Practice Questions
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How does consumer confidence typically affect economic changes in a country?
When people feel good about their jobs and money, they spend more. Other options are incorrect because Some might think that confidence doesn't matter...
How can fiscal policy influence economic indicators such as unemployment and inflation?
When the government spends more money and lowers taxes, people have more money to spend. Other options are incorrect because Some think lowering inter...
During a recession, which of the following economic indicators is most likely to decline significantly?
During a recession, people buy less and businesses make less money. Other options are incorrect because Some might think that consumer confidence alwa...
How can a sudden external shock, such as a natural disaster, impact consumer confidence and the supply and demand equilibrium in an economy?
A natural disaster can scare people. Other options are incorrect because Some might think that more supply means lower prices; It's a common belief th...
How does inflation impact global trade and the interpretation of economic indicators?
Inflation can change how much things cost. Other options are incorrect because Some might think inflation makes trade easier and data clearer; It's a ...
What is typically a key indicator of economic growth in a country?
When more people have jobs, they earn money. Other options are incorrect because Some think rising prices mean growth, but high inflation can hurt peo...
What is a recession in economic terms?
A recession happens when the economy is not doing well for a long time. Other options are incorrect because Some might think a recession means the eco...
What is inflation in economic terms?
Inflation means prices go up. Other options are incorrect because Some might think inflation means prices go down; A stable price level means prices d...
Arrange the following steps in the correct order to explain how a technological advancement can lead to changes in market prices and quantities: A) Consumers respond to the new prices by altering their demand for products, B) A new technology reduces production costs for firms, C) Firms increase production to meet the new demand, D) Market prices adjust based on the new supply and demand equilibrium.
First, new technology lowers production costs for companies. Other options are incorrect because This option suggests that consumers change their buyi...
If a sudden technological advancement in production allows firms to reduce costs significantly, what is the most likely immediate effect on market prices and quantity supplied in a competitive market?
When production costs go down, companies can make more products for less money. Other options are incorrect because This answer suggests that prices g...
A new technology is introduced that reduces the cost of producing smartphones. How would you classify the resulting economic change in terms of market structure effects?
When it costs less to make smartphones, companies can produce more. Other options are incorrect because Some might think that lower costs make people ...
If a new technology reduces production costs for a good, how would this typically affect its market price and quantity sold?
When it costs less to make something, companies can sell it for less. Other options are incorrect because This idea suggests that more demand makes pr...
Which of the following statements accurately explain how market shifts can influence economic factors such as price and quantity? Select all that apply.
Other options are incorrect because This suggests that higher demand always raises prices and supply; It assumes that technology always lowers costs....
Marginal analysis is to price determination as derived demand is to what?
Derived demand means that the demand for one thing depends on the demand for another. Other options are incorrect because Some might think derived dem...
A new technology has been introduced that significantly reduces the production costs for a popular consumer good. In response, the market price of this good decreases while the quantity sold increases. How would you explain the economic changes using the principles of marginal analysis and derived demand?
When production costs go down, producers can make more goods for less money. Other options are incorrect because This answer suggests that higher prof...
When analyzing the effects of a sudden increase in demand for electric vehicles, it is important to consider how this change influences _____ in the market, including price and quantity supplied.
Derived demand means that the demand for one product affects the demand for another. Other options are incorrect because Opportunity cost is about wha...
How does a technological advancement in production impact the market equilibrium for a good?
When technology improves, it makes production cheaper. Other options are incorrect because This answer suggests that prices stay the same but fewer it...
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