Principles of Macroeconomics Quiz

What is the book's definition of economics?

• The study of owning a business

• The study of how to allocate scarce resources in the most efficient way

• The study of money

• The study of how to get rich

According to economics, society gives us 4 main resources. Which of the following is NOT one of those resources?

What is the term used to describe a situation in which markets do not produce the optimal amount?

• Economic meltdown

• Market failure

• The effect of the invisible hand

• Equilibrium

In the short run, there is a tradeoff between inflation and

• Taxes

• Productivity

• Unemployment

• Efficiency

According to the book, what is NOT a reason governments should step in to help the economy?

• When people are stealing other people's ideas

• When people are creating positive externalities

• When a company is a price maker

• When people are spending too much money

What is the most important factor that explains differences in living standards?

• The level of unemployment

• Productivity

• Equality

• The quantity of money

Adam Smith's 'invisible hand' refers to

• The ability of government regulation to benefit consumers, even if the consumers are unaware of the regulations

• The ability of free markets to reach desirable outcomes, despite the self-interest of market participants

• The way in which producers or consumers in free markets impose costs on innocent bystanders

• The subtle and often hidden methods that businesses use to profit at consumers' expense

Which country has the highest total GDP as of 2017?

• Germany

• Japan

• U.S.

• China

In order to calculate GDP per capita, you must

• Divide total GDP by the amount of money in a country

• Multiply population by prices in a country

• Multiply GDP by the population

• Divide total GDP by the population

The Phillips curve shows the relationship between

• Income and taxes

• Inflation and prices

• Inflation and unemployment

• Unemployment and income