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WorksheetsUnit 3 Test Review
Total questions: 17
Worksheet time: 17mins
The business cycle describes the fact that
unemployment levels are constantly changing.
an economy's GDP fluctuates between times of recession and expansion.
inflation rates are constantly changing.
politicians usually pass laws that cause the economy to react in unpredictable ways.
In the long run, the economy of the United States has
steadily grown over time.
steadily declined over time.
behaved in ways that cannot be explained by modern macroeconomics.
experienced drastic fluctuations, but it is back to its old levels now.
The general relationship between GDP & unemployment can be described as
direct; meaning that an increase in one variable usually signals an increase in the other variable.
inverse; meaning that an increase in one variable usually signals a decrease in the other variable.
During recessions all of the following usually happen EXCEPT
GDP decreases.
unemployment increases.
inflation increases.
inflation decreases.
When the economy experiences expansion, it is most likely the case that
GDP is increasing, unemployment is increasing, and inflation is decreasing.
GDP is increasing, unemployment is decreasing, and inflation is increasing.
GDP is decreasing, unemployment is decreasing, and inflation is increasing.
GDP is decreasing, unemployment is decreasing, and inflation is decreasing.
GDP is an important economic measurement because it
provides valuable data on unemployment rates.
measures the combined total of all intermediate and final goods produced.
measures all final goods and services produced by a country.
includes all economic activity, incluing financial transactions and purchases of used goods.
Which of the following is NOT included when calculating GDP for the United States?
Cars manufactured in Japan, but sold in the United States.
Cars manufactured in the United States, but sold in Japan.
Cars manufactured in Michigan, but sold in Minnesota.
Cars manufactured in Michigan, but sold to the government.
Which of the following statements is about nominal and real GDP is true?
Nominal and real GDP may have different levels, but they are always increasing.
Nomindal GDP is a more useful measurement when comparing levels of GDP over time.
Nominal GDP is always a a larger number than real GDP.
Nominal and real GDP are always the same in whichever base year has been chosen for calculation.
All of the following people are considered EMPLOYED except
Jen, who has been home sick for the last two weeks.
Peter, who has only worked at his job for 3 hours last week.
John, who has been on vacation from his job for one week.
Harold, who began his job three weeks ago on his 15th birthday.
All of the following people are considered UNEMPLOYED except
Molly, who filled out three job applications this week.
Ryan, who currently serves in the military.
Kyle, who only worked for 30 minutes last week.
Brittany, who was recently fired from her job.
One of the problems with the unemployment rate is that it
does not reflect workers who have given up searching for a job.
is not measured accurately.
counts underemployed workers as unemployed workers.
does not count any workers above the age of 55.
A worker who was laid off due to a downturnin the business cycle would be considered
seasonally unemployed.
frictionally unemployed.
cyclically unemployed.
structurally unemployed.
When the unemployment rate is relatively high,
the growth in real GDP is high.
the growth in real GDP is low.
inflation is also relatively high.
the amount of physical capital available has decreased.
The Consumer Price Index (CPI)
consists of items a typical 18-year old might buy.
uses a representative market basket to calculate current price levels in an economy.
is equal to 200 in whichever year is considered the base year.
only increases during times of economic expansion.
The difference between demand-pull inflation and cost-push inflation is that
demand-pull inflation is caused by a drop in aggregate demand and cost-push inflation is caused by a rise in aggregate supply.
demand-pull inflation is caised by a drop in aggregate supply and cost-push inflation is caused by a rise in aggregate demand.
demand-pull inflation is caused by a rise in aggregate supply and cost-push inflation is caused by a drop in aggregate demand.
demand-pull inflation is caused by a rise in aggregate demand and cost-push inflation is caused by a drop in aggregate supply.
If a government decides to pay its debts by printing more moeny, the economy will likely encounter
dramatic decreases in inflation rates.
excessive rates of inflation, which may lead to hyperinflation.
high rates of inflation, but very low levels of unemployment.
problems with deflation.
Which of the following is not considered a cost of inflation?
Shoe-leather costs
Output costs
Menu costs
unit of account costs
