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Grade 12 C

Last updated about 1 year ago

12 questions

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Question 1

1.

What is a characteristic of a command economy?

Consumers drive market choices.

Prices are determined by supply and demand.

Businesses compete for profits.

Government makes production decisions.

Question 2

2.

What does GDP measure in an economy?

Income of the average citizen.

Total value of all goods produced.

Government spending levels.

Amount of currency in circulation.

Question 3

3.

What is opportunity cost?

Value of the next best alternative forgone.

Cost of a missed deadline.

Price of a substitute good.

Total cost of all options.

Question 4

4.

What is inflation?

Decrease in the unemployment rate.

General increase in prices over time.

Increase in stock market values.

Rise in consumer spending only.

Question 5

5.

What is the primary purpose of tariffs in an economy?

To raise government revenue only.

To increase import quotas.

To protect domestic industries from foreign competition.

To lower consumer prices.

Question 6

6.

What is a direct effect of inflation on consumers?

Purchasing power decreases over time due to rising prices.

Salaries increase effectively each year.

Savings grow faster than costs.

Interest rates drop instantly.

Question 7

7.

How do central banks typically combat recession?

Raising interest rates significantly.

Increasing taxes on all citizens.

Reducing public spending entirely.

Lowering interest rates to encourage borrowing and spending.

Question 8

8.

Which term describes the overall rise in prices in an economy?

Stagnation relates to unchanged price levels.

Deflation indicates falling prices overall.

Recession is solely about job loss.

Inflation refers to the general increase in price levels.

Question 9

9.

What is the primary cause of demand-pull inflation?

Government regulations on prices.

Increased consumer demand for goods and services.

A decrease in supply of goods.

Higher production costs of resources.

Question 10

10.

Which index most commonly measures inflation in the U.S.?

Consumer Price Index (CPI).

Gross Domestic Product (GDP)

Producer Price Index (PPI)

Retail Sales Index (RSI)

Question 11

11.

How can inflation affect purchasing power?

It has no effect on purchasing power.

It increases savings for consumers.

It decreases purchasing power over time.

It increases value of currency.

Question 12

12.

What trend is typically associated with hyperinflation?

Low interest rates for loans.

Low unemployment rates nationally.

Rapid and excessive increases in prices.

Stable economic growth rates.