GED Economics Practice
Economics is about 15 percent of the GED Social Studies test. The concepts are few and the questions are consistent, which makes this a reliable place to pick up points.
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If demand for a product rises while supply stays the same, the price will most likely
Markets, supply, and demand
When demand rises and supply holds steady, price rises. When supply rises and demand holds steady, price falls. Most GED market questions are a variation on those two sentences, dressed in a scenario about a shortage, a bumper crop, or a new competitor.
Scarcity underlies the whole subject: resources are limited, so every choice has an opportunity cost — the value of the next best alternative you gave up, not just the money you spent.
Measuring the economy
Gross domestic product totals the value of final goods and services produced within a country. Inflation is a sustained rise in the general price level, which reduces what a dollar buys. Unemployment measures people who are actively seeking work but have not found it.
Questions often pair two indicators on a chart and ask what the combination suggests, so practice reading trends rather than memorizing definitions alone.
Fiscal versus monetary policy
Fiscal policy is government taxing and spending, decided by Congress and the president. Monetary policy is control of the money supply and interest rates, handled by the Federal Reserve. Confusing the two is the most common error on this content area.
A tax cut or a spending package is fiscal. Raising or lowering interest rates is monetary. Expect at least one question that hinges on that distinction.
Frequently asked questions
- How much economics is on the GED?
- About 15 percent of the Social Studies test.
- What is the difference between fiscal and monetary policy?
- Fiscal policy is government taxing and spending. Monetary policy is the central bank's control of interest rates and the money supply.