GDP Unemployment and Inflation

The actions the Federal Reserve System takes to influence the level of real GDP and the rate of inflation in the economy.

• Fiscal Policy

• Monetary Policy

• Congressional Policy

• Executive Policy

The use of government spending and revenue collection to influence the economy.

• Monetary Policy

• Fiscal Policy

• Congressional Policy

• Executive Policy

When individuals lose jobs due to a decline in the economy (aggregate demand), often during an economic recession.

• Structural Unemployment

• Cyclical Unemployment

• Frictional Unemployment

• Seasonal Unemployment

Which of the following is an example of inflation?

• The price of an iPhone rises as demand increases.

• The price of a TV remains constant as quality improves.

• The average price of a laptop decreases as the money supply increases.

• The average price of groceries increases following an increase in the money supply.

When inflation is high the _______________of the dollar decreases

• cost value

• purchasing power

• importance

• validity

Most countries try to maintain an inflation rate of ______ per year.

• One percent or less

• Two to three percent

• Four to five percent

• Six to seven percent

When inflation spirals out of control, it is called ​ (a)   (when prices increase by more than 50% per month).

• hyperinflation

• deflation

• inflation

• stagflation

Which of the following best describes the relationship between GDP and unemployment?

• A) As GDP increases, unemployment tends to decrease.

• B) As GDP increases, unemployment tends to increase.

• C) GDP and unemployment are unrelated.

• D) GDP and unemployment always move in the same direction.

What is the term for a general increase in prices and fall in the purchasing value of money?

• A) Deflation

• B) Inflation

• C) Stagflation

• D) Recession

Which economic indicator is used to measure the total value of goods and services produced in a country?

• A) Consumer Price Index (CPI)

• B) Gross Domestic Product (GDP)

• C) Unemployment Rate

• D) Inflation Rate