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Economics Quiz

Economics Quiz - Set 14 (Advanced)

Play this economics quiz and check your economics knowledge. The next quiz will be updated tomorrow.

✍ ₳uthored By - GP Sir

GP Sir on July 31, 2025

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Economics Quiz - Set 14 (Advanced)

1. Which of the following best describes the “Natural Rate of Unemployment”?

The unemployment rate when the economy is at full employment Zero unemployment rate The unemployment rate during recession Unemployment caused by technological change

2. Which theory suggests that fiscal policy has limited effect on output because of crowding out?

Classical Theory Keynesian Theory Monetarist Theory Supply-Side Economics

3. In the IS-LM model, what effect does an increase in government spending have?

Shifts IS curve right, increases output and interest rates Shifts LM curve left, reduces output Shifts IS curve left, decreases output Shifts LM curve right, increases interest rates

4. What is the main criticism of Rational Expectations Theory?

Assumes people always have perfect information Ignores inflation Does not consider government policies Overestimates role of money supply

5. The Solow Growth Model emphasizes the role of:

Technological progress as a driver of long-term growth Government spending Monetary policy Fiscal deficits

6. Which monetary policy tool directly affects bank reserves?

Open Market Operations Interest rate targeting Fiscal stimulus Exchange rate policy

7. Which concept explains why countries specialize based on comparative advantage?

Opportunity cost Absolute advantage Trade barriers Protectionism

8. What does the term "secular stagnation" refer to?

Prolonged period of low economic growth and low interest rates Rapid inflation Boom in technological innovation High unemployment due to automation

9. Numerical: Calculate GDP using expenditure approach if Consumption = 8000, Investment = 3000, Government Spending = 2500, Exports = 1800, and Imports = 1500.

10800 11800 11100 11500

10. Numerical: A product’s price rises from 200 to 250 and demand falls from 1000 to 900 units. Calculate price elasticity of demand using midpoint method (rounded to 2 decimals).

0.38 0.44 0.52 0.47

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GP Sir

GP Sir is a Development Economist and a Banking Professional. He holds M.A. degrees in Economics, Political Science, Rural Development, a B.Ed., and is an MPhil scholar in Economics. He writes to connect economics with people’s lives.

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Economics Quiz - Set 14 (Advanced)

1. Which of the following best describes the “Natural Rate of Unemployment”?

2. Which theory suggests that fiscal policy has limited effect on output because of crowding out?

3. In the IS-LM model, what effect does an increase in government spending have?

4. What is the main criticism of Rational Expectations Theory?

5. The Solow Growth Model emphasizes the role of:

6. Which monetary policy tool directly affects bank reserves?

7. Which concept explains why countries specialize based on comparative advantage?

8. What does the term "secular stagnation" refer to?

9. Numerical: Calculate GDP using expenditure approach if Consumption = 8000, Investment = 3000, Government Spending = 2500, Exports = 1800, and Imports = 1500.

10. Numerical: A product’s price rises from 200 to 250 and demand falls from 1000 to 900 units. Calculate price elasticity of demand using midpoint method (rounded to 2 decimals).

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