50 Questions
Who is responsible for controlling the money supply and regulating banks in the United States?
The Federal Reserve
What is the term used to describe the situation when a country's exports exceed its imports?
Trade surplus
What is the main goal of expansionary fiscal policies?
To increase spending and stimulate economic growth
What is the term used to describe an increase in the overall price level?
Inflation
Which one of these is the most important job of the Federal Reserve?
Creating monetary policy
Who is the current chairperson of the Federal Reserve?
Jerome Powell
How does lowering interest rates affect the demand for money?
Increases the demand for money
How do banks create money?
By lending out more money than they have in reserves
Which one of these is true about the law of demand?
As price decreases, quantity demanded increases
Which one of these is an example of an elastic demand?
Demand for gasoline
Which one of these factors can shift the demand curve?
Prices of related goods
Which one of these is true about a price floor?
It sets a minimum price
Who benefits from international trade?
All participating countries
What is a tariff?
A tax on imported goods
Define protectionism. What is the argument in favor of protectionism?
An economic policy to shield domestic industries from foreign competition
What is a trade surplus?
When a country exports more goods than it imports
What is a trade deficit?
When a country imports more goods and services than it exports
What was the purpose of NAFTA?
To eliminate or reduce trade barriers and promote economic cooperation among the United States, Canada, and Mexico
What is economics?
The study of how individuals and societies make choices about the use of scarce resources
What is the Law of Demand?
When the price of a good or service increases, the quantity demanded decreases, and vice versa
Which of the following is an example of mandatory spending in the United States?
Social Security
Which of the following is a goal of fiscal policy?
Low unemployment
What is the term used to describe an increase in the overall price level?
Inflation
Which of the following is true about the glass ceiling?
It only affects certain groups
Which of the following is a characteristic of a progressive tax system?
Tax rates increase with income
Which of the following is a characteristic of discretionary spending?
It includes defense
Which one of these is the most important job of the Federal Reserve?
Managing the money supply
Who is the current chairperson of the Federal Reserve?
Jerome Powell
How does lowering interest rates affect the demand for money?
Increases the demand for money
How do banks create money?
By lending out deposits
What is the Fed's most important monetary policy tool?
Open market operations
What policies would the Fed use to fight inflation?
Contractionary monetary policies
According to comparative advantage, which country should focus on producing computers?
Country A
What is the purpose of a tariff?
To make foreign goods more expensive
What is the effect of increasing the money supply?
Lowering interest rates
How can individuals avoid losing value on their savings due to inflation?
Invest in assets with better interest rates
What is the main argument in favor of protectionism?
To protect domestic jobs and industries
What is the definition of interest?
The cost of borrowing money or the return earned on an investment
Which of the following is not one of the three key economic questions?
When to produce?
Which of the following is an example of a positive externality?
Education
Which of the following is not one of the four primary market structures?
Monopsony
What is the Consumer Price Index (CPI)?
A measure of the average price level of goods and services in an economy
What is a budget deficit?
When government spending exceeds government revenue in a given period
What is monetary policy?
The use of interest rates and the money supply to influence the economy
Which one of these is true about a price ceiling?
It sets a maximum price that can be charged for a good or service.
Which one of these is true about a subsidy?
It is a payment from the government to encourage production.
Which one of these is true about a natural monopoly?
It occurs when only one firm can efficiently provide a good or service.
Which one of these is true about the elasticity of supply?
It is affected by production costs.
Which one of these is true about a trade deficit?
It occurs when a country's imports exceed its exports.
Which one of these is true about real GDP?
It accounts for inflation.
Quiz: Understanding Interest and its Role in the Economy Test your knowledge on interest and its impact on the economy with this quiz. Learn about the definition of interest, how it affects borrowing and investing, and how it can be used to cool down the economy and reduce inflationary pressures. Challenge yourself to answer questions and improve your understanding of this crucial economic concept.
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