Practice Questions
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Which of the following best describes the role of fiscal policy in promoting economic growth?
When the government spends more money, it creates jobs and helps businesses grow. Other options are incorrect because Some think that lowering taxes h...
How does resource allocation impact economic equity in a growing economy?
When resources are shared unevenly, some groups get more benefits than others. Other options are incorrect because Some people think that sharing reso...
Which of the following best describes the relationship between economic growth and sustainable development?
Sustainable development means growing the economy in a way that protects the environment and helps everyone. Other options are incorrect because This ...
How does innovation and technology influence economic growth while considering opportunity costs in resource allocation?
Innovation and technology make production faster and cheaper. Other options are incorrect because Some might think that using fewer resources is alway...
How does economic growth impact income distribution in the context of supply and demand?
Economic growth can lead to more jobs, but not all jobs are the same. Other options are incorrect because This idea suggests that more jobs will help ...
What is the primary factor that drives economic growth in an economy?
When more resources are used wisely, businesses can grow. Other options are incorrect because Some might think that spending less helps save money; Pe...
What is the primary purpose of resource allocation in an economy?
The main goal of resource allocation is to use resources in the best way. Other options are incorrect because Some might think the goal is to share we...
What does the concept of opportunity cost refer to in the context of economic growth and resource allocation?
Opportunity cost is about what you give up when you make a choice. Other options are incorrect because This answer confuses total cost with opportunit...
If a country reallocates resources from consumer goods to capital goods, what is the most likely long-term effect on its economy?
When a country focuses on making capital goods, it builds things like factories and machines. Other options are incorrect because Some might think tha...
How does reallocating resources from consumer goods to capital goods influence long-term economic growth?
When we invest in capital goods, like machines and buildings, we can produce more in the future. Other options are incorrect because Some might think ...
Reallocating resources from consumer goods to capital goods can lead to increased productivity and long-term economic growth by enhancing ____, which is crucial for sustainable economic development.
Capital formation means building up tools, machines, and buildings that help produce more goods. Other options are incorrect because Some might think ...
Which of the following scenarios best illustrates the impact of reallocating resources from consumer goods to capital goods on long-term economic growth?
When a country makes fewer smartphones and builds more factories, it can produce more in the future. Other options are incorrect because Focusing on l...
A government is considering reallocating resources from the production of consumer goods to capital goods to stimulate long-term economic growth. Which of the following outcomes is most likely to occur as a result of this shift?
When a government invests in capital goods, like machines and buildings, it helps businesses produce more. Other options are incorrect because Some mi...
How does reallocating resources from consumer goods to capital goods impact long-term economic growth?
When we focus on making capital goods, like machines and tools, we can produce more in the future. Other options are incorrect because Some might thin...
Which of the following statements accurately reflect the relationship between resource allocation and economic growth? Select all that apply.
Other options are incorrect because This suggests that focusing on consumer goods will quickly boost growth; This implies that moving resources to cap...
Arrange the following steps in the process of reallocating resources to promote economic growth: 1) Increased investment in capital goods, 2) Higher productivity, 3) Reallocation of resources from consumer goods, 4) Growth in nominal GDP.
First, we move resources from making consumer goods to investing in capital goods. Other options are incorrect because This option suggests we start w...
Investment in capital goods is to economic growth as ____ is to consumer satisfaction.
Saving for future needs helps people buy what they want later. Other options are incorrect because Some think luxury spending makes them happy right a...
Master Economic Growth and Resource Allocation
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