Unit 3: Measuring and Managing

What is an economic indicator?

• A measure of economic performance

• A tool used by the government to control the economy

• A financial institution that regulates the economy

• A type of tax imposed on goods and services

What is Gross Domestic Product (GDP)?

• The total value of all goods and services produced within a country in a given period

• The total value of all imports and exports of a country

• The total value of all investments made by a country

• The total value of all government spending in a country

What is NOT included in GDP?

• Final goods

• Intermediate goods

• Exports

• Government spending

What is the formula for calculating GDP?

• GDP = Consumption - Investment + Government Spending - Net Exports

• GDP = Consumption - Investment + Government Spending + Net Exports

• GDP = Consumption + Investment + Government Spending - Net Exports

• GDP = Consumption + Investment + Government Spending + Net Exports

What is the difference between real GDP and nominal GDP?

• Real GDP is adjusted for inflation, while nominal GDP is not

• Real GDP is measured in current prices, while nominal GDP is adjusted for inflation

• Real GDP is measured in constant prices, while nominal GDP is not adjusted for inflation

• Real GDP includes government spending, while nominal GDP does not

What is the unemployment rate?

• The percentage of people who are working but not earning a living wage

• The percentage of people who are not working and actively looking for a job

• The percentage of people who are not working and not actively looking for a job

• The percentage of people who are working part-time but want to work full-time

What is considered an acceptable range of unemployment rates (the natural rate of unemployment)?

• 2% - 4%

• 4% - 6%

• 8% - 10%

• 6% - 8%

What is inflation?

• An increase in the overall level of production

• An increase in the overall level of prices

• A decrease in the overall level of prices

• A decrease in the overall level of production

What is the Consumer Price Index (CPI)?

• A measure of the average change in wages over time for a market basket of goods and services

• A measure of the average change in unemployment rates over time for a market basket of goods and services

• A measure of the average change in prices over time for a market basket of goods and services

• A measure of the average change in GDP over time for a market basket of goods and services

What is the business cycle?

• The periodic fluctuations in economic activity, measured by changes in GDP, employment, and prices

• The process of starting and running a business

• The cycle of supply and demand in the market

• The cycle of borrowing and lending in the economy