721. What is the multiplier effect in economics?
A) The impact of inflation on prices.
B) The magnification of an initial change in spending into a larger change in GDP.
C) The reduction in consumer spending during a recession.
D) The effect of interest rates on investment.
722. What is the natural rate of unemployment?
A) The rate of unemployment that exists when the economy is operating at full employment.
B) The rate of unemployment that is determined solely by government policies.
C) The rate of unemployment that results from normal turnover in the labor market.
D) The rate of unemployment that is determined by inflation.
723. What is the difference between monetary policy and fiscal policy?
A) Monetary policy involves changes in government spending, while fiscal policy involves changes in interest rates.
B) Monetary policy involves changes in interest rates and the money supply, while fiscal policy involves changes in government spending and taxation.
C) There is no difference between monetary and fiscal policy.
D) Fiscal policy involves changes in international trade, while monetary policy involves changes in inflation rates.
724. What is the goal of expansionary monetary policy?
A) To decrease the money supply.
B) To stimulate economic growth and decrease unemployment.
C) To control inflation.
D) To reduce government spending.
725. What is the national debt?
A) The total value of goods and services produced in a country.
B) The total amount of money the government owes.
C) The difference between exports and imports.
D) The total value of a country’s currency in circulation.
726. What is the budget deficit?
A) The total amount of money the government owes.
B) The excess of government spending over government revenues in a given period.
C) The difference between exports and imports.
D) The total value of goods and services produced in a country.
727. What is the crowding-out effect in economics?
A) The reduction in consumer spending during a recession.
B) The increase in consumer spending during an economic boom.
C) The decrease in private spending that occurs when government spending increases.
D) The increase in investment during an economic downturn.
728. What is the Phillips Curve relationship in the short run?
A) A trade-off between inflation and unemployment, where decreasing unemployment leads to higher inflation.
B) A direct relationship between inflation and unemployment, where both increase simultaneously.
C) An inverse relationship between inflation and unemployment, where decreasing unemployment leads to lower inflation.
D) No relationship between inflation and unemployment.
729. What is the Laffer Curve?
A) A curve that illustrates the trade-off between inflation and unemployment.
B) A curve that represents the production possibilities of an economy.
C) A curve that shows the relationship between the price of goods and the quantity demanded.
D) A curve that shows the relationship between tax rates and tax revenues, suggesting that there is an optimal tax rate to maximize government revenue.
730. What is the difference between cyclical and structural unemployment?
A) Cyclical unemployment is caused by changes in technology, while structural unemployment is caused by fluctuations in the business cycle.
B) Cyclical unemployment is caused by economic downturns, while structural unemployment is caused by mismatches between job seekers and available jobs.
C) Cyclical unemployment is caused by mismatches between job seekers and available jobs, while structural unemployment is caused by changes in consumer preferences.
D) There is no difference between cyclical and structural unemployment.
Admin