Economics Unit 3 Review

Biff, a lifeguard at the local YMCA, sleeps on his mom’s couch in November without a job. Biff is considered to be:

• Frictionally unemployed

• Seasonally unemployed

• Structurally unemployed

• Cyclically unemployed

Barrett finds himself to be out of a job when Chevrolet starts manufacturing spaceships instead of motor vehicles on their production line. He is among those who would be considered to be:

• Frictionally unemployed

• Seasonally unemployed

• Structurally unemployed

• Cyclically unemployed

During a deep economic recession in January, Santa Claus found himself to be out of a job. He is among those who are also:

• Frictionally unemployed

• Seasonally unemployed

• Structurally unemployed

• Cyclically unemployed

As of July 2016, ____ is an example of a country currently experiencing excessive inflation (rise of price levels).

• United States of America

• Japan

• India

• Venezuela

Using the graph of the business cycle, select the point that would show the economy beginning to recover from a recessionary trend.

• A

• B

• C

• D

An economy can only grow if it can increase its output. Which of the following will grow an economy?

• Workers are better educated.

• Machines are more efficient.

• Businesses increase the amount of money they spend on training workers.

• All of the above will grow the economy because they will increase productivity.

Businesses investing in capital stock (i.e., machines, technology, robots, etc.) will affect the economy in which of the following ways:

• It will increase the economy’s potential output level, thus resulting in an increase in GDP and overall growth of the economy.

• This investment will lead to an overall slowing of the economy, thus pushing the country into a recession.

• There will be no change in the overall growth rate of the economy, because only consumer spending can grow the economy.

• None of the above.

What is a fiscal policy decision a city could make in order to make itself more appealing to companies?

• Increase sales tax.

• Increase the retirement plans for city employees.

• Lower residential property taxes.

• Lower corporate taxes.

All of the following are ways the government receives revenue EXCEPT:

• Income taxes

• Social security taxes

• Defense expenditures

• Medicare taxes

During an economic downturn (recession), the U.S. Congress can try to stimulate the economy through:

• Monetary policy

• Trading policy

• Fiscal policy

• Antitrust policy