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Unit 2 Macro Test Review

Total questions: 49

Worksheet time: 49mins

Name
Class
Date
1.
A _______________ is a business owned jointly by two or more people. 
a)
Partnership 
b)
Corporation 
c)
Limited Liability Corporation (LLC)
d)
Sole Propirtorship
2.
An advantage of a corporation is that
a)
owners pay fewer taxes than owners of other forms of business.
b)
the business is subject to little government regulation.
c)
owners have limited liability for debt.
d)
owners have direct and immediate control over daily management of the business.
3.
Perfect competition is characterized by
a)
a large number of sellers and buyers.
b)
diverse products.
c)
sellers acting together to set prices.
d)
uninformed buyers and sellers.
4.
Barry and two associates have been operating a business that is not going well. Barry is stressed out because the company is over $200,000 in debt and he knows that if it goes out of business, he and his two associates will have to pay it out of their own pockets. It sounds like Barry and his two associates have a 
a)
partnership.
b)
corporation.
c)
sole proprietorship.
d)
stock.
5.
Mr. Simpson is liable for all the debts of his company. Mr.Simpson has which type of business organization?
a)
sole proprietorship
b)
monopoly
c)
perfect competition
d)
corporation
6.
Which market has no competition?
a)
perfect competition
b)
oligopoly
c)
monopoly
d)
monopolistic competition
7.
Which market structure is BEST indicated by the soda market?
a)
monopoly
b)
pure competition
c)
oligopoly
d)
natural monopoly
8.
A market structure in which only one producer supplies a good that is in demand is called a 
a)
monopoly.
b)
oligopoly.
c)
competition.
d)
monopolistic competition.
9.
An industry that is dominated by a few large firms is 
a)
monopolistic competition.
b)
a monopoly.
c)
perfect competition.
d)
an oligopoly.
10.

What does Gross Domestic Product

mean?

a)

The total value of all goods and services a country imports.

b)

The total value of all goods and services a country exports.

c)

The total value of all goods and services produced within a country in one year.

d)

The net loss in profits within a country due to imports.

11.

The___________ a country’s GDP, the better the country’s standard of living.

a)

lower

b)

greater

c)

smaller

d)

answers 1 and 3 are correct

12.

What are capital goods?

a)

goods that are produced in the capital

b)

the factories, machinery, and technology used to produce goods and services

c)

goods that are produced without natural resources

d)

goods that are produced by the government

13.

Economic growth can be seen by an outward shift of

a)

a) The Production Possibility Curve

b)

b) The Gross Domestic Barrier

c)

c) The Demand Curve

d)

d) The Minimum Efficient Scale

14.

Economic growth is a situation where an economy's real GDP increase.

a)

True

b)

False

15.

The total value of all final goods and services produced in a country in a given year.

a)

Gross Domestic Product

b)

Consumer Price Index

c)

Inflation

d)

Unemployment

16.

A price index determined by measuring the price of a standard group of goods meant to represent the market basket of a typical consumer.

a)

Customer Purchasing Index

b)

Consumer Price Index

c)

Consumer Policy Index

d)

Inflation

17.

A sustained general increase in prices across an economy.

a)

Disinflation

b)

Consumer Price Index

c)

Deflation

d)

Inflation

18.

Type of unemployment that occurs as a result of harvest schedules, or when industries make seasonal shifts in their production schedules.

a)

Seasonal Unemployment

b)

Structural Unemployment

c)

Frictional Unemployment

d)

Cyclical Unemployment

19.

A period of macroeconomic expansion or growth, followed by a period of contraction, or decline.

a)

Business Cycle

b)

Circular Flow

c)

Equilibrium

d)

GDP

20.

If the consumer price index (CPI) for year 2013 is equal to 180 and for year 2014 is equal to 198, calculate the inflation rate level in year 2014.

a)

10%

b)

18%

c)

80%

d)

98%

21.

A labor force of 20 million people has 18.5 million people employed. Find the unemployment rate.

a)

10%

b)

8.5%

c)

7.5%

d)

6%

22.

If operators are fired and replaced with computer technology, the operators would be considered

a)

frictionally unemployed

b)

structurally unemployed

c)

cyclically unemployed

d)

dissatisfiededly unemployed dissatisfiededly unemployed

23.

The unemployment rate will drop if

a)

A person is hired into a new job

b)

Someone who was previously laid off is rehired

c)

An unemployed person stops looking

d)

ALL of these answers are CORRECT

24.

Which of these people is officially unemployed

a)

A secretary who took 6 months off for maternity leave

b)

An aspiring actress who waits tables but would rather act

c)

Maid who got fired and will start a new job in 2 weeks

d)

A student who only works 4 hours a week in the library

25.

a woman who lost her job due to a decrease in sales during a recession in the economy is...

a)

frictionally unemployed

b)

structurally unemployed

c)

technologically unemployed

d)

cyclically unemployed

e)

seasonally unemployed

26.

When individuals are searching for greener pastures is considered what type of unemployment?

a)

frictional

b)

cyclical

c)

structural

d)

seasonal

27.

Select the durable goods

a)

Washing Machine

b)

Car

c)

Publix Sub

d)

Face Mask

e)

Refrigerator

28.

John went to Sports Clips and purchased a haircut. Where would this show up in the GDP formula?

a)

Consumption (Consumer)

b)

Investment (Business)

c)

Government Spending

d)

Exports-Imports

29.
The Lowest point in the business cycle
a)
Peak
b)
Trough
c)
Expansion
d)
Contraction
30.
Which letter represents the Contractionary (Recession) Phase?
a)
A
b)
B
c)
C
d)
D
31.
Aly spends $400 on used textbooks at the beginning of the semester in college.  Is this included in the GDP?
a)
YES
b)
NO
32.
GDP is calculated by
a)
adding up the cost of goods used in producing the item
b)
subtracting all costs from total revenue
c)
adding consumption + investment +government spending+ (exports sold - imports bought)
33.
Each individual on food stamps in Delaware can receive up to $194 a month.  Is this included in government spending?
a)
Yes - Government spending
b)
Yes - Consumer Spending
c)
No - Intermediate Goods
d)
No - Purely financial Transaction 
34.
period of economic growth as measured by a rise in real GDP
a)
peak
b)
contraction
c)
trough
d)
expansion
35.
Where on the business cycle would you find the highest unemployment?
a)
A
b)
B
c)
C
d)
D
36.
Why doesn't GDP count intermediate goods?
a)
the intermediate value may have different stages
b)
intermediate value cannot be calculated
c)
intermediate value is calculated into GNP
d)
intermediate value is included in the value of the final good
37.
Components of GDP are...
a)
consumption, investment, government purchases, and foreign exchange market
b)
consumption, investment, government purchases, and export spending minus import spending
c)
consumption, investment, transfer payments, and imports
d)
consumption, investment, the money supply, and government purchases
38.

Dexter buys equipment for his laboratory this is an example of which component of GDP

(a)  

39.

Wayne Enterprises selling a plane to Lufthansa (German airline) is an example of which GDP component

a)

Net Export

b)

Foreign Policy

c)

Consumption

d)

Not included in the GDP

40.

A city's transit authority increases the price of subway and bus tickets from $1.25 to $1.50. If the demand for these tickets is price inelastic, 1) the # of people riding buses & subways AND 2) the city's revenues will change in which way (respectively)?

a)

1) Increase; 2)Increase

b)

1) Decrease; 2) Increase

c)

1) Decrease; 2) Decrease

d)

1) No Change; 2) Increase

41.
The price elasticity of demand measures how much
a)
quantity demanded responds to a change in price.
b)
quantity demanded responds to a change in income.
c)
price responds to a change in demand.
d)
demand responds to a change in supply.
42.

The Bureau of Labor statistics calculates the CPI by looking at _______

a)

some consumer goods/services

b)

all consumer goods/services

c)

some demand increases

d)

all demand increases

43.
When inflation is high the _______________of the dollar decreases
a)
cost value
b)
purchasing power
c)
importance
d)
validity
44.
If CPI goes from 100 to 300 and your salary goes from $100,000 to $200,000, what happened to your purchasing power?
a)
Increase
b)
Decrease
c)
No change
45.
Demand-Pull inflation can be describes as too many _________ chasing too few __________
a)
jobs, workers
b)
consumers, producers
c)
dollars, goods
46.
What 2 types of inflation are there?
a)
demand pull and cost push
b)
demand pull and supply glut
c)
supply glut and demand side
d)
supply inflation and demand inflation
47.
What causes cost push inflation
a)
An increase in demand for goods and services
b)
An increase in supply
c)
A rise in production costs passed on to consumers
d)
A fall in the price of imports
48.

This is the minimum price buyers are required to pay for a good. It's a lower limit for the price.

a)

equilibrium

b)

shortage

c)

price floor

d)

price ceiling

49.

Selling a product at a price below the price floor is illegal

a)

True

b)

False

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