economics aqa alevel

Question 1

What is the basic economic problem?

Answer 1

Scarcity of resources.

Question 2

Define opportunity cost.

Answer 2

The cost of the next best alternative foregone.

Question 3

What does GDP stand for?

Answer 3

Gross Domestic Product.

Question 4

True or False: Inflation decreases the purchasing power of money.

Answer 4

True.

Question 5

What is the formula for calculating GDP using the expenditure approach?

Answer 5

GDP = C + I + G + (X - M), where C = consumption, I = investment, G = government spending, X = exports, M = imports.

Question 6

What is a market economy?

Answer 6

An economic system where decisions are made by supply and demand.

Question 7

Fill in the blank: The law of ______ states that as the price of a good increases, the quantity supplied increases.

Answer 7

Supply.

Question 8

What is the main goal of monetary policy?

Answer 8

To control inflation and stabilize the currency.

Question 9

True or False: A recession is defined as two consecutive quarters of negative GDP growth.

Answer 9

True.

Question 10

What is fiscal policy?

Answer 10

Government policy regarding taxation and spending to influence the economy.

Question 11

What is the difference between nominal and real GDP?

Answer 11

Nominal GDP is measured at current prices, while real GDP is adjusted for inflation.

Question 12

What are externalities?

Answer 12

Costs or benefits that affect third parties not involved in a transaction.

Question 13

Define price elasticity of demand.

Answer 13

The responsiveness of quantity demanded to a change in price.

Question 14

What is a public good?

Answer 14

A good that is non-excludable and non-rivalrous in consumption.

Question 15

True or False: Perfect competition is characterized by many buyers and one seller.

Answer 15

False.

Question 16

What is the role of the central bank?

Answer 16

To manage the nation’s currency, money supply, and interest rates.

Question 17

Fill in the blank: A ______ is a graphical representation of the relationship between price and quantity supplied.

Answer 17

Supply curve.

Question 18

What is the difference between a recession and a depression?

Answer 18

A recession is a temporary economic decline, while a depression is a prolonged and severe downturn.

Question 19

Define monopoly.

Answer 19

A market structure where a single seller dominates the market.

Question 20

What does the term ‘invisible hand’ refer to?

Answer 20

The self-regulating nature of the marketplace.

Question 21

What is consumer surplus?

Answer 21

The difference between what consumers are willing to pay and what they actually pay.

Question 22

True or False: A budget deficit occurs when government spending exceeds revenue.

Answer 22

True.

Question 23

What is the business cycle?

Answer 23

The fluctuations in economic activity over time, including expansion and contraction.

Question 24

What is a tariff?

Answer 24

A tax imposed on imported goods.

Question 25

Fill in the blank: The ______ curve shows the relationship between the price level and the quantity of output supplied.

Answer 25

Aggregate supply.

Question 26

Define inflation.

Answer 26

The rate at which the general level of prices for goods and services rises.

Question 27

What is the main purpose of the Consumer Price Index (CPI)?

Answer 27

To measure changes in the price level of a basket of consumer goods and services.

Question 28

True or False: The labor force includes both employed and unemployed individuals actively seeking work.

Answer 28

True.

Question 29

What is a subsidy?

Answer 29

A government payment to support a business or market.

Question 30

What does the term 'stagflation' mean?

Answer 30

A situation of stagnant economic growth combined with inflation.

Question 31

Fill in the blank: The ______ is the total value of all final goods and services produced in a country in a given time period.

Answer 31

GDP.

Question 32

What is the difference between fixed and variable costs?

Answer 32

Fixed costs do not change with output, while variable costs do.

Question 33

What is the purpose of antitrust laws?

Answer 33

To prevent monopolies and promote competition.

Question 34

True or False: Demand-pull inflation occurs when demand exceeds supply.

Answer 34

True.

Question 35

What is elasticity?

Answer 35

A measure of how much quantity demanded or supplied responds to a change in price.

Question 36

What is the main characteristic of oligopoly?

Answer 36

A market structure where a few large firms dominate the market.

Question 37

Fill in the blank: The ______ is the amount of goods and services that consumers are willing to purchase at a given price.

Answer 37

Quantity demanded.

Question 38

What does the term 'monetary policy' refer to?

Answer 38

The process by which the central bank controls the money supply.

Question 39

What is a trade deficit?

Answer 39

When a country's imports exceed its exports.

Question 40

True or False: The law of demand states that as the price of a good decreases, the quantity demanded increases.

Answer 40

True.

Question 41

What is the purpose of a price ceiling?

Answer 41

To prevent prices from rising above a certain level.

Question 42

Fill in the blank: A ______ is a market structure characterized by many sellers offering similar products.

Answer 42

Monopolistic competition.

Question 43

What is the impact of a negative externality?

Answer 43

It imposes costs on third parties not involved in the transaction.

Question 44

Define the term 'scarcity.'

Answer 44

The limited nature of society's resources.

Question 45

What is the significance of the Phillips Curve?

Answer 45

It illustrates the inverse relationship between inflation and unemployment.

Question 46

What does 'crowding out' refer to?

Answer 46

When government spending reduces private sector investment.

Question 47

True or False: A command economy is one where the government makes all economic decisions.

Answer 47

True.

Question 48

What is the primary function of the labor market?

Answer 48

To match workers with employers.

Question 49

Fill in the blank: The ______ effect refers to the change in consumer demand due to a change in purchasing power.

Answer 49

Income.

Question 50

What is the purpose of the World Trade Organization (WTO)?

Answer 50

To regulate international trade and resolve trade disputes.

Question 51

What is a mixed economy?

Answer 51

An economic system combining private and public enterprise.

Question 52

Define 'market failure.'

Answer 52

A situation where the allocation of goods and services is not efficient.

Question 53

What is the role of competition in a market economy?

Answer 53

To drive innovation and lower prices.

Question 54

True or False: Economic growth is measured by an increase in real GDP.

Answer 54

True.

Question 55

What is a recession?

Answer 55

A period of temporary economic decline during which trade and industrial activity are reduced.

Question 56

Fill in the blank: The ______ is the price at which the quantity demanded equals the quantity supplied.

Answer 56

Equilibrium price.

Question 57

What does the term 'demand-pull inflation' mean?

Answer 57

Inflation caused by an increase in demand for goods and services.

Question 58

What is the significance of the Laffer Curve?

Answer 58

It illustrates the relationship between tax rates and tax revenue.

Question 59

True or False: Supply-side economics emphasizes tax cuts to increase production.

Answer 59

True.

Question 60

What is a financial market?

Answer 60

A marketplace for buying and selling financial assets.

Question 61

Fill in the blank: The ______ effect occurs when consumers change their spending habits based on price changes.

Answer 61

Substitution.

Question 62

What is a budget surplus?

Answer 62

When government revenue exceeds its expenses.

Question 63

What does the term 'capital goods' refer to?

Answer 63

Goods used to produce other goods and services.

Question 64

True or False: The marginal cost of production is the cost of producing one more unit of a good.

Answer 64

True.

Question 65

What is the purpose of antitrust policies?

Answer 65

To promote competition and prevent monopolistic behavior.

Question 66

Fill in the blank: The ______ curve shows the relationship between the price level and the quantity of output demanded.

Answer 66

Aggregate demand.

Question 67

What is the difference between short-run and long-run aggregate supply?

Answer 67

Short-run aggregate supply is influenced by price levels, while long-run aggregate supply is determined by resources and technology.

Question 68

What is the significance of the trade balance?

Answer 68

It indicates the difference between a country's exports and imports.

Question 69

True or False: Structural unemployment occurs due to shifts in the economy.

Answer 69

True.

Question 70

What is the role of government in a capitalist economy?

Answer 70

To enforce laws and regulations that promote fair competition.