WorksheetsMacro Paper 1 Review
Total questions: 16
Worksheet time: 11mins
Real GDP growth in a country has been decreasing for an entire year. Is the country necessarily in a recessionary period of the business cycle? (Yes/No)
Yes
No
True or False: if a country experiences inflation, real GDP will be lower than nominal GDP.
True
False
What is the economic term used to refer to the difference between the full employment level of output and the equilibrium level of output, if the economy is producing below the full employment level? (Two words)
(a)
Which of the following events is most likely to result in an outward shift of the aggregate demand curve?
A decrease in the income tax rate.
A decrease in business confidence.
An increase in import expenditure.
A decrease in the level of foreign wealth.
What do neo-classical economists see as the most effective way to fight a recession?
Increase LRAS
Increase AD
Let the economy correct itself
Increase SRAS
When do we achieve short run macroeconomic equilibrium?
When D = S
When AD = LRAS
When SRAS = LRAS
When AD = SRAS
If the government passes a law to increase all wages in an economy by 10%, what will happen to the SRAS curve?
It shifts outwards (to the right)
It shifts inwards (to the left)
Nothing
There is a movement along the curve such that the real output decreases as the average price level decreases.
In the Circular Flow of Income model, taxes, imports and savings are all examples of ...
(a)
This diagram represents...
Supply-Side Deflation
Cost-Push Inflation
Demand-Deficient Deflation
Demand-Pull Inflation
What is the economic term used to refer to a falling, but still positive rate of inflation?
(a)
Who is helped, or at least not hurt, by inflation? (check all that apply)
Lenders
Savers
Importers
Borrowers
Which of the following is the least likely effect of economic growth on a country?
A higher standard of living.
A high level of inflation.
Depletion of the country’s natural resources.
A more equitable distribution of income.
In the Lorenz curve for the country shown, area A = 1000 and area B = 4000. What is the value of the country’s Gini coefficient, and does the country have a relatively equal or relatively unequal income distribution?
0.2; relatively unequal.
0.2; relatively equal.
0.8; relatively equal.
0.8; relatively unequal.
The natural rate of unemployment (NRU) consists of the following types of unemployment (check all that apply)
Seasonal Unemployment
Cyclical Unemployment
Structural Unemployment
Frictional Unemployment
In the diagram shown, the movement from B to C is meant to represent
Growth in actual, short-term, output
Growth in potential, short-term, output
Growth in actual, long-term, output
Growth in potential, long-term, output
Which are expected consequences of unemployment? (check all that apply)
Decreased purchasing power (lower AD)
Brain-drain
Increased savings
Increased government budget deficits
