Macro Economics

The IRS lays off thousands of employees every year after April 15th. This is an example of

• seasonal unemployment

• cyclical unemployment

• frictional unemployment

• structural unemployment

The consumer price index (CPI) is an indicator of which of the following?

• the size of the economy

• the velocity of money

• the level of inflation or deflation

• the presence of a budget deficit or surplus

GDP, CPI, and the unemployment rate are all

• signs that the economy is peaking.

• signs that the economy is in contraction.

• economic indicators used to determine the state and direction of the economy.

• the result of economic expansion.

Saying that net exports are positive is the same as saying that

• there is a current account surplus

• there is a capital account surplus

• there is a current account deficit

• the same weight of goods has been imported as were exported

A pair of shoes that costs $80 last month costs $100 this month. Which of the following BEST describes this economic condition?

• inflation

• recession

• stagflation

• competition

Which of the following might be a sign of an economic trough?

• low unemployment

• recession

• high GDP

• stable CPI

Consumers reduce spending because they lack confidence in the economy. All else being equal, what effect will this have on the price level and GDP?

• Both prices and real GDP will decline.

• Both prices and real GDP will increase.

• Prices will increase, but real GDP will be unaffected.

• Prices will decrease, but real GDP will be unaffected.

If one wanted to know whether there had been inflation or not, the BEST measure to observe would be the

• GDP

• business cycle

• CPI

• national debt

Which of the following would be MOST LIKELY to increase aggregate demand?

• increasing the discount rate

• decreasing government spending

• increasing consumer confidence

• declining consumer confidence

Which of the following is NOT calculated into the Gross Domestic Product (GDP)?

• investment

• net exports

• aggregate supply

• government spending