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- 1. Multiple Choice
Comparing real GDP for 2 consecutive years is useful for determining which economic measurement
equilibrium price
equity
exchange rates
economic growth
- 2. Multiple Choice
If an economy is in a trough on the business cycle
unemployment is high, real GDP is low and inflation is low
unemployment is low, real GDP growth is high and inflation is high
unemployment is low, real GDP growth is low and inflation is high
unemployment is high, real GDP growth is high and inflation is low
- 3. Multiple Choice
Unemployment that occurred during a depression or recession is called
structural unemployment
frictional unemployment
recession unemployment
cyclical unemployment
- 4. Multiple Choice
After much debate in Congress, the House and Senate finally pass a bill calling for a 1 percent tax decrease and a cut in federal funding. This is an example of
fiscal policy
monetary policy
open market operations
tight money policy
- 5. Multiple Choice
The central bank of the United States that sets policies designed to control the money supply is called the
congressional bank
Bank of the United States of America
Federal Reserve
Bank of Governors
- 6. Multiple Choice
When the federal reserve lowers the discount rate,
interest rates rise
interest rates fall as well
bank loan less money
people save more
- 7. Multiple ChoiceWhat is the "full employment" rate of the United States?4-6 percent2-3 percent10 percent8-10 percent
- 8. Multiple ChoiceThe lowest point of output in a recession, before a recovery beginstrade deficitdepressiontroughrecovery
- 9. Multiple ChoiceAll of the following are points on the business cycle EXCEPTPeaksTroughsExpansionGDP
- 10. Multiple ChoiceThe HIGHEST Point in business cyclePeakTroughContractionRecession
- 11. Multiple Choice
Which letter represents the Contractionary (Recession) Phase?ABCD - 12. Multiple ChoiceWhere on the business cycle would you find the highest unemployment?ABCD
- 13. Multiple ChoiceWhat can the government do to give a boost to a slowing economy?raise taxeslower taxesincrease interest rates
- 14. Multiple ChoiceWho is most likely to be hurt by inflation?someone who borrowed moneya retiree on a fixed incomea business ownerthe U.S. government
- 15. Multiple ChoiceWhat is inflation?rise in all pricesrise in most pricesrise in some pricesrise in general prices
- 16. Multiple ChoiceWhat type of unemployment did people experience during the Great Depression?SeasonalStructural/TechnologicalCyclicalFrictional
- 17. Multiple ChoiceA literary editor leaves her job in New York to look for a new job in San Francisco.FrictionalCyclicalStructuralNot counted
- 18. Multiple ChoiceAn unemployed college graduate is looking for his first job.FrictionalCyclicalStructuralNot counted
- 19. Multiple ChoiceSlumping sales lead to the cashier being laid off.FrictionalCyclicalStructuralNot counted
- 20. Multiple ChoiceGross Domestic Product is defined as:the dollar market value of all goods/services produced by a country in a given amount of timethe dollar market value of all final goods/services produced within a country's borders in a given period of timethe dollar market value of all final goods/services produced by a nation's businesses in a given period of timethe dollar market value of any activity in the economy by a business over a period of time
- 21. Multiple ChoiceHigh levels of consumer spending indicates thatunemployment is risingthe economy is healthythe economy is in a recessioninterest rates are unstable
- 22. Multiple ChoiceWhy would adjusting the money supply be expected to increase economic growth during a recession?increasing the money supply would encourage people to save more moneyincreasing the money supply would encourage people to spend more moneyrecession is caused by too much spending, so money must be reduceddecreasing the money supply would encourage people to save more money
- 23. Multiple ChoiceWhat happens to the money supply when the Fed raises reserve requirements?ExpandsContracts
- 24. Multiple ChoiceWhat happens to the money supply when the Fed lowers the discount rate?ExpandsContracts
- 25. Multiple Choice
Which of the following will most likely create an “expansion” to occur in the economy.
cutting taxes
contractionary fiscal policy
cutting government spending
increasing the discount rate
- 26. Multiple Choice
Which of the following will most likely create a “contraction” to occur in the economy.
cutting government spending
expansionary fiscal policy
lowering the discount rate
the Federal Reserve buying bonds
- 27. Multiple Choice
Fiscal policy aims to influence the economic activity through the use of
money supply and interest rate.
exchange rate.
government spending and taxation.
direct and indirect taxation.
- 28. Multiple Choice
When the Federal Reserve Bank is expanding the money supply, it usually means they want the economy to...
Grow
Shrink
- 29. Multiple ChoiceTo implement expansionary fiscal policy, the government is likely tocut both taxes and spendingincrease both taxes and spendingcut taxes and increase spendingincrease taxes and cut spending
- 30. Multiple ChoiceTo implement contractionary fiscal policy, the government is likely tocut both taxes and spendingincrease both taxes and spendingcut taxes and increase spendingincrease taxes and cut spending
- 31. Multiple ChoiceWhat are the 2 basic tools the federal government uses to influence the economyentitlements and spendingentitlements and wagestaxation and spendingtaxation and wages
- 32. Multiple ChoiceWhat type of tax does the tax rate increase as income increasesflat taxprogressive taxproportional taxregressive tax
- 33. Multiple ChoiceThe interest rate the Fed charges other banks is known as theprime ratemortgage rateoperation ratediscount rate
- 34. Multiple ChoiceA plan to increase the amount of money in circulation is calledexpansionary fiscal policyexpansionary monetary policycontractionary monetary policycontractionary fiscal policy
- 35. Multiple ChoiceA plan to reduce the amount of money in circulation is calledexpansionary monetary policyexpansionary fiscal policycontractionary monetary policycontractionary fiscal policy
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