Econ Final Study Guide

Which of the following is NOT considered a financial intermediary?

• Banks

• Mutual funds

• Bonds

• None of the above

What happens to the supply of loans as the interest rate increases?

• The supply of loans increases

• The supply of loans decreases

• The supply of loans remains unchanged

• The supply of loans becomes zero

If the government encourages saving, what is the likely effect on the equilibrium interest rate?

• It decreases

• It increases

• It stays the same

• It becomes negative

What is national saving equal to in a closed economy?

• Y – C – G

• GDP – Consumption – Taxes

• Taxes – Government Spending

• C + I + G + NX

Which of the following is NOT considered as 'Employed' according to the unemployment measurement?

• Paid employees

• Full-time students

• Unpaid workers in a family member’s business

• People working in their own business

Who is classified as 'Unemployed'?

• Someone working part-time

• Someone not employed, available to work, and tried to find work within the last 4 weeks

• A retiree

• A full-time student

What is included in the labor force?

• Only employed people

• Only unemployed people

• Employed and unemployed people

• Only full-time students

What is the natural rate of unemployment?

• The amount of unemployment that an economy normally experiences.

• The unemployment rate during a recession.

• The unemployment rate when everyone has a job.

• The unemployment rate caused by government policies.

Why is the natural rate of unemployment not zero?

• There is always a level of unemployment due to factors like frictional unemployment, minimum wage, unions, and efficiency wage theory.

• Because everyone always has a job.

• Because the government sets it that way.

• Because of inflation.

What is frictional unemployment?

• Unemployment due to the time it takes to match workers and jobs.

• Unemployment caused by economic recessions.

• Unemployment due to lack of education.

• Unemployment caused by automation.