Q. What happens to supply when production costs increase?
-
A.
Supply increases
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B.
Supply decreases
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C.
Supply remains unchanged
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D.
Supply becomes elastic
Solution
When production costs increase, the supply of goods typically decreases because it becomes more expensive to produce them.
Correct Answer:
B
— Supply decreases
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Q. What is a common effect of high inflation?
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A.
Increased purchasing power
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B.
Decreased cost of living
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C.
Erosion of savings
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D.
Stabilization of prices
Solution
High inflation erodes the purchasing power of money, leading to a decrease in the value of savings.
Correct Answer:
C
— Erosion of savings
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Q. What is the primary purpose of national income accounting?
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A.
To measure inflation
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B.
To track government spending
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C.
To assess economic performance
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D.
To regulate prices
Solution
The primary purpose of national income accounting is to assess the economic performance of a country.
Correct Answer:
C
— To assess economic performance
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Q. What is the term for the total value of all final goods and services produced in a country in a given year?
-
A.
Net National Product
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B.
Gross National Product
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C.
Gross Domestic Product
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D.
National Income
Solution
The total value of all final goods and services produced in a country in a given year is known as Gross Domestic Product (GDP).
Correct Answer:
C
— Gross Domestic Product
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