Macroeconomics Chapter 5 - Macroeconomics problem

Choose the CORRECT definition for business cycle

• The periods of business during its increasing profit rate

• Composed periods of good trades with rising prosperity and low unemployment, also bad trades with falling prosperity and high unemployment

• Composed periods of bad trades with falling prosperity and high unemployment

• Periods where businesses starts selling their product

Choose the CORRECT answer for four (4) phases of business cycle.

• Expansion, Profits, Decline, Bankruptcy

• Peak, Profit, Decline, Bankruptcy

• Peak, Recession, Through, Recovery

• Peak, Recession, Expansion, Through

The followings are true for three (3) types of unemployment, EXCEPT

• Frictional

• Processional

• Cyclical

• Structural

Which situation suits best for frictional unemployment?

• An employee resigns to find better job with higher pay and good environment

• An employee is laid off due to economic structure changes in the country

• An individual left its career to become full time homeless

• An individual is given break during employment

What are possible NEGATIVE EFFECTS society may face due to unemployment?

• Social problems : population lose sources of income, ends up become thefts and distrupts social peace

• Lower standards of living : products consume by population may be less than what is during full employment

• Relationship problems ; Couples lose feelings to each other due to physical appearance

• Natural disasters ; flood occurs, earthquakes

What is the TRUE definition of inflation?

• Inflation : The continuous increase in general level of price which then reduces the population income & purchasing power of money

• Inflation : The process of inflating baloons to celebrate economic prosperity of the country

• Inflation : A term used to describe the increase in the number of items available in grocery store to provide more options for consumers.

Name the index used to measure the rate of inflation (without 'the' and comma)

Which of the following situation refers to HYPERINFLATION?

• Price increases in a controlled way and is less than 10% per annum whereas it's not a serious economic problem

• Prices increases at a very high rate (1000% per ammum) and paper money almost becomes worthless

• The spending power and value of money decreases continuously & it is not caused by the rise in prices but demand blockade & government involvement

Choose the CORRECT answer for types of inflation.

• Cost-push inflation, Demand-pull inflation & Imported inflation

• Aggregate inflation, safe-cost inflation & uncontrollable inflation.

• Marriage inflation, Education inflation & Mobile inflation.

There are individuals who will gain benefits from inflation, name one type of the individuals with elaboration.