BGS, BSGS Bachelor of General Studies Economics and Business 1

Question 1

What term describes the total market value of all goods and services produced in a country in one year?

Accepted Answer

Gross Domestic Product

Answer

Gross Domestic Product (GDP) measures a nation's total economic output within its borders over a given period.

Question 2

Which economic principle states that as more units of a good are consumed, the additional satisfaction from each unit decreases?

Accepted Answer

Law of Diminishing Marginal Utility

Answer

The Law of Diminishing Marginal Utility holds that each additional unit consumed adds less satisfaction than the previous one.

Question 3

What type of market structure is characterized by one seller controlling the entire supply of a product?

Accepted Answer

Monopoly

Answer

A monopoly exists when a single firm is the sole producer of a good with no close substitutes.

Question 4

In the US, which federal agency is primarily responsible for conducting monetary policy?

Accepted Answer

Federal Reserve

Answer

The Federal Reserve (the Fed) sets US monetary policy by controlling interest rates and the money supply.

Question 5

What does the term 'inflation' refer to in economics?

Accepted Answer

A general rise in the price level over time

Answer

Inflation is the sustained increase in the general price level of goods and services, reducing purchasing power.

BGS, BSGS Bachelor of General Studies Practice Test