Cutting-edge Economics Economic Indicators Test - 77+ MCQs: Economics test: Evaluate Your Knowledge with Economic Indicators Questions and Answers

1. What does the term 'inflation targeting' involve?

Maintaining a fixed exchange rate

Setting specific inflation rate goals

Regulating interest rates

Promoting exports

2. In the context of the Phillips Curve, what does a negative correlation between inflation and unemployment imply?

High inflation is associated with low unemployment

High inflation is associated with high unemployment

Low inflation is associated with low unemployment

Low inflation is associated with high unemployment

3. Which economic indicator is used to assess the overall health of a nation's labor market?

Gross Domestic Product (GDP)

Consumer Price Index (CPI)

Unemployment rate

Balance of trade

4. What does the term 'balance of trade' represent?

Difference between exports and imports

Overall economic output

Government budget balance

Consumer spending balance

5. What does the term 'interest rate' signify?

Rate of inflation

Cost of borrowing or return on savings

Rate of tax imposition

Growth rate of the economy

6. Which economic theory emphasizes the role of expectations and animal spirits in influencing economic decisions?

Classical economics

Monetarist economics

Keynesian economics

Behavioral economics

7. What does the term 'trade surplus' indicate?

Excess of imports over exports

Equilibrium in trade

Excess of exports over imports

Decrease in trade volume

8. Which of the following represents a contractionary monetary policy?

Decreasing interest rates

Increasing money supply

Selling government securities

Cutting taxes

9. Which of the following is NOT a component of GDP?

Government spending

Consumer spending

Business investment

Foreign exchange rates

10. Which economic theory emphasizes the importance of supply-side policies in promoting economic growth?

Keynesian economics

Monetarist economics

Supply-side economics

Behavioral economics

11. Which of the following is an indicator of inflation?

CPI

GDP

Unemployment Rate

Interest Rates

12. What does the term 'crowding out' refer to in the context of fiscal policy?

Increase in consumer spending due to government policies

Situation where private investment is reduced due to government borrowing

Increase in government revenue from taxation

Situation where government expenditure exceeds revenues

13. In the context of monetary policy, what does the term 'liquidity trap' refer to?

Situation where interest rates are so high that they reduce borrowing and investment

Situation where interest rates are so low that they have little effect on stimulating the economy

Situation where monetary policy is ineffective due to extreme market volatility

Situation where the central bank loses control over the money supply

14. What does the term 'fiscal policy' refer to?

Monetary measures by central banks

Government's taxation and spending policies

Consumer spending habits

Market demand and supply

15. Which term describes the responsiveness of quantity demanded to a change in price?

Elasticity

Equilibrium

Inflation

Deflation

16. Which economic indicator is a measure of an economy's overall health but does not account for population size?

Per capita GDP

Nominal GDP

Real GDP

GDP growth rate

17. What is 'Shadow Economy'?

An economy based on cryptocurrencies

An economy not subject to government regulation or oversight

An economy with high levels of unemployment

An economy focused on illegal activities

18. What is the primary goal of expansionary monetary policy?

Control inflation

Stimulate economic growth

Reduce government debt

Stabilize exchange rates

19. What does the 'Big Mac Index' reflect?

A country's currency valuation

The purchasing power parity between currencies

The inflation rate in a country

The GDP growth rate

20. What is 'Quantitative Easing'?

A monetary policy tool involving buying government bonds

A fiscal policy tool involving increasing government spending

A trade policy tool involving tariff reductions

An international finance tool involving currency swaps

Economics - Economic Indicators MCQ Test 4