WorksheetsEcon Indicators and Theories Quiz Practice
Total questions: 18
Worksheet time: 8mins
Which of the following is NOT considered an "economic indicator", and used to measure the economy of a country?
Gross Domestic Product
Inflation
Discretionary Spending
Unemployment Rate
Which of the following is an accurate definition of "full employment"?
100% of the adult residents of a place are employed
100% of the adults residents of a place who are legally able to work, are employed
nearly every adult resident who wants a job has one
the economy is perfectly efficient; there are no wasted resources, including workers
Which of the following is true about inflation?
inflation is beneficial to debtors and harmful to people who save money
nearly all economists agree that there is not acceptable/beneficial level of inflation
inflation is the opposite of GDP growth
some prominent economists argue that the phenomenon of inflation is actually a myth
Which of the following is true about the government institutions responding for fiscal and monetary policy?
The Treasury Department houses (and is in control of) the IRS, the Federal Reserve, and the Congressional Budget Office.
The Treasury Department primarily manages the federal government's revenue, prints and coins money, and collects taxes.
The Federal Reserve is responsible primarily for fiscal policy.
The Congressional Budget Office is the most important federal office when it comes to tax policy.
Which is accurate about the differences between Keynesian and Supply-side approaches to stimulating a slow economy?
Keynesians will advocate increasing government spending during a recession.
Supply-siders will advocate increasing government spending during a recession.
Supply-siders are cautious about tax cuts, which will need to be accompanied by spending cuts.
Keynesians are cautious about any government interference in the free market, preferring to wait for the "Invisible Hand" to bring things back into equilibrium.
Which of the following is a sure sign the economy is entering a stable "recovery" stage?
Unemployment decreases
GDP growth decreases
Inflation spikes
Interest rates are decreased
How does one know that a particular point is a "peak" in an economic cycle?
Full employment is reached
Zero inflation is achieved
After that point, economic indicators begin to increase
After that point, economic indicators begin to decline
The Laffer Curve is employed to support which of the following economic theories/stances?
Authoritarianism
Supply-side
Keynesianism
Mercantalism
According to the Laffer Curve:
Increasing the amount of revenue collected by the government is a central goal.
At a certain point, increasing the tax rate becomes harmful, as doing so disincentivizes work.
The best tax rate is zero.
In an economic recession, government spending is needed to stimulate the economy.
Which if the following US presidents shows the LEAST influence of Supply-side thinking?
Reagan
Hoover
Trump
FDR
Which of the following is NOT a Keynesian policy approach to economic stimulus during a recession?
Lowering taxes
Proving grants to retrain unemployed workers
Providing grants to states for infrastructure projects
Increasing the number of months a person can collect unemployment insurance
Which of the following economic systems or theories was Adam Smith criticizing in his The Wealth of Nations?
Capitalism
Communism
Laissez-Faire
Mercantalism
Which of the following is a sign that the economy is declining?
Unemployment rates decline
GDP per capita increases
The Federal Reserve Board decreases interest rates
Inflation is at 2.5%
WHY do supply-side economists believe lowering taxes on the rich will help the economy?
The rich are the trustworthy with money.
The rich are more like to save their money then the poor.
The rich will invest the money in businesses.
The rich will give the money to the poor in the form of charity.
Which of the following pairs is NOT a match?
Keynesian: The New Deal
Keynesian: The Great Society
Keynesian: The Emergency Economic Stabilization Act of 2008
Keynesian: Reaganomics
Supply-side: "The Bush Tax Cuts"
Which of the following policies is a Republican congressperson likely to support?
Higher taxes to support new social spending
Lower taxes AND higher social spending
Lower taxes AND lower social spending
Increased business regulations
Which of the following is an example of monetary policy?
Increasing taxes to raise more revenue
Increasing interest rates to slow borrowing (and economic growth)
Decreasing spending to enable taxes to be lowered
Decreasing taxes to encourage economic growth
Which of the following is NOT included in a calculation of GDP?
Student loans
Military spending on new drones
Purchases of new bicycles
Exports of US corn to Mexico
