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 monopoly exists when a single company or entity is the sole seller of a product or service in a market, giving it significant pricing power.

Question 2

Which of the following best describes 'fiscal policy'?

Accepted Answer

Government use of taxation and spending to influence the economy

Answer

Fiscal policy refers to government decisions about taxation and public spending to influence economic conditions such as growth and employment.

Question 3

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

Accepted Answer

It shifts to the left

Answer

When production costs increase, suppliers are less willing to produce at every price level, shifting the supply curve to the left and reducing supply.

Question 4

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

Accepted Answer

Setting interest rates

Answer

The Federal Reserve controls inflation primarily by raising or lowering the federal funds rate, which influences borrowing costs throughout the economy.

Question 5

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

Accepted Answer

Productive efficiency

Answer

Productive efficiency occurs when a good or service is produced at the lowest possible cost, meaning resources are not wasted.

EOC - End-of-Course Test Practice Test

EOC - End-of-Course Test Practice Test

EOC EOC Economics 2