Economics Part 4 Review Multiple Choice

Measures the stability of prices

• CPI

• GDP

• SOP

• CPS

Measures economic growth

• CPI

• GDP

• EGI

• GRI

What is not true of GDP?

• when it rises it indicates economic growth

• it includes goods produced outside a country's borders

• it is the value of finished goods produced within a country

• when it falls it could indicate recession

The labor force includes all people 16 or over whether they are looking for a job or not.

• true

• false

What would be the best unemployment rate?

• 8%

• 9%

• 4%

• 5%

In order to compute CPI you need to have a base year.

• true

• false

Inflation increases the value of the dollar.

• true

• false

Which part of the business cycle has the highest unemployment rate?

• Prosperity

• Recession

• Depression

• Recovery

Money of the United States is ________ money.

• fiat

• commodity

Money that is worth something because the government says it is and people have faith in it.

• commodity money

• fiat money