Economics Quiz

Example Questions From the Test

• 1When household income falls, demand for a particular brand of instant noodles rises, with other factors unchanged. In this setting, the noodles are best described as what type of good?
  • A public good
  • A normal good
  • An inferior good
  • A complementary good
• 2At the current price of a product, buyers want more units than sellers offer. With no price controls, which adjustment would normally move the market toward equilibrium?
  • The price falls, increasing quantity demanded further
  • Demand shifts left automatically until the shortage disappears
  • The price rises, reducing quantity demanded and increasing quantity supplied
  • Supply shifts left because sellers are selling out
• 6If a central bank wants to reduce inflationary pressure by slowing aggregate demand, which action is most directly contractionary?
  • Lowering its policy interest-rate target
  • Raising its policy interest-rate target
  • Purchasing government securities to add reserves
  • Encouraging banks to expand lending through cheaper credit