2.2,2.4,2.5

What is the primary measure of material living standards?

• Nominal GDP

• Real GDP per capita

• Inflation rate

• Unemployment rate

Which of the following is NOT a factor influencing non-material living standards?

• Literacy rates

• Crime rates

• Annual GDP growth

• Environmental quality

Why does high GDP per capita not always indicate high living standards?

• It does not account for inflation.

• It excludes government spending.

• It may reflect uneven income distribution.

• It measures only non-material wellbeing.

What is a negative environmental trade-off of increased material living standards?

• Improved healthcare services

• Increased pollution and climate change

• Higher literacy rates

• Greater access to leisure activities

Which policy is likely to improve non-material living standards but reduce material living standards?

• Lower income taxes

• Carbon taxes and reduced work hours

• Increased investment in infrastructure

• Encouraging longer working hours

How can higher incomes contribute to environmental protection?

• By reducing inflation

• By funding pollution reduction initiatives

• By increasing industrial production

• By eliminating the need for renewable energy

Which phase of the business cycle is characterized by rising GDP and falling unemployment?

• Contraction

• Peak

• Expansion

• Trough

What typically happens during a peak (boom) phase?

• Inflation and unemployment rise together

• GDP reaches its highest point, and inflation rises

• Economic activity slows down

• Businesses reduce production

In which phase of the business cycle is GDP growth negative and unemployment high?

• Expansion

• Peak

• Contraction

• Trough

Which sector of the economy collects taxes and provides public goods and services?

• Household sector

• Business sector

• Government sector

• Financial sector