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- 1. Multiple Choice
Which of the following would NOT be included in the GDP?
investment spending by a business
consumer spending
government spending
paper/financial transactions
- 2. Multiple Choice
Which of the following is an example of an intermediate good?
the purchase of leather to make shoes
the purchase of a new radio for your car
the purchase of a new car
the purchase of a new lawnmower
- 3. Multiple Choice
The goal of the government and the American people is that GDP...
remains steady.
grows steadily.
shrinks.
fluctuates.
- 4. Multiple Choice
The single best measure of the overall performance of the American economy and our standard of living is...
GNP.
real GDP.
nominal GDP.
misery index.
- 5. Multiple Choice
Nominal GDP is the current dollar value of the nation's output with no adjustment for inflation.
True
False
- 6. Multiple Choice
CPI stands for which of the following?
Consumer Price Index
Consumer Paid Insurance
Consumer Product Insurance
Consumer Product Index
- 7. Multiple Choice
The Consumer Price Index (CPI) measures changes in prices of consumer goods before they reach the retail level.
True
False
- 8. Multiple Choice
A construction worker cannot work because of winter snowstorm. He is...
cyclically unemployed.
structurally unemployed.
seasonally unemployed.
frictionally unemployed.
- 9. Multiple Choice
Frictional unemployment means that the worker's skills do not match the jobs available in the economy. Workers must retrain, and learn new skills.
True
False
- 10. Multiple Choice
Cyclical unemployment occurs when jobs gained and lost in connection with the business cycle (during recession/contraction jobs are lost, during expansion jobs are regained).
True
False
- 11. Multiple Choice
To an economist, full employment is reached when the unemployment rate drops below...
2%.
3%.
5%.
6%.
- 12. Multiple Choice
"Too many dollars chasing too few goods" describes
the need to print more money.
cost-push inflation.
demand-pull inflation.
deflation.
- 13. Multiple Choice
To see how much the actual distribution of income varies from equal distribution, an economist would use...
a Lorenz curve.
Lorenzo's curve.
the poverty threshold.
a Laffer curve.
- 14. Multiple Choice
Stagflation is a combination of inflation and unemployment, and leads to cost-push inflation.
True
False
- 15. Multiple Choice
Rising unemployment and inflation are forms of...
economic growth.
economic stability.
economic instability.
economic inefficiency.
- 16. Multiple Choice
The total population of an economy is 200 million, the labor force is 100 million, and the number of unemployed is 6 million. The unemployment rate is...
3%.
4.5%.
6%.
9%.
- 17. Multiple Choice
The immediate effect of inflation is the...
increased value of money.
greater spending by all income groups.
decline in the purchasing power of the dollar.
the ability to buy more stuff.
- 18. Multiple Choice
In the event of inflation, a retired school teacher with a fixed pension would not be hurt.
True
False
- 19. Multiple Choice
In the event of inflation, a couple that buys a house with a 15 year fixed rate loan would be helped.
True
False
- 20. Multiple Choice
In the event of inflation, an employee in the technology industry that signs a contract with annual COLAs would be helped.
True
False
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