- 1. Political economy is a social science that studies the relationships between individuals, society, and government in the production and distribution of resources. It examines how political institutions and economic systems interact to shape the allocation of wealth and power. Political economy analyzes the dynamics of markets, policies, and institutions to understand issues such as inequality, economic growth, and development. By exploring the interplay between politics and economics, political economy seeks to inform policies and promote better societal outcomes.
What is political economy?
A) The study of only economics without any political considerations.
B) The study of only politics without any economic considerations.
C) The study of law and society.
D) The study of how political institutions and economic systems interact.
- 2. Which economic system is characterized by government ownership of the means of production?
A) Socialism
B) Communism
C) Mercantilism
D) Capitalism
- 3. Which economic system relies on market forces to determine prices and allocate resources?
A) Capitalism
B) Communism
C) Socialism
D) Mercantilism
- 4. In the context of political economy, what is a tariff?
A) A subsidy given to foreign producers for exporting goods.
B) A restriction on the flow of capital across borders.
C) A tax on exported goods to encourage domestic consumption.
D) A tax on imported goods to protect domestic industries.
- 5. Which economic concept refers to the total value of all goods and services produced within a country's borders in a specific time period?
A) Inflation Rate
B) Consumer Price Index (CPI)
C) Gross Domestic Product (GDP)
D) Balance of Trade
- 6. In the context of international political economy, what does the acronym WTO stand for?
A) World Trade Organization
B) World Taxation Organization
C) World Treaty Organization
D) World Tariff Organization
- 7. Which concept refers to the ability of a country to produce a good at a lower opportunity cost than another country?
A) Comparative advantage
B) Absolute advantage
C) Balance of payments
D) Specialization
- 8. What is the economic term for a prolonged period of negative economic growth and high unemployment?
A) Boom
B) Recession
C) Deflation
D) Inflation
- 9. Which economic theory proposes that government should increase spending and lower taxes to stimulate demand during economic downturns?
A) Monetarism
B) Keynesian economics
C) Classical economics
D) Supply-side economics
- 10. What is the term for the study of income distribution and inequality within societies?
A) Development economics
B) Monetary economics
C) Distributional economics
D) Behavioral economics
- 11. What concept refers to the theory that economic production should serve the welfare of all individuals in society?
A) Behavioral economics
B) Neoclassical economics
C) Welfare economics
D) Development economics
- 12. What does the acronym NAFTA stand for?
A) National Association of Financial Trade Agreements
B) North Atlantic Free Trade Agreement
C) North American Free Trade Agreement
D) National Agreement for Farm Trade Advancement
- 13. Which term describes the phenomenon of increasing interconnectedness of economies and societies?
A) Globalization
B) Protectionism
C) Localization
D) Economic nationalism
- 14. Which country is known for implementing a 'command economy' during the rule of Mao Zedong?
A) Russia
B) Germany
C) United States
D) China
- 15. What is the term for the proportion of people actively seeking employment who are unable to find it?
A) Minimum wage
B) Trade deficit
C) Labor force participation rate
D) Unemployment rate
- 16. Which organization is responsible for overseeing international monetary and financial issues, and promoting global monetary cooperation?
A) World Trade Organization (WTO)
B) European Central Bank (ECB)
C) United Nations (UN)
D) International Monetary Fund (IMF)
- 17. What is the term for when a company dominates a specific market?
A) Monopolistic competition
B) Oligopoly
C) Monopoly
D) Perfect competition
- 18. What type of market structure has many sellers but differentiated products?
A) Oligopoly
B) Perfect competition
C) Monopolistic competition
D) Monopoly
- 19. Which term refers to the process of selling state-owned assets to private investors?
A) Regulation
B) Privatization
C) Nationalization
D) Subsidization
- 20. Which institution sets short-term interest rates in the United States?
A) Securities and Exchange Commission (SEC)
B) Treasury Department
C) Federal Reserve
D) Internal Revenue Service (IRS)
- 21. What is the term for imposing a financial penalty on imported goods to protect domestic industries?
A) Quota
B) Dumping
C) Subsidy
D) Tariff
- 22. What is the term for increasing the value of a country's currency in relation to other currencies?
A) Inflation
B) Appreciation
C) Depreciation
D) Deflation
- 23. Which term refers to the mechanism by which the government manages the supply of money and interest rates to influence the economy?
A) Industrial policy
B) Fiscal policy
C) Monetary policy
D) Trade policy
- 24. The concept of 'invisible hand' is associated with which economist?
A) Milton Friedman
B) Adam Smith
C) Karl Marx
D) John Maynard Keynes
- 25. Which economic concept refers to the general increase in prices over time?
A) Boom
B) Deflation
C) Inflation
D) Recession
- 26. In economics, what does the term 'Gini coefficient' measure?
A) Income inequality
B) Consumer price index
C) Labor productivity
D) Interest rate
- 27. In economics, what does the term 'ceteris paribus' mean?
A) Opportunity cost
B) All other things being equal
C) Purchasing power parity
D) Supply and demand
- 28. What is the term for a policy of government spending and taxation to influence the economy?
A) Trade policy
B) Monetary policy
C) Industrial policy
D) Fiscal policy
- 29. What is the term for the phenomenon where wages increase at a slower rate than productivity growth?
A) Wage inflation
B) Real wage decline
C) Nominal wage growth
D) Wage stagnation
- 30. Which theory argues that governments should not interfere in the economy?
A) Keynesian economics
B) Marxism
C) Socialism
D) Laissez-faire
- 31. Which country has the world's largest economy by GDP?
A) Japan
B) United States
C) Germany
D) China
- 32. Which type of unemployment results from changes in the business cycle?
A) Frictional
B) Seasonal
C) Cyclical
D) Structural
- 33. Which term describes a situation where the market fails to allocate resources efficiently?
A) Factor mobility
B) Pareto efficiency
C) Market failure
D) Perfect competition
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