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The World Of Economics - Test
Contributed by: Hewitt
  • 1. What is the basic economic problem?
A) Scarcity
B) Deflation
C) Surplus
D) Inflation
  • 2. What does GDP stand for?
A) General Development Program
B) Gross Development Plan
C) Gross Domestic Product
D) General Domestic Product
  • 3. Which of the following is a command economy?
A) North Korea
B) United States
C) Germany
D) Japan
  • 4. What does the term 'liquidity' refer to?
A) The profitability of an investment
B) The risk of an investment
C) The ease of converting an asset to cash
D) The stability of a currency
  • 5. Which of the following defines opportunity cost?
A) The cost of the next best alternative
B) The cost of resources used
C) The benefit received from a decision
D) The total cost of a decision
  • 6. What is diversification in investments?
A) Spreading investments across various assets
B) Buying only stocks
C) Holding cash only
D) Investing in a single asset
  • 7. Which of the following is a fiscal policy tool?
A) Interest rates
B) Government spending
C) Exchange rates
D) Money supply
  • 8. What is a market economy?
A) An economy with equal distribution
B) An economy with government control
C) An economy with fixed prices
D) An economy based on supply and demand
  • 9. Which of the following is considered a natural resource?
A) Labor
B) Oil
C) Factory
D) Money
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