--- primaryColor: 'rgb(121, 82, 179)' secondaryColor: '#DDDDDD' textColor: black shuffle_questions: true --- ## What is the primary function of an economy? - [ ] Creating wealth for only individuals - [ ] Ensuring equality among all citizens - [x] Managing the production and distribution of goods and services - [ ] Maintaining zero unemployments ## Which of the following is a central component of an economy's study? - [x] The allocation of scarce resources - [ ] Sports and recreation - [ ] Climate patterns - [ ] Astrological predictions ## What does GDP stand for in economic terms? - [ ] General Domestic Production - [ ] Gross Demographic Product - [x] Gross Domestic Product - [ ] Government Debt Provisions ## What does inflation mean in an economic context? - [ ] A decrease in overall price levels - [x] An increase in the general price levels of goods and services - [ ] A balanced price level ecosystem - [ ] The amount of government subsidy distribution ## What is a recession? - [ ] A period of economic growth - [ ] An expansion phase of an economy - [x] A period of economic decline typically defined by two consecutive quarters of negative GDP growth - [ ] A phase of declining inflation ## What role do central banks play in an economy? - [ ] Printing currency solely for local businesses - [x] Regulating monetary policy and controlling money supply - [ ] Operating retail banks - [ ] Managing individual investment portfolios ## What is the significance of supply and demand in an economy? - [ ] Supply and demand exclusively affect global markets only - [x] They determine the prices of goods and services in an economy - [ ] They are only relevant to socialist economies - [ ] They operate independently of market forces ## Which of the following best describes fiscal policy? - [ ] Policies related to workforce management - [x] Government policies regarding taxation and spending - [ ] Strategies for improving agricultural efficiency - [ ] Methods to monitor cultural trends ## What is the term for a situation where there is too much money chasing too few goods? - [ ] Stagnation - [ ] Recession - [ ] Productivity boom - [x] Inflation ## What impact does high unemployment have on an economy? - [ ] It typically spurs economic growth rapidly - [ ] It leads to higher wages universally - [ ] It stabilizes the economy in long-term - [x] It reduces overall consumer spending and slows economic growth