to changes in price
Question 12: What is the main purpose of antitrust laws?
Correct answer: To promote competition and prevent monopolies
Question 13: What happens in a recession?
Correct answer: Economic activity declines for a prolonged period
Question 14: What is a budget deficit?
Correct answer: When a country's expenses exceed its revenue
Question 15: What is the main goal of monetary policy?
Correct answer: To control inflation and stabilize the currency
Question 16: What is a tariff?
Correct answer: A tax on imported goods
Question 17: What is an exchange rate?
Correct answer: The value of one currency relative to another currency
Question 18: What is the law of supply and demand?
Correct answer: The theory that prices are determined by the availability of a good and the desire for it
Question 19: What does the term "liquidity" refer to?
Correct answer: The ease with which assets can be converted into cash
Question 20: What is a bond?
Correct answer: A loan made by an investor to a borrower
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