Economics Quiz

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson
Download our mobile app to listen on the go
Get App

Questions and Answers

Which of the following is a characteristic of a perfectly competitive market?

  • Many buyers and sellers (correct)
  • High barriers to entry
  • Limited product differentiation
  • Control over market price by individual firms

What is the impact of an increase in interest rates on consumer spending?

  • Decrease in consumer spending due to higher cost of borrowing (correct)
  • Increase in consumer spending due to higher returns on savings
  • No impact on consumer spending as interest rates do not affect borrowing
  • Shift from savings to investment leading to higher consumer spending

What is the primary function of the central bank in a country's economy?

  • Controlling the money supply and interest rates (correct)
  • Regulating international trade and tariffs
  • Managing consumer protection laws
  • Directing government spending and taxation

What does the term 'GDP' stand for?

<p>Gross Domestic Product (C)</p> Signup and view all the answers

What is the main function of a central bank in an economy?

<p>Controlling the money supply and interest rates (C)</p> Signup and view all the answers

What is the impact of inflation on the purchasing power of money?

<p>It decreases the purchasing power of money (A)</p> Signup and view all the answers

Flashcards are hidden until you start studying

Study Notes

Characteristics of Perfectly Competitive Market

  • A perfectly competitive market is characterized by many firms producing a homogeneous product, free entry and exit, and perfect information.

Interest Rates and Consumer Spending

  • An increase in interest rates reduces consumer spending as it increases the cost of borrowing, making it more expensive for consumers to purchase goods and services.

Central Bank's Primary Function

  • The primary function of a central bank is to regulate the money supply, set monetary policy, and maintain the stability of the financial system.

GDP Definition

  • GDP stands for Gross Domestic Product, which is the total value of all final goods and services produced within a country's borders over a specific period.

Central Bank's Main Function

  • The main function of a central bank is to maintain price stability, regulate the money supply, and act as a lender of last resort to prevent the collapse of the financial system.

Inflation's Impact on Purchasing Power

  • Inflation reduces the purchasing power of money, as it erodes the value of money, making it less valuable and reducing the quantity of goods and services that can be bought with a given amount of money.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

More Like This

Use Quizgecko on...
Browser
Browser