Economic Growth & Unemployment

Economic growth measures the

• a) Growth of productivity

• b) Increase in nominal income

• c) Increase in national output

• d) None of the above

Answer explanation

Economic growth is primarily measured by the increase in national output, which reflects the total value of goods and services produced. Therefore, the correct answer is c) Increase in national output.

Type of unemployment that occurs as a result of harvest schedules, or when industries make seasonal shifts in their production schedules.

• Seasonal Unemployment

• Structural Unemployment

• Frictional Unemployment

• Cyclical Unemployment

Answer explanation

Seasonal unemployment occurs due to harvest schedules or seasonal production shifts, making it the correct choice. It specifically relates to jobs that are available only during certain times of the year.

Type of unemployment that occurs when workers skills do not match those needed for the jobs available.

• Seasonal Unemployment

• Structural Unemployment

• Frictional Unemployment

• Cyclical Unemployment

Answer explanation

Structural unemployment occurs when there is a mismatch between the skills of workers and the skills needed for available jobs, making it the correct choice for this type of unemployment.

Unemployment that rises during economic downturns and falls when the economy improves.

• Seasonal Unemployment

• Structural Unemployment

• Frictional Unemployment

• Cyclical Unemployment

Answer explanation

Cyclical Unemployment occurs due to economic downturns, increasing when the economy is weak and decreasing as it improves. This distinguishes it from seasonal, structural, and frictional unemployment, which have different causes.

A period of macroeconomic expansion or growth, followed by a period of contraction, or decline.

• Business Cycle

• Circular Flow

• Equilibrium

• GDP

Answer explanation

The term 'Business Cycle' refers to the fluctuations in economic activity, characterized by periods of expansion followed by contraction. This definition aligns perfectly with the question's description.

The rate of growth of an economy mainly depends upon

• a) The rate of growth of the labour force

• b)The proportion of national income saved and invested

• c) The rate of technological improvements

• d) All of the above

Answer explanation

The growth of an economy is influenced by multiple factors: the growth of the labor force, the savings and investment rate, and technological improvements. Therefore, the correct answer is d) All of the above.

The total value of all final goods and services produced in a country in a given year.

• Gross Domestic Product

• Consumer Price Index

• Inflation

• Unemployment

Answer explanation

The total value of all final goods and services produced in a country in a given year is defined as Gross Domestic Product (GDP). It measures economic activity and is a key indicator of a country's economic health.

Economic growth can be seen by an outward shift of

• a)     The Production Possibility Frontier

• b)     The Gross Domestic Barrier

• c)     The Marginal Consumption Frontier

• d)     The Minimum Efficient Scale

Answer explanation

Economic growth is represented by an outward shift of the Production Possibility Frontier (PPF), indicating an increase in an economy's capacity to produce goods and services.

To boost economic growth the government is most likely to

• a)     Increase interest rates

• b)     Increase taxation rates

• c)     Provide incentives to invest

• d)     Provide incentives to save

Answer explanation

To boost economic growth, the government is most likely to provide incentives to invest, as this encourages businesses to expand and create jobs, leading to increased economic activity.

In an economy, economic growth always occurs when:

• there is more spending on goods and services between one year and the next.

• there is more production of goods and services between one year and the next.

• there are more resources available between one year and the next.

• business activity is steady between one year and the next.

Answer explanation

Economic growth occurs when there is more production of goods and services, as this indicates an increase in the economy's output and capacity. More spending or resources alone do not guarantee growth without increased production.