Unit 3: The Government and the Economy

A rise in prices due to an increase in the money supply in the economy is called:

• Inflation

• Deflation

• Monetary Policy

• CPI

A decrease in prices

• Deflation

• Inflation

• Monetary Policy

• Opportunity Cost

During a period of Expansionary Monetary Policy, which of the following occurs:

• The Fed Lowers Interest Rates and the flow of money into the economy increases

• The Fed Raises Interest Rates and the flow of money into the economy increases

• The Fed Raises Interest Rates and the flow of money into the economy decreases

• The Fed Lowers Interest Rates and the flow of money into the economy decreases

During a period of Contractionary Monetary Policy, which of the following occurs:

• The Fed Lowers Interest Rates and the flow of money into the economy increases

• The Fed Raises Interest Rates and the flow of money into the economy increases

• The Fed Raises Interest Rates and the flow of money into the economy decreases

• The Fed Lowers Interest Rates and the flow of money into the economy decreases

Unemployment that sees individuals purposefully leave the labor market - either because of fit, lifestyle or need to help a friend or relative - is called which of the following?

• Seasonal Unemployment

• Cyclical Unemployment

• Functional Unemployment

• Structural Unemployment

Unemployment that sees individuals lose their jobs due to issues with education, outsourcing, or a lack of appropriate skills due to shifts in technology and demand is called which of the following?

• Seasonal Unemployment

• Cyclical Unemployment

• Functional Unemployment

• Structural Unemployment

Unemployment that sees individuals employed during specific periods of the year is called which of the following?

• Seasonal Unemployment

• Cyclical Unemployment

• Functional Unemployment

• Structural Unemployment

Unemployment related to swings in economic activity is called which of the following?

• Seasonal Unemployment

• Cyclical Unemployment

• Functional Unemployment

• Structural Unemployment

The Fed using Monetary Policy to influence the flow of money supply in the economy is related to which of the following functions of government in the economy?

• Provide Public Goods and Services

• Redistribute Wealth

• Promote Economic Stability

• Provide a Social and Legal Framework

The government providing social services that the market economy otherwise would not is related to which of the following functions of government in the economy?

• Provide Public Goods and Services

• Redistribute Wealth

• Promote Economic Stability

• Provide a Social and Legal Framework