Economic Goals and Political Systems

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Questions and Answers

What is the most direct consequence of increased prices on economic growth?

Improved price stability

Increased resource costs (correct)

Increased consumer spending

Higher employment rates

How does full employment conflict with price stability?

Increased employment raises income and pressures prices. (correct)

Higher employment leads to increased spending.

Full employment results in lower prices.

Low employment decreases resource allocation efficiency.

Which of the following factors promotes economic growth through resource efficiency?

Decreased wages

Limited consumer choice

Full unemployment

High demand for labor (correct)

What is a negative effect of having more imports than exports on the economy?

Weak economy Signup and view all the answers

How does economic freedom relate to productivity?

More freedom promotes higher productivity. Signup and view all the answers

What is the relationship between environmental stewardship and economic growth?

Neglecting the environment promotes economic challenges. Signup and view all the answers

What effect does employed worker spending have on economic growth?

Employed workers contribute to higher economic growth. Signup and view all the answers

Which of the following accurately describes the role of technology in relation to employment?

Technology can replace human jobs, creating economic challenges. Signup and view all the answers

How does political stability relate to economic growth?

A stable government aids in long-term planning and investment. Signup and view all the answers

What is one outcome of achieving reduced public debt?

Increased loans available for investments. Signup and view all the answers

Which statement correctly describes the relationship between economic growth and public debt?

Economic growth can help reduce a country's public debt. Signup and view all the answers

How does increased productivity and efficiency affect the economy?

Resources are maximized, promoting economic growth. Signup and view all the answers

What is a consequence of equitable distribution of income?

It can promote economic growth by satisfying the population. Signup and view all the answers

What impact does economic decay have on resource availability for businesses?

It forces businesses to make difficult decisions due to fewer resources. Signup and view all the answers

Which of the following pairs represents complementary economic goals?

Economic growth and reduced public debt. Signup and view all the answers

What does price stability signify for the economy?

An unhealthy economic environment characterized by inflation and deflation. Signup and view all the answers

Which economic goal is negatively affected when public debt increases?

Economic growth. Signup and view all the answers

How does competition for resources affect price stability?

It may lead to increased prices due to higher demand. Signup and view all the answers

Study Notes

Economic Goals

Every political system attempts to establish economic goals to focus the use of productive resources.
Reaching one goal can make another goal easier to achieve (complementary) or more difficult to achieve (conflicting).
Political stability is key as a stable government helps with long-term planning and investment, guaranteeing consistency in using resources.
A stable government encourages economic growth as uncertainty decreases investment.
Reduced public debt is vital to allow governments to invest in the economy and have money for future projects.
Economic growth is the increase in the total production of goods and services in the economy. Increased growth provides more opportunities, new resources, skilled labour, and innovation.
Increased productivity and efficiency is when resources are maximized to enhance profit and economic growth.
Equitable income distribution involves dividing the national output fairly, which can be difficult to achieve due to various opinions on "fair".
Price stability involves having a stable price level, not too high (inflation) or too low (deflation).
Full employment is a key goal to ensure adequate spending and a thriving economy.
A viable balance of payments and a stable currency are essential for healthy international trade.
Economic freedom allows for consumer choice, savings, and investments.
Environmental stewardship involves responsible use of natural resources, considering the interests of current and future generations.

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Description

This quiz explores the relationship between economic goals and political systems, focusing on concepts such as political stability, public debt, and equitable income distribution. Understand how reaching one goal can affect another and the importance of a stable government for economic growth. Test your knowledge on these critical economic principles.