1. What is the primary measure used to gauge the economic performance of a country?
A. Consumer Price Index (CPI)
B. Gross Domestic Product (GDP)
C. Producer Price Index (PPI)
D. Unemployment Rate
Answer: B. Gross Domestic Product (GDP)
2. What does the Federal Reserve use to influence the economy?
A. Fiscal policy
B. Trade policy
C. Monetary policy
D. Regulatory policy
Answer: C. Monetary policy
3. Which agency is responsible for setting and implementing U.S. monetary policy?
A. Department of the Treasury
B. Federal Reserve System
C. Securities and Exchange Commission (SEC)
D. Federal Trade Commission (FTC)
Answer: B. Federal Reserve System
4. What is the primary tool the Federal Reserve uses to control inflation?
A. Adjusting interest rates
B. Changing tax rates
C. Regulating trade policies
D. Adjusting government spending
Answer: A. Adjusting interest rates
5. What does GDP stand for?
A. General Domestic Product
B. Gross Domestic Product
C. Gross Development Product
D. General Development Product
Answer: B. Gross Domestic Product
6. Which economic indicator measures the cost of a basket of consumer goods and services?
A. GDP
B. Consumer Price Index (CPI)
C. Producer Price Index (PPI)
D. Employment Rate
Answer: B. Consumer Price Index (CPI)
7. What is the term for the total market value of all final goods and services produced in a country within a year?
A. National Income
B. Gross Domestic Product (GDP)
C. Net National Product (NNP)
D. Gross National Product (GNP)
Answer: B. Gross Domestic Product (GDP)
8. What does the unemployment rate measure?
A. The percentage of people unemployed but actively seeking work
B. The total number of people employed
C. The percentage of people not in the labor force
D. The total number of job vacancies
Answer: A. The percentage of people unemployed but actively seeking work
9. What term describes a prolonged period of economic decline?
A. Recession
B. Expansion
C. Boom
D. Inflation
Answer: A. Recession
10. What is the term for the difference between a country’s exports and imports?
A. Trade deficit
B. Trade surplus
C. Balance of trade
D. Gross trade
Answer: C. Balance of trade
11. Who is the current Chair of the Federal Reserve (as of 2024)?
A. Jerome Powell
B. Janet Yellen
C. Ben Bernanke
D. Alan Greenspan
Answer: A. Jerome Powell
12. What is the purpose of the Federal Open Market Committee (FOMC)?
A. To regulate corporate mergers
B. To conduct monetary policy
C. To manage federal government spending
D. To enforce trade agreements
Answer: B. To conduct monetary policy
13. Which economic theory advocates for reducing government spending and taxes to stimulate economic growth?
A. Keynesian economics
B. Supply-side economics
C. Monetarism
D. Classical economics
Answer: B. Supply-side economics
14. What is the term for the economic condition where prices increase over time?
A. Deflation
B. Stagnation
C. Inflation
D. Depression
Answer: C. Inflation
15. What is the primary role of the U.S. Department of the Treasury?
A. Implement monetary policy
B. Manage federal government revenue and expenditure
C. Regulate financial markets
D. Enforce antitrust laws
Answer: B. Manage federal government revenue and expenditure
16. What is a budget deficit?
A. When government revenue exceeds government spending
B. When government spending exceeds government revenue
C. When exports exceed imports
D. When a company’s expenses exceed its revenue
Answer: B. When government spending exceeds government revenue
17. What does the term “fiscal policy” refer to?
A. Government spending and taxation decisions
B. Regulation of interest rates
C. Control of money supply
D. Trade agreements
Answer: A. Government spending and taxation decisions
18. What does the term “quantitative easing” refer to?
A. Increasing interest rates to reduce inflation
B. Reducing government spending to control deficits
C. Purchasing government securities to increase money supply
D. Increasing taxes to control economic overheating
Answer: C. Purchasing government securities to increase money supply
19. What is the term for a temporary economic downturn that is less severe than a recession?
A. Contraction
B. Slowdown
C. Depression
D. Stagflation
Answer: B. Slowdown
20. What is the term for the market where securities are bought and sold?
A. Commodity market
B. Securities market
C. Financial market
D. Labor market
Answer: C. Financial market
21. What is the name of the economic policy that emphasizes reducing trade barriers between countries?
A. Protectionism
B. Free trade
C. Isolationism
D. Mercantilism
Answer: B. Free trade
22. What is the term for the total value of assets owned by a country’s residents?
A. Net National Product
B. National Wealth
C. Gross Domestic Product
D. Net Wealth
Answer: B. National Wealth
23. What does the term “market equilibrium” refer to?
A. When supply equals demand
B. When supply exceeds demand
C. When demand exceeds supply
D. When market prices are unstable
Answer: A. When supply equals demand
24. What is the primary goal of antitrust laws?
A. To prevent monopolies and promote competition
B. To regulate international trade
C. To control inflation
D. To manage fiscal policy
Answer: A. To prevent monopolies and promote competition
25. What does “GDP per capita” measure?
A. Total GDP divided by the total population
B. Total national income
C. GDP minus inflation
D. Average income of top earners
Answer: A. Total GDP divided by the total population
26. What does the term “deflation” mean?
A. A decrease in the general price level of goods and services
B. An increase in the general price level of goods and services
C. A rise in employment rates
D. A decrease in unemployment rates
Answer: A. A decrease in the general price level of goods and services
27. Which index is used to measure changes in the prices received by producers for their products?
A. Producer Price Index (PPI)
B. Consumer Price Index (CPI)
C. Gross Domestic Product (GDP)
D. Employment Cost Index (ECI)
Answer: A. Producer Price Index (PPI)
28. What is a “monetary policy”?
A. Policy that deals with taxation and government spending
B. Policy that involves adjusting interest rates and managing money supply
C. Policy related to international trade agreements
D. Policy focused on labor market regulations
Answer: B. Policy that involves adjusting interest rates and managing money supply
29. What is “stagflation”?
A. A period of high inflation and high unemployment
B. A period of high economic growth and low inflation
C. A period of low inflation and low unemployment
D. A period of economic stability and growth
Answer: A. A period of high inflation and high unemployment
30. What does “fiscal stimulus” refer to?
A. Reducing interest rates to boost the economy
B. Increasing government spending or decreasing taxes to stimulate economic growth
C. Decreasing government spending and increasing taxes
D. Regulating financial markets to prevent bubbles
Answer: B. Increasing government spending or decreasing taxes to stimulate economic growth
31. What is the role of the U.S. Securities and Exchange Commission (SEC)?
A. To regulate monetary policy
B. To enforce laws related to securities and financial markets
C. To manage federal tax revenue
D. To conduct economic research
Answer: B. To enforce laws related to securities and financial markets
32. What is the term for the situation where the economy is growing but inflation is also rising?
A. Economic expansion
B. Economic overheating
C. Economic contraction
D. Economic recovery
Answer: B. Economic overheating
33. What is “GDP growth rate”?
A. The rate at which the country’s GDP increases over time
B. The percentage of GDP spent on infrastructure
C. The rate at which inflation affects GDP
D. The percentage change in the price level of goods
Answer: A. The rate at which the country’s GDP increases over time
34. Which U.S. government agency provides economic analysis and projections?
A. Office of Management and Budget (OMB)
B. Federal Reserve Bank
C. Bureau of Economic Analysis (BEA)
D. Congressional Budget Office (CBO)
Answer: C. Bureau of Economic Analysis (BEA)
35. What is the “National Debt”?
A. The total amount of money the federal government owes to creditors
B. The amount of money owed by private individuals
C. The total budget surplus of the federal government
D. The amount of money held by the Federal Reserve
Answer: A. The total amount of money the federal government owes to creditors
36. What is the term for a market characterized by rising prices?
A. Bear market
B. Bull market
C. Stagnant market
D. Volatile market
Answer: B. Bull market
37. What does the term “economic contraction” mean?
A. A decrease in national income and output
B. An increase in national income and output
C. A stable economy
D. An economy in recovery
Answer: A. A decrease in national income and output
38. What is a “balance sheet recession”?
A. A recession caused by excessive government spending
B. A recession where businesses focus on paying off debt rather than investing
C. A recession characterized by high inflation
D. A recession caused by rising interest rates
Answer: B. A recession where businesses focus on paying off debt rather than investing
39. What does the term “trade surplus” mean?
A. When a country imports more than it exports
B. When a country exports more than it imports
C. When a country has a balanced trade
D. When a country has high tariffs on imports
Answer: B. When a country exports more than it imports
40. What is the role of the International Monetary Fund (IMF)?
A. To regulate international trade
B. To provide financial assistance to countries in need
C. To set global interest rates
D. To enforce international law
Answer: B. To provide financial assistance to countries in need
41. What is the term for government payments to individuals, such as social security or unemployment benefits?
A. Subsidies
B. Grants
C. Transfers
D. Loans
Answer: C. Transfers
42. What does the term “currency appreciation” refer to?
A. An increase in the value of one currency relative to another
B. A decrease in the value of a currency
C. A stable currency exchange rate
D. A fluctuation in commodity prices
Answer: A. An increase in the value of one currency relative to another
43. What is the concept of “opportunity cost”?
A. The cost of a product or service
B. The loss of potential gain from other alternatives when one alternative is chosen
C. The total cost of production
D. The fixed cost associated with production
Answer: B. The loss of potential gain from other alternatives when one alternative is chosen
44. What is the term for a tax imposed on the value added to goods and services at each stage of production?
A. Income tax
B. Value-added tax (VAT)
C. Capital gains tax
D. Sales tax
Answer: B. Value-added tax (VAT)
45. What is the purpose of the Consumer Financial Protection Bureau (CFPB)?
A. To regulate the banking industry
B. To protect consumers in the financial sector
C. To enforce antitrust laws
D. To manage federal student loans
Answer: B. To protect consumers in the financial sector
46. What is the term for a prolonged period of low economic activity?
A. Expansion
B. Recession
C. Stagnation
D. Boom
Answer: C. Stagnation
47. What does the term “supply chain” refer to?
A. The network of businesses that collaborate to produce a product
B. The process of selling products directly to consumers
C. The series of steps to manage financial transactions
D. The methods used to evaluate business performance
Answer: A. The network of businesses that collaborate to produce a product
48. What is the main purpose of a central bank?
A. To manage the country’s financial assets
B. To regulate financial institutions and implement monetary policy
C. To control government spending
D. To set interest rates for consumer loans
Answer: B. To regulate financial institutions and implement monetary policy
49. What does the term “liquidity” refer to in finance?
A. The ability to meet short-term financial obligations
B. The total assets of a company
C. The rate of return on an investment
D. The profit margins of a business
Answer: A. The ability to meet short-term financial obligations
50. What is the term for the policy aimed at controlling inflation?
A. Fiscal policy
B. Monetary policy
C. Trade policy
D. Regulatory policy
Answer: B. Monetary policy