Macroeconomics Quiz

What is Macroeconomics the study of?

• The study of individual markets and industries

• The study of an entire nation such as unemployment rates, inflation, GDP, business cycle, etc.

• The study of consumer spending habits

• The study of international trade only

What does the Gross Domestic Product (GDP) represent?

• The total dollar value of all final goods and services made in a nation in a year

• The total dollar value of a nation's exports

• The total dollar value of a nation's imports

• The total dollar value of illegal sales and financial transactions

What is NOT included in the GDP?

• Consumer Spending

• Business Investments

• Illegal sales, secondhand sales, outsourced products, intermediate goods, financial transactions

• Government Spending

What is the formula for calculating GDP?

• Consumer Spending + Business Investments + Exports

• Consumer Spending + Business Investments + Gov't Spending

• Consumer Spending + Business Investments + Gov't Spending + (Exports - Imports)

• Consumer Spending + Business Investments + Gov't Spending + Imports

What type of unemployment is associated with a lack of demand, lay-offs, or a downturn of the business cycle?

• Frictional Unemployment

• Structural Unemployment

• Cyclical Unemployment

• Seasonal Unemployment

Full Employment is considered by economists to be a situation where the unemployment rate is between:

• 0-2%

• 4-6%

• 7-9%

• 10-12%

What happens to prices and the value of money during inflation?

• Prices decrease, and the value of money increases

• Prices increase, and the value of money decreases

• Prices and the value of money both increase

• Prices and the value of money both decrease

What does the Consumer Price Index use to measure the inflation rate?

• A specific list of luxury items

• Changes in GDP

• A specific list of household items (Market Basket)

• The unemployment rate

During a recession, what happens to GDP and unemployment?

• GDP increases, unemployment decreases

• GDP decreases, unemployment increases

• GDP and unemployment both increase

• GDP and unemployment both decrease

What is indicated by an expansion in economic terms?

• GDP decreases, unemployment increases

• GDP and unemployment both decrease

• GDP increases, unemployment decreases

• GDP and unemployment both increase