Economy & You: Checkpoint 3

Covers trade and tariffs, government spending, and the stock market versus the economy.

Five questions on trade policy, government spending, and why the stock market and the economy aren’t the same thing.

Question 1 of 5 A tariff is a tax that is typically paid directly by:

The foreign government The domestic company importing the good The foreign factory producing the good No one - it's symbolic

Question 2 of 5 'Comparative advantage' explains why countries benefit from:

Producing everything domestically Specializing in what they produce efficiently and trading for the rest Banning all imports Avoiding trade with other countries entirely

Question 3 of 5 A government deficit refers to:

The total accumulated debt over many years Spending more in a given year than is collected in revenue that year A drop in GDP A rise in interest rates

Question 4 of 5 Why can the stock market rise even during a weak economy?

Stock prices are illegal to report during recessions Stock prices reflect investor expectations about the future, not just current conditions GDP and stock prices are always identical It's a reporting error

Question 5 of 5 GDP and unemployment figures, compared to stock prices, are generally:

More forward-looking Backward-looking, describing a period that has already passed Updated every second Not related to the economy at all

← Back to The Stock Market vs the Economy: Not the Same Thing Next lesson → Global Events and Your Wallet

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