Economic Engines Quiz

A price floor is set by the government to ensure that a price does not fall below a certain level. Which of the following is a common example of a price floor?

1. Minimum wage
2. Rent control
3. Price of oil
4. Agricultural subsidies

Answer: (a) Minimum wage

Which economic index is used to measure inflation by tracking price changes in a basket of goods and services?

1. GDP Deflator
2. CPI
3. PMI
4. Index of Industrial Production

Answer: (b) CPI

Fill in the blank: The Phillips Curve represents the inverse relationship between ____________.

1. Growth and GDP
2. Interest rate and exchange rate
3. Exports and inflation
4. Inflation and unemployment

Answer: (d) Inflation and unemployment

Match the following: Term Definition 1. Repo Rate a. Interest rate at which central banks lend to commercial banks 2. Reverse Repo Rate b. The interest rate at which commercial banks borrow from the central bank 3. Cash Reserve Ratio (CRR) c. Percentage of banks liabilities that must be invested in government-approved securities 4. Statutory Liquidity Ratio (SLR) d. Percentage of a bank's deposits that must be held in reserve

1. 1-b, 2-a, 3-c, 4-d
2. 1-b, 2-a, 3-d, 4-c
3. 1-c, 2-d, 3-a, 4-b
4. 1-d, 2-c, 3-b, 4-a

Answer: (b) 1-b, 2-a, 3-d, 4-c

Fill in the blank: A period of two consecutive quarters of negative GDP growth is typically defined as a __________.

1. Bubble
2. Boom
3. Fiscal expansion
4. Recession

Answer: (b) Boom

What is the main purpose of a Free Trade Agreement (FTA) between countries?

1. To protect domestic industries from foreign competition
2. To increase taxes on imported goods
3. To promote the exchange of goods and services between countries without tariffs
4. To create currency unions

Answer: (c) To promote the exchange of goods and services between countries without tariffs

Which of these is NOT considered a component of the Human Development Index (HDI)?

1. Life expectancy
2. Education level
3. GDP per capita
4. Stock market performance

Answer: (d) Stock market performance

Match the following: Tax Type Description 1. Progressive Tax a. Tax rate increases as income increases 2. Regressive Tax b. Same tax rate for all income groups 3. Excise Tax c. Tax levied on specific goods, like cigarettes or alcohol 4. Value Added Tax (VAT) d. Tax levied on goods and services at each production stage

1. 1-a, 2-b, 3-c, 4-d
2. 1-a, 2-b, 3-d, 4-c
3. 1-c, 2-d, 3-a, 4-b
4. 1-d, 2-a, 3-b, 4-c

Answer: (a) 1-a, 2-b, 3-c, 4-d

Which organisation monitors and supports global financial stability through the issuance of Special Drawing Rights (SDRs)?

1. IMF
2. World Bank
3. Bank for International Settlements
4. WTO

Answer: (a) IMF

Fill in the blank: The World Economic Forum (WEF) holds its annual meeting in __________.

1. Brussels
2. Paris
3. Davos
4. Vienna

Answer: (c) Davos