Macroeconomics Unit 2: Measuring the Economy Quiz

What are the three main objectives every economy aims to achieve?

• Growth, deflation, and zero unemployment

• Growth, inflation, and high employment

• Growth, stable prices, and limited unemployment

• Growth, stable prices, and full employment

Which of the following best describes GDP?

• The total value of all goods produced by a country's citizens

• The total value of all final goods produced within a country's borders in a year

• The total value of all goods and services exported by a country

• The total value of all services provided by a country

What are the four components that make up GDP?

• Consumer spending, business investment, government spending, and net exports

• Consumer spending, business investment, government spending, and imports

• Consumer spending, business investment, government spending, and savings

• Consumer spending, business investment, government spending, and taxes

What does the Consumer Price Index (CPI) measure?

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

• The change in prices of a basket of goods and services over time

• The total amount of consumer spending in an economy

• The level of unemployment in an economy

Why is 0% unemployment not considered ideal?

• Because it indicates a lack of economic growth

• Because it suggests that people are not transitioning between jobs

• Because it means there are no new job opportunities

• Because it leads to inflation