Unit 6 Economics Review

GDP measures which of the following?

• The total value of goods and services produced in a country

• The total population of a country

• The average income of citizens

• The amount of money in circulation

GDP per capita shows:

• the average economic output per person in a country

• the total population of a country

• the total value of exports in a country

• the amount of money in government reserves

The unemployment rate is defined as:

• The percentage of the labor force that is unemployed and actively seeking work.

• The total number of people employed in a country.

• The percentage of people who are not looking for work.

• The number of job openings in the economy.

Inflation affects purchasing power in which of the following ways?

• It decreases purchasing power.

• It increases purchasing power.

• It has no effect on purchasing power.

• It doubles purchasing power.

The inflation rate is an important indicator because:

• it reflects changes in the cost of living and purchasing power.

• it measures the unemployment rate in the economy.

• it shows the total value of exports and imports.

• it indicates the level of technological advancement.

Economic health is reflected in GDP growth by:

• indicating the overall increase in a country's economic output

• showing the decline in population growth

• measuring the level of political stability

• reflecting changes in weather patterns

What does it mean when GDP is rising but unemployment is also rising?

• It may indicate economic growth without job creation.

• It means all sectors are booming.

• It shows that inflation is decreasing.

• It suggests that the economy is in a recession.

GDP per capita is more useful than GDP alone because:

• it measures the average income per person, giving a better sense of individual prosperity.

• it only measures the total output of a country, not individual well-being.

• it ignores population size when comparing countries.

• it focuses solely on government spending.

High unemployment has what effect on GDP?

• It decreases GDP

• It increases GDP

• It has no effect on GDP

• It causes GDP to remain constant

Inflation influences interest rates in which of the following ways?

• Higher inflation generally leads to higher interest rates.

• Higher inflation generally leads to lower interest rates.

• Inflation has no effect on interest rates.

• Inflation causes interest rates to remain constant.