AP Macroeconomics Review Game 1

Inflation:

• Always reduces the cost of living

• Reduces the purchasing power of a pound

If people are made unemployed because of a fall in aggregate demand this is known as:

• Cyclical unemployment

• Frictional unemployment

An increase in costs will

• Shift aggregate demand

• Shift aggregate supply

The Phillips curve shows the relationship between inflation and what?

• Unemployment

• GDP

• Price level

When individuals lose jobs due to a decline in the economy during an economic recession.

• Structural Unemployment

• Cyclical Unemployment

• Frictional Unemployment

• Seasonal Unemployment

Individuals are unemployed due to a lack in skills that modern industries need.

• Cyclical Unemployment

• Frictional Unemployment

• Structural Unemployment

• Seasonal Unemployment

In which type of unemployment workers find it hard to obtain new jobs without retraining, gaining additional education, or relocating??

• cyclical

• frictional

• structural

• all of them

When the economy is experiencing an unemployment rate between 4-5%, an economist would say the economy is

• at full employment

• on the cusp of a recession

• entering into inflation

• at an unnatural rate

Unemployment caused when a man resigns from his job to start looking for a higher paying job.

• Structural
• Seasonal
• Frictional
• Cyclical

Inflation can best be defined as...

• A general increase in prices.

• An increase in prices of key items purchased by consumers.

• The increase in the value of fiat money

• The printing of too much paper money.