EOC EOC Economics 2

Question 1

What is a 'monopoly' in a market economy?

Accepted Answer

A market dominated by one seller with no close substitutes

Answer

A market with many sellers

Answer

A government-owned business

Answer

A cooperative business model

Question 2

Which of the following best describes 'fiscal policy'?

Accepted Answer

Government use of taxation and spending to influence the economy

Answer

The central bank's control of the money supply

Answer

Private sector investment strategies

Answer

Regulations on international trade

Question 3

What happens to a supply curve when the cost of production increases?

Accepted Answer

It shifts to the left

Answer

It shifts to the right

Answer

It becomes horizontal

Answer

It remains unchanged

Question 4

What is the Federal Reserve's primary tool for controlling inflation?

Accepted Answer

Setting interest rates

Answer

Adjusting tax rates

Answer

Changing government spending

Answer

Regulating stock markets

Question 5

Which economic term describes a situation where resources are used in the most efficient way possible?

Accepted Answer

Productive efficiency

Answer

Market failure

Answer

Scarcity

Answer

Diminishing returns

Question 6

What is the primary purpose of a price ceiling set below the equilibrium price?

Accepted Answer

To prevent prices from rising too high

Answer

To increase supply

Answer

To eliminate surpluses

Answer

To encourage saving