BPP Economics 2

Question 1

What is the role of a central bank in the United States?

Accepted Answer

Manage monetary policy and banking system

Answer

Manufacture currency

Answer

Regulate state governments

Answer

Collect income taxes

Question 2

What is an example of a variable cost in a business?

Accepted Answer

Raw materials used in production

Answer

Rent on a building

Answer

Annual insurance premium

Answer

Manager's annual salary

Question 3

What does 'trade deficit' mean?

Accepted Answer

A country imports more than it exports

Answer

A country exports more than it imports

Answer

A country has balanced trade

Answer

A country bans international trade

Question 4

What is opportunity cost?

Accepted Answer

The value of the next best alternative forgone

Answer

The cost of raw materials

Answer

The total cost of production

Answer

The tax on business profits

Question 5

Which market structure has only one seller controlling the entire market?

Accepted Answer

Monopoly

Answer

Oligopoly

Answer

Perfect competition

Answer

Duopoly

Question 6

What is the purpose of taxation in an economy?

Accepted Answer

To fund government services and redistribute income

Answer

To discourage all business activity

Answer

To increase inflation deliberately

Answer

To eliminate international trade