JHU Week 2 Practice

In a heritage‑based economy, what chiefly determines what gets produced?

• Government price ceilings

• Current market demand

• Long‑standing customs and rituals

• Private ownership of all capital

In a pure market setting, who effectively “votes” for which goods and services will exist?

• Religious authorities

• A central planning board

• Consumers and entrepreneurs making voluntary deals

• Neighborhood councils

Which statement best fits a command economy?

• Prices and output are set by supply‑and‑demand forces

• The government issues production quotas and controls distribution channels

• Decisions stem from tribal traditions

• Firms operate with almost no state oversight

The short‑run aggregate supply (SRAS) curve displays:

• Planned spending by households at every price level

• How total real output responds to different overall price levels in the near term

• The trade‑off between inflation and unemployment

• The long‑run growth path of the economy

Economists call the unemployment rate that prevails when only frictional and structural joblessness exist the:

• Cyclical rate

• Natural rate

• Recessionary rate

• Hidden rate

Which source of unemployment is not part of the natural rate?

• People between jobs for better matches

• Skills mismatches caused by industry shifts

• Layoffs triggered by a broad economic slump

• Minimum‑wage rules that keep some workers priced out

An American tourist buys handcrafted boots in Florence, Italy. In U.S. national accounts this transaction will:

• Drop net exports while leaving GDP unchanged

• Boost both GDP and net exports

• Lower GDP but keep net exports constant

• Raise GDP while reducing net exports

Suppose output quantities rise 10% across the board while all prices fall 10%. What happens?

• Real GDP rises 10%, nominal GDP falls 10%

• Real GDP rises 10%, nominal GDP holds steady

• Real GDP is unchanged, nominal GDP climbs 10%

• Real GDP is unchanged, nominal GDP drops 10%

The Consumer Price Index tracks almost the same price movement as which other statistic?

• GDP deflator

• Nominal GDP

• Real GDP

• Unemployment rate

A worker who quits on Friday and starts a new job the following month is counted as:

• Cyclically unemployed

• Seasonally unemployed

• Frictionally unemployed

• Structurally unemployed