Macroeconomics Unit 2 Quiz

What are the three goals of every economy?

• To measure growth, reduce unemployment, and keep prices stable

• To measure the health of the economy, fix the economy, and promote international trade

• To measure GDP, calculate inflation, and implement fiscal and monetary policy

• To measure the health of the economy, reduce unemployment, and promote international trade

What is GDP?

• The dollar value of all final goods produced in a country's border in a given year

• The dollar value of all goods and services produced in a country's border in a given year

• The dollar value of all intermediate goods produced in a country's border in a given year

• The dollar value of all goods and services consumed in a country's border in a given year

Which approach is the most important way to measure GDP?

• Expenditures approach

• Income approach

• Value-added approach

• All approaches are equally important

What is the equation for calculating GDP using the expenditures approach?

• C + I + G + Xn

• Wages + Rent + Interest + Profit

• Value added at each stage of production

• Exports - Imports

Which of the following is not included in GDP?

• Intermediate goods

• Non-production transactions

• Use goods

• Illegal transactions

What is the circular flow model?

• A model that shows the flow of goods and services in an economy

• A model that shows the flow of money in an economy

• A model that shows the flow of resources in an economy

• A model that shows the flow of income in an economy

What is the labor force participation rate?

• The percentage of the total population that is employed

• The percentage of the labor force that is unemployed

• The percentage of the total population that is in the labor force

• The percentage of the labor force that is not in the labor force

Who is considered frictionally unemployed?

• People who are between jobs

• People who do not have the right skills

• People who are unemployed due to a recession

• People who have given up looking for work

What is the natural rate of unemployment?

• The rate of unemployment during a recession

• The rate of unemployment when the economy is at full employment

• The rate of unemployment due to people between jobs

• The rate of unemployment due to people not having the right skills

Who is not counted as unemployed?

• Discouraged workers

• Part-time workers

• People who have given up looking for work

• People who want more hours but are part-time