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Worksheetsmacro true false
Total questions: 40
Worksheet time: 20mins
Name
Class
Date
1.
For real gross domestic product (real GDP) is the value of all goods and services produced in an economy over a particular time period.
a)
T
b)
F
2.
Gross domestic product has three components: consumption, investment, and net exports.
a)
T
b)
F
3.
A business cycle is defined as a period of expansion and contraction of aggregate economic activity measured by real GDP.
a)
T
b)
F
4.
Fiscal policy refers to taxation and spending policies implemented by government.
a)
T
b)
F
5.
Purchasing power parity is the relationship between two countries' interest rates and their foreign exchange rates.
a)
T
b)
F
6.
Monetary policy refers to actions by a central bank to control the supply of money and interest rates that directly influence the financial markets.
a)
T
b)
F
7.
Firms react to unplanned inventory investment by reducing output.
a)
T
b)
F
8.
When G – T is positive, the government budget is in surplus.
a)
T
b)
F
9.
When taxes are given as a percentage of income, a higher tax rate implies a higher government spending multiplier.
a)
T
b)
F
10.
The rate of interest is the opportunity cost of holding money.
a)
T
b)
F
11.
An increase in the price of a key input in production, such as oil, will cause the AS curve to shift down and to the right.
a)
T
b)
F
12.
Rising output coupled with falling prices is called stagflation.
a)
T
b)
F
13.
Expansionary monetary policy when the economy is operating with little or no excess capacity will likely result in more inflation than increase in GDP.
a)
T
b)
F
14.
Fiscal policy has a longer implementation lag than monetary policy, but a shorter response lag.
a)
T
b)
F
15.
a budget surplus will help get an economy out of a recession
a)
T
b)
F
16.
A recession has 8+% U/E, CPI <1% GDP < 1% low confidence
a)
T
b)
F
17.
If the money supply increases, and the price level is unchanged, interest rates will fall
a)
T
b)
F
18.
If consumers save more in a recession because they lack confidence - they will make the economy worse
a)
T
b)
F
19.
Frictional unemployment is most common in a boom
a)
T
b)
F
20.
Long term unemployment is best solved by expansionary fiscal policy
a)
T
b)
F
21.
periods of inflation help speculators and risk takers
a)
T
b)
F
22.
In order to increase domestic investment, a country must either increase its saving or decrease its net foreign investment
a)
T
b)
F
23.
An increase in the price level is the same as a decrease in the value of money
a)
T
b)
F
24.
Inflation tends to stimulate saving because it raises the after-tax real return to saving
a)
T
b)
F
25.
If the nominal interest rate is 7 percent and the inflation rate is 5 percent, the real interest rate is 12 percent
a)
T
b)
F
26.
STX are leakages from the circular flow model
a)
T
b)
F
27.
automatic stabilisers like progressive tax and welfare payments smooth the business cycle
a)
T
b)
F
28.
the greater the leakages the smaller the multiplier effect
a)
T
b)
F
29.
a new welfare system which encourages people to work rather than take welfare is a supply side economic policy
a)
T
b)
F
30.
If the economy is at full employment, the unemploy- ment rate is zero.
a)
T
b)
F
31.
new home loan approvals are lagging indicators
a)
T
b)
F
32.
GDP can be measured using CPI
a)
T
b)
F
33.
buying shares is investment
a)
T
b)
F
34.
The circular flow model shows that consumer goods and services produced by business firms are sold in the goods market ( real flow)
a)
T
b)
F
35.
household sector earns its income by selling the factors of production
a)
T
b)
F
36.
C makes up approximately 60% of GDP in MDCs
a)
T
b)
F
37.
Investment is the most stable component of GDP
a)
T
b)
F
38.
AD always equals AS in market economy
a)
T
b)
F
39.
Keynesian economics is about government intervention to achieve macroeconomic equilibrium
a)
T
b)
F
40.
privatisation is an example of fiscal policy
a)
T
b)
F
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