Unit 3: Macroeconomics Test Review

Front

What is the primary focus of macroeconomics?

Back

The behavior and performance of an economy as a whole

Front

Which of the following correctly matches the economic goal with its primary indicator? Options: Economic Growth ---> Unemployment Rate; Price Stability ---> Real GDP; Full/Maximum Employment ---> Consumer Price Index, Economic Growth ---> Consumer Price Index; Price Stability ---> Unemployment Rate; Full/Maximum Employment ---> Real GDP, Economic Growth ---> Real GDP; Price Stability ---> Consumer Price Index; Full/Maximum Employment ---> Unemployment Rate, Economic Growth ---> Real GDP; Price Stability ---> Unemployment Rate; Full/Maximum Employment ---> Consumer Price Index

Back

Economic Growth ---> Real GDP; Price Stability ---> Consumer Price Index; Full/Maximum Employment ---> Unemployment Rate

Front

In the GDP equation GDP = C + I + G + (X-M), what does "I" represent?

Back

Investment

Front

Which of the following would NOT be counted in GDP calculations? A new car produced and sold in the country, A used car sold by a dealership, A haircut provided by a licensed stylist, Construction of a new government building

Back

A used car sold by a dealership

Front

What is the primary difference between nominal GDP and real GDP?

Back

Real GDP accounts for inflation, while nominal GDP does not.

Front

Which of the following best describes inflation?

Back

A general increase in prices and fall in the purchasing value of money

Front

What is NOT considered a potential cause of inflation?

Back

Increased Government Regulations

Front

How is the unemployment rate typically calculated?

Back

Total unemployed / Labor force

Front

Which of the following is NOT included in the official unemployment rate?

• Those actively seeking work
• Those who have been unemployed for less than 15 weeks
• Discouraged workers who have stopped looking for jobs
• Those who are temporarily laid off

Back

Discouraged workers who have stopped looking for jobs

Front

What does the business cycle model illustrate?

Back

How economic activity fluctuates over time