{ "title": "Advanced Economics O/X", "description": "Core principles of micro and macro economics", "languageCode": "en", "cards": [ { "type": "ox", "prompt": "According to the law of demand, all else equal, when the price of a good rises its quantity demanded tends to fall.", "answer": true, "explanation": "The law of demand states that higher prices generally reduce the quantity demanded." }, { "type": "ox", "prompt": "Inflation is a general and sustained increase in prices that reduces the purchasing power of money.", "answer": true, "explanation": "Inflation erodes purchasing power as the same money buys fewer goods over time." }, { "type": "ox", "prompt": "Opportunity cost is the combined value of every alternative given up, not just the next-best one.", "answer": false, "explanation": "Opportunity cost is the value of the single next-best alternative forgone, not the sum of all alternatives." }, { "type": "ox", "prompt": "Raising the central bank's key interest rate generally tends to cool borrowing, spending, and investment.", "answer": true, "explanation": "Higher rates raise borrowing costs, which tends to slow spending and investment." }, { "type": "ox", "prompt": "GDP measures the market value of final goods and services produced within a country over a period.", "answer": true, "explanation": "GDP sums the market value of final output produced within a nation's borders in a period." }, { "type": "ox", "prompt": "In a monopoly, many firms compete so that no single firm can influence the price.", "answer": false, "explanation": "A monopoly has a single dominant supplier that can influence price; many-firm competition is the opposite." }, { "type": "ox", "prompt": "Supply and demand determine the equilibrium price where quantity supplied equals quantity demanded.", "answer": true, "explanation": "At equilibrium the quantity supplied equals the quantity demanded, setting the market price." }, { "type": "ox", "prompt": "Deflation is a sustained fall in the general price level.", "answer": true, "explanation": "Deflation is a sustained decrease in prices, which can discourage spending and deepen slumps." }, { "type": "choice", "prompt": "What policy tool does a central bank use to manage inflation by adjusting interest rates and money supply?", "choices": [ "Monetary policy", "Fiscal policy", "Trade policy", "Industrial policy" ], "answer": 1, "explanation": "Monetary policy is run by a central bank to manage money supply, interest rates, and inflation." }, { "type": "choice", "prompt": "Which term describes goods that tend to be bought less as consumer income rises?", "choices": [ "Inferior goods", "Luxury goods", "Normal goods", "Public goods" ], "answer": 1, "explanation": "Demand for inferior goods falls as income rises, unlike normal or luxury goods." }, { "type": "text", "prompt": "What is the government's use of taxation and spending to influence the economy called? (two words)", "answers": [ "fiscal policy" ], "explanation": "Fiscal policy uses government taxing and spending to influence aggregate demand and the economy." }, { "type": "text", "prompt": "What term describes a general, sustained rise in prices that reduces money's value?", "answers": [ "inflation" ], "explanation": "Inflation is a sustained increase in the general price level that lowers purchasing power." }, { "type": "ox", "prompt": "According to comparative advantage, countries gain from trade by specializing in goods they can produce at a lower opportunity cost.", "answer": true, "explanation": "Comparative advantage says trade benefits both parties when each specializes where its opportunity cost is lowest." }, { "type": "ox", "prompt": "A price ceiling set below the equilibrium price typically creates a surplus of the good.", "answer": false, "explanation": "A binding price ceiling creates a shortage: at the artificially low price, quantity demanded exceeds quantity supplied." }, { "type": "choice", "prompt": "Which measure tracks the average change in prices of a fixed basket of consumer goods and services?", "choices": [ "GDP deflator", "Producer Price Index", "Consumer Price Index", "Gini coefficient" ], "answer": 3, "explanation": "The Consumer Price Index (CPI) measures the average price change of a typical basket of consumer goods and services." }, { "type": "ox", "prompt": "Demand is called elastic when quantity demanded responds strongly to a change in price.", "answer": true, "explanation": "Price elasticity measures responsiveness; elastic demand means a small price change causes a large change in quantity demanded." }, { "type": "ox", "prompt": "Public goods, such as national defense, are excludable and rival in consumption.", "answer": false, "explanation": "Public goods are non-excludable and non-rival: no one can be barred from them, and one person's use does not reduce another's." }, { "type": "text", "prompt": "What term describes how easily an asset can be converted into cash without losing value?", "answers": [ "liquidity", "asset liquidity" ], "explanation": "Liquidity is the ease with which an asset can be turned into cash; cash itself is the most liquid asset." }, { "type": "ox", "prompt": "Nominal GDP is measured at current prices, while real GDP adjusts for inflation.", "answer": true, "explanation": "Real GDP removes the effect of price changes, so it reflects changes in actual output rather than inflation." }, { "type": "ox", "prompt": "In a progressive tax system, everyone pays the same percentage of their income in tax.", "answer": false, "explanation": "A progressive tax charges higher rates on higher incomes; a flat (proportional) tax applies the same rate to everyone." }, { "type": "choice", "prompt": "In which market structure do many sellers offer identical products, so no single seller can influence the price?", "choices": [ "Monopoly", "Perfect competition", "Oligopoly", "Monopolistic competition" ], "answer": 2, "explanation": "Perfect competition features many price-taking firms selling identical products with free market entry and exit." }, { "type": "ox", "prompt": "Marginal cost is the additional cost of producing one more unit of output.", "answer": true, "explanation": "Marginal cost measures the extra cost of one additional unit and guides a firm's optimal output decision." }, { "type": "ox", "prompt": "Stagflation refers to a period of high economic growth combined with low inflation.", "answer": false, "explanation": "Stagflation is the opposite: stagnant growth and high unemployment occurring together with high inflation, as in the 1970s." }, { "type": "text", "prompt": "What is the rate at which one currency can be traded for another called? (two words)", "answers": [ "exchange rate", "the exchange rate", "currency exchange rate", "foreign exchange rate" ], "explanation": "The exchange rate is the price of one currency in terms of another and shifts with supply and demand in currency markets." }, { "type": "ox", "prompt": "A negative externality occurs when a transaction imposes costs on third parties, as with pollution.", "answer": true, "explanation": "Externalities are costs or benefits that fall on outsiders; pollution is the classic negative externality." }, { "type": "ox", "prompt": "When a country's currency depreciates, its exports generally become more expensive for foreign buyers.", "answer": false, "explanation": "Depreciation makes exports cheaper for foreigners and imports more expensive at home, which tends to boost export demand." }, { "type": "choice", "prompt": "Which economist wrote 'The Wealth of Nations' (1776) and described the 'invisible hand' of markets?", "choices": [ "John Maynard Keynes", "Karl Marx", "David Ricardo", "Adam Smith" ], "answer": 4, "explanation": "Adam Smith's 'The Wealth of Nations' founded classical economics and used the invisible hand to describe self-regulating markets." }, { "type": "ox", "prompt": "Diminishing marginal utility means each additional unit of a good tends to give less extra satisfaction than the one before.", "answer": true, "explanation": "As consumption increases, the added satisfaction from each extra unit typically falls — the law of diminishing marginal utility." }, { "type": "ox", "prompt": "The unemployment rate counts everyone without a job, including people who are not looking for work.", "answer": false, "explanation": "The unemployment rate only counts jobless people actively seeking work; those not searching are outside the labor force." }, { "type": "text", "prompt": "What is a government payment that lowers producers' costs to encourage the output of a good called?", "answers": [ "subsidy", "a subsidy", "subsidies", "government subsidy" ], "explanation": "A subsidy is a government payment or tax break that lowers production costs to encourage the supply of a good or service." }, { "type": "ox", "prompt": "An oligopoly is a market dominated by a small number of large firms.", "answer": true, "explanation": "In an oligopoly a few large firms dominate, so each firm's decisions strongly affect its rivals." }, { "type": "ox", "prompt": "A budget deficit occurs when a government's revenue exceeds its spending.", "answer": false, "explanation": "A deficit means spending exceeds revenue; when revenue exceeds spending, the government runs a surplus." }, { "type": "choice", "prompt": "Which term is commonly defined informally as two consecutive quarters of falling real GDP?", "choices": [ "Depression", "Hyperinflation", "Recession", "Stagnation" ], "answer": 3, "explanation": "A recession is a broad economic downturn, often informally identified as two straight quarters of declining real GDP." }, { "type": "ox", "prompt": "Rational decision-making should ignore sunk costs, since they cannot be recovered.", "answer": true, "explanation": "Sunk costs are already spent and unrecoverable, so rational choices should weigh only future costs and benefits." }, { "type": "ox", "prompt": "According to the law of supply, producers generally offer less of a good for sale as its price rises.", "answer": false, "explanation": "The law of supply says the opposite: higher prices make production more profitable, so quantity supplied tends to rise." }, { "type": "text", "prompt": "What is the strategy of spreading investments across different assets to reduce risk called?", "answers": [ "diversification", "portfolio diversification", "diversifying", "diversify" ], "explanation": "Diversification spreads money across varied assets so that losses in one holding are offset by others, lowering overall risk." } ] }