Econ Final Practice

Which of the following is not one of the three major goals of the U.S. for a healthy economy?

• full employment

•  price stability

• economic equity

• economic growth

What happens to the purchasing power of money during inflation?

• It increases

• It remains the same.

• It decreases.

• It decreases initially and then increases.

In the U.S. economy, the total value of goods and services produced per year is measured by

• the gross domestic product.

• the consumer price index.

• the productivity of labor.

• the Dow Jones Average.

When the economy is stable, the target unemployment rate is

• 0 percent

• 0.1 to 3 percent

• 4 to 6 percent

• 5 to 10 percent

The total demand for all goods and services in the economy is called

• relative demand

• quantitative demand

• corporate demand

• aggregate demand

the lowest point in an economic contraction is called

• a peak

• a trough

• a recession

• an expansion

To calculate the CPI, the Bureau of Labor Statistics

• samples the prices of many goods and services across the country

• selects a market basket of commonly purchased consumer items

• selects a base year against which to measure price changes

• all of the above

When the economy is stable, the target inflation rate as measured by percent change in CPI is

• 0 percent

• less than 5%

• less than 3%

• less than deflation

GDP expressed in constant dollars adjusted for inflation is called

• price level

• real GDP

• nominal GDP

• net national product

The CPI measures

• consumer confidence levels

• inflation

• the employment rate

• the unemployment rate