Managing the Economy
Quiz by Angie Buckingham
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25 questions
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- Q1The Gross Domestic Product isThe market value of all final goods produced in a specified period of time.The market value of all final goods and services produced by a country inside its boundaries in a specified period of time.The market value of all final goods and services produced by a country inside or outside its boundaries in a specified period of time.The value of all intermediate and final goods and services produced in a specified period of time.30s
- Q2Why would an economist use real GDP rather than nominal GDP to measure growth?Nominal GDP applies to only a small number of industries.Nominal GDP applies to only a small number of industries. Real GDP reflects output more accurately than nominal GDP by using constant prices.Real GDP calculates the GDP for a longer period of time.Real GDP uses current prices to measure the year’s output.30s
- Q3What is the formula for calculating GDP?C + I + G - NXC + I - G - NXC - I + G - NXC + I + G + NX30s
- Q4According to the principle of cyclical unemployment, what will occur when the demand for goods and services drops during a recession?The business cycle resumes an upward trend.No frictional unemployment exists.The demand for labor rises.The demand for labor drops.30s
- Q5Sonya dropped out of school and now fails to meet the minimum requirements for her job. What type of unemployment is this?structuralfrictionalseasonalcyclical30s
- Q6Eva lost her job at a major interior design firm during the recession in the 1980s. What type of unemployment is this?seasonalcyclicalstructuralfrictional30s
- Q7Jordan graduated from law school and is interviewing with various law firms. What type of unemployment is this?structuralcyclicalfrictionalseasonal30s
- Q8What kind of unemployment can be lessened when the government pursues policies that reduce the depth and length of contractions and prolong the periods of economic expansion?seasonalstructuralfrictionalcyclical30s
- Q9Ten years ago, a house sold for $54,000. Today the same house is valued at $108,000. What has inflation done to consumers’ purchasing power?increased itstopped itreduced itdoubled it30s
- Q10What is the Consumer Price Index?a measure of prices of housing and rental costs all over the countryan index determined by measuring the price of transportation and energyan index that shows changes in the cost of living over timean index of prices of items used by manufacturers and retailers30s
- Q11If you lived on a fixed income, how would you be affected by inflation?You would benefit because you would have more purchasing power.You would be hit hard because rising inflation would lower your rate of pay.There would be little effect because income is not tied to inflation.You would be financially stressed because your income does not increase when prices go up.30s
- Q12Which of the following would be the most likely to cause cost-push inflation?an increase in the growth of the money supplyan increase in world oil pricesa reduction in federal income tax ratesa decrease in the general level of interest rates30s
- Q13Which of the following would occur during the contraction phase of the business cycle?increasing GDP and decreasing unemploymentincreasing GDP and inflationfalling inflation and falling unemploymentincreasing unemployment and declining GDP30s
- Q14When the economy is working properly, what is acceptable rate of inflation?3 to 4 percent1 to 2 percent6-8 percent4 to 6 percent30s
- Q15A tax in which tax rates rise with increasing income is known as aproportional taxprogressive taxnone of the aboveregressive tax30s