Macroeconomic: Economic Indicators, Goals and Policy

What are the three main economic goals that every society strives to achieve?

• Economic growth, price stability, and full employment

• GDP growth, trade surplus, and low taxes

• Low inflation, high exports, and balanced budget

• Full production, zero unemployment, and no inflation

How is GDP calculated in an economy?

• Exports + Total Imports + Consumer Spending + Government Investment+ Net Trade

• Government Spending + Consumer Spending + Foreign Investment + Exports

• Consumer Spending + Investment +Government Spending + Imports

• Consumer Spending + Investment + Government Spending + Net Exports

Which of the following best defines the Consumer Price Index (CPI)?

• The total value of all goods produced in an economy

• The measure of average price changes over time for a basket of goods and services

• The difference between exports and imports

• The total government spending in an economy

What economic activity typically increases when the Fed lowers interest rates?

• Unemployment

• Investment and consumption

• Government taxation

• Trade deficits

What is the primary purpose of measuring unemployment rate?

• To calculate government spending

• To determine interest rates

• To assess the percentage of jobless people actively seeking work

• To measure economic growth

How is the unemployment rate calculated?

• (Total Population /Number of Employed) x 100

• (Number of Unemployed / Labor Force) × 100

• (Number of Unemployed/ Total Population) x 100

• (Labor Force/Number of Unemployed) × 100

What is considered a healthy inflation rate by most policymakers?

• 0%

• Around 2%

• 5% or higher

• 10%

Which component of GDP represents business spending on capital goods?

• Consumption

• Investment

• Government spending

• Net exports

What is the main purpose of the Federal Reserve's dual mandate?

• To control imports and exports

• To promote maximum employment and stable prices

• To increase government spending

• To reduce national debt

What is NOT a type of unemployment?

• Structural unemployment

• Cyclical unemployment

• Permanent unemployment

• Frictional unemployment