Macroeconomics Quiz

Explain how the expenditure approach is used to calculate GDP and provide an example calculation using hypothetical data.

• The expenditure approach sums up all incomes earned in the economy.

• The expenditure approach sums up all spending on final goods and services.

• The expenditure approach subtracts imports from exports.

• The expenditure approach adds up the value of all intermediate goods.

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DOK Level 4: Extended Thinking

Analyze the impact of cyclical unemployment on the economy during a recession. Provide a detailed explanation and suggest potential policy responses.

• Cyclical unemployment has no impact on the economy.

• Cyclical unemployment increases during a recession, leading to lower consumer spending and further economic decline.

• Cyclical unemployment decreases during a recession, leading to higher consumer spending.

• Cyclical unemployment remains constant during a recession.

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DOK Level 4: Extended Thinking

Evaluate the effects of demand-pull inflation on different sectors of the economy. Provide examples to support your analysis.

• Demand-pull inflation only affects the agricultural sector.

• Demand-pull inflation leads to higher prices across various sectors, including consumer goods and services.

• Demand-pull inflation results in lower prices for all goods and services.

• Demand-pull inflation has no effect on the economy.

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DOK Level 4: Extended Thinking

Discuss the role of government spending as a fiscal policy tool during an economic downturn. Provide examples of how it can be used to stimulate economic growth.

• Government spending has no role in fiscal policy.

• Government spending can be increased to stimulate demand and create jobs during an economic downturn.

• Government spending should be decreased during an economic downturn.

• Government spending only affects the private sector.

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DOK Level 4: Extended Thinking

Analyze the effectiveness of open market operations as a monetary policy instrument in controlling inflation. Provide a detailed explanation and examples.

• Open market operations have no effect on inflation.

• Open market operations can be used to control inflation by buying or selling government securities to influence the money supply.

• Open market operations only affect interest rates, not inflation.

• Open market operations are used to control unemployment, not inflation.

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DOK Level 4: Extended Thinking

Evaluate the impact of tariffs on international trade and domestic industries. Provide examples to support your analysis.

• Tariffs have no impact on international trade.

• Tariffs can protect domestic industries by making imported goods more expensive, but they can also lead to trade wars and higher prices for consumers.

• Tariffs only benefit foreign industries.

• Tariffs reduce the prices of imported goods.

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DOK Level 4: Extended Thinking

Explain the income approach to GDP calculation and provide an example using hypothetical data.

• The income approach sums up all spending on final goods and services.

• The income approach sums up all incomes earned in the economy, including wages, rents, interest, and profits.

• The income approach subtracts imports from exports.

• The income approach adds up the value of all intermediate goods.

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DOK Level 4: Extended Thinking

Discuss the structural unemployment and its long-term effects on the economy. Provide examples and suggest policy measures to address it.

• Structural unemployment is temporary and has no long-term effects.

• Structural unemployment occurs when there is a mismatch between workers' skills and job requirements, leading to long-term unemployment and economic inefficiency.

• Structural unemployment decreases during economic booms.

• Structural unemployment is caused by seasonal changes in employment.

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DOK Level 4: Extended Thinking

Analyze the causes and effects of cost-push inflation. Provide examples to illustrate your points.

• Cost-push inflation is caused by an increase in demand for goods and services.

• Cost-push inflation occurs when production costs rise, leading to higher prices for goods and services.

• Cost-push inflation results in lower production costs.

• Cost-push inflation has no effect on the economy.

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DOK Level 4: Extended Thinking

Evaluate the impact of tax cuts as a fiscal policy tool on economic growth. Provide examples to support your analysis.

• Tax cuts have no impact on economic growth.

• Tax cuts can stimulate economic growth by increasing disposable income and encouraging consumer spending and investment.

• Tax cuts reduce government revenue without any economic benefits.

• Tax cuts only benefit the wealthy.

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DOK Level 4: Extended Thinking