Macroeconomics Review

Choice is the basis of economics. The reason choices must be made is that resources are ______-.

Economists call the value of what you give up when you make a particular choice an _________.

This graph shows the trade-offs facing an economy that produces only two goods.

• Production possibilities curve

• Business cycle

• AD/AS graph

• Phillips Curve

Point ___ is impossible with existing resources and technology.

• A

• B

• C

• D

• X

By engaging in the trade of goods and services with one another, the members of an economy can all be better off. This is due to...

• scarcity

• specialization

• allocative efficiency

• entrepreneurship

Natasha and Bruce can produce Thing A and Thing B. Assume Natasha has a comparative advantage in producing Thing A. Who has a comparative advantage in producing Thing B?

• Natasha

• Bruce

• Not enough information to tell

• Tony

What does GDP stand for?

Which of the following is included in the calculation of GDP?

• taxes

• intermediate goods

• used goods

• domestically produced capital goods

Assume a country has a population of 1,000. If 400 people are employed and 100 people are unemployed, what is the country's unemployment rate?

• 50%

• 40%

• 25%

• 20%

• 10%

A worker who is unemployed due to fluctuations in the business cycle is considered...

• frictionally unemployed

• structurally unemployed

• cyclically unemployed

• a discouraged worker