macro revision quizz

In which case is success for the government in achieving the first aim likely to cause problems in achieving the second?

• first aim full employment

  second aim price stability

• first aim high economic growth

  second aim full employment

• first aim price stability

  second aim stable balance of payments

• first aim stable balance of payments

  second aim more even distribution of income

An increase in which economic indicator is usually taken as the measure of a country’s economic growth?

• the balance of payments surplus

• the foreign exchange rate

• the government budget surplus

• the gross domestic product

What is used to measure inflation?

• the consumer prices index (CPI)

• the exchange rate

• the gross domestic product (GDP)

• the index of workers’ wages

The diagram shows the rate of unemployment and the periods of recession in a country between 1978 and 2012.

What can be concluded from the diagram?

• What can be concluded from the diagram?

• Recessions occurred at regular intervals.

• The unemployment rate peaked in a recession period.

• The unemployment rate rose during recession periods.

A country experienced its usual August increase in the rate of unemployment. Unfortunately this was followed by the loss of jobs resulting from the regular downturn in global economic activity.

Which types of unemployment occurred?

• first type of

  unemployment

  (August)

  cyclical

  second type of

  unemployment

  (global downturn) structural

• first type of

  unemployment

  (August)

  frictional

  second type of

  unemployment

  (global downturn) seasonal

• first type of

  unemployment

  (August)

  seasonal

  second type of

  unemployment

  (global downturn) cyclical

• first type of

  unemployment

  (August)

  structural

  second type of

  unemployment

  (global downturn) frictional

When is a recession said to occur?

• Economic growth in the economy falls for at least two consecutive quarters.

• Gross domestic product (GDP) falls for at least two consecutive quarters.

• The current account of the balance of payment is in deficit for at least two consecutive

  quarters.

• The government experiences a budget deficit for at least two consecutive quarters.

Which country is suffering from the worst deflation?

• A

• B

• C

• D

What is the most likely effect of raising the retirement age in a country?

• government spending increases

• net immigration increases

• spending on pensions increases

• working population increases