Measuring the Economy

Front

Increasing spending and _____ are examples of fiscal policies.

Back

cutting taxes

Front

To keep track of inflation, the government uses the

Back

consumer price index.

Front

The economy grows

Back

in alternating periods of growth and decline.

Front

In response to high unemployment, the government may spend more on goods and services. This is an example of

Back

fiscal policy.

Front

How are stock prices determined?

Back

supply and demand

Front

During which ten-year period did the average cost of items grow the most? 1975–1985, 1965–1975, 1935–1945, 1925–1935

Back

1975–1985

Front

Based on the information about nominal and real prices, which economic measure is best applied to determine real prices? Options: unemployment, store inventory, interest rates, inflation

Back

inflation

Front

Which stage of the business cycle has the highest inflation rate?

Back

Expansion

Front

Which statement explains how an income tax increase would help to serve an economic policy goal? Options: It would increase productivity by reducing inefficiency. It would promote employment by encouraging investment. It would slow price inflation by reducing demand. It would reduce price levels by encouraging competition.

Back

It would slow price inflation by reducing demand.

Front

Which explanation best explains the effects of inflation?

Back

Inflation erodes (take away from) the purchasing power of the dollar.