WorksheetsFinal Exam Review
Total questions: 86
Worksheet time: 53mins
We measure economic growth using (a)
We measure full employment by using the ___________ _____
(a)
What is the difference between real GDP and GDP?
real GDP is adjusted for price changes
GDP is only measured annually
real GDP counts resale goods
real GDP counts domestic labor
Which of the following is NOT a type of unemployment?
Cyclical
Frictional
Seasonal
Temporary
Why do we care about economic growth?
Improves standard of living
Makes the government richer
Improves public education
Makes businesses wealthier
Which of the following would count in the US’s GDP?
I buy a sweater
A business buys new computers for its employees
A city government builds a new park
Google buys a factory in Germany
What does GDP measure?
Economic output
Price stability
Full employment
Standard of living
Which of the following is part of measuring standard of living?
Public health
Education levels
Public safety
Environmental quality
Define cyclical unemployment
Caused by a lack of skills
Caused by an economic downturn
Caused by changes in tech
Define seasonal employment
Only works part of the year
Caused by a change in tech
Caused by an economic downturn
You get fired
If I get laid off due to a recession, it is
Cyclical unemployment
Frictional unemployment
Seasonal unemployment
If I quit my job to look for a better one, it is
Frictional unemployment
Cyclical unemployment
Structural unemployment
Seasonal unemployment
If I work at a factory and I get replaced by a robot
Seasonal unemployment
Cyclical unemployment
Frictional unemployment
Structural unemployment
Why do we care about measuring and studying unemployment?
Because its the moral thing to do
Because it benefits the economy
It doesn’t matter
Why is low unemployment good for the economy?
Lower poverty and crime
More income tax revenue for the government to spend
People have more money to spend
The government has to spend less in unemployment benefits
What are the two conditions a worker must meet to be considered unemployed?
Willing and able to work
Actively looking for a job
Over 21 years old
Formerly employed
What is an exchange rate?
The rate at which goods are exchanged between two countries
The price of one nation's currency in terms of another's
How many US dollars you can exchange for RMB at Travelex
The price of goods in terms of a foreign currency
If the US $ were to appreciate in relation to the Euro, what effect would this have?
European consumers would have more purchasing power in US
US consumers can buy more European goods and services for fewer $$
US consumers can buy more English goods and services for fewer $$
European tourists to the US will spend more $$
If the US is currently experiencing inflation, what will happen to the value of its currency?
It will likely depreciate
It will likely appreciate
No change
What might cause the value of the U.S. dollar to appreciate in relationship to the euro?
Increased demand for European products in the U.S.
Increased demand for U.S. products in Europe.
Increases in the U.S. money supply
High rates of inflation in the U.S.
One advantage of a weak dollar is that… ?
travel abroad is cheaper for Americans.
American income tax rates go down.
Imports are cheaper for Americans to buy.
American exports increase.
What is an exchange rate?
The rate at which goods are exchanged between two countries
The price of one nation's currency in terms of another's
How many US dollars you can exchange for RMB at Travelex
The price of goods in terms of a foreign currency
What is a decrease in the value of a currency?
Appreciation
Depreciation
Inflation
Absolute advantage
You are on a trip to Germany. You swap your dollars for Euros. Why exchange currency?
To buy or sell goods in Germany; they won't take dollars.
Because dollars are worth the same as other currency
Because Euros are a great souvenir.
The Austrian government gives a grant to manufacturers who produce and export automotive leather.
embargo
tariff
subsidy
quota
In 1996, the U.S. taxed imported grapes, ceramic tableware, motorcycles, bicycles with wheels not exceeding 63.5cm in diameter, and sports footwear of which over 50% of the external surface area was leather.
embargo
tariff
subsidy
quota
France imposes a limit on Avocado imports from Mexico.
tariff
quota
embargo
A stop or ban on imported goods from a country is ________.
a tariff
a quota
an embargo
refers to the unrestricted flow of goods, services, and productive resources between countries
free trade
balance of trade
trade surplus
trade deficit
Qualifications a good must meet in order to be imported into a country
Standards
Subsidy
Quota
Tariff
Trade barriers are generally designed to help which 2 groups?
Domestic producers
Domestic workers
Domestic consumers
Foreign travelers
Currency appreciation
An increase the value of a currency relative to another
A decrease in the value of a currency relative to another
A change in the value of currency
No change in the value of currency
Currency depreciation
An increase the value of a currency relative to another
A decrease in the value of a currency relative to another
A change in the value of currency
No change in the value of currency
Which of the following would be counted in the US's GDP?
A car produced in Korea by an American car company
Your aunt pays you to babysit your cousin
A French company based in the US makes frozen pastries
A business buys ingredients to make canned soups
An increase in GDP is an indicator of (a)
A positive economic growth rate is related to an improved (a)
Since GDP only calculates the value of final goods and services, these interactions take place in the (a) market
How is real GDP different than GDP?
real GDP counts products produced overseas
real GDP doesn't subtract imports
real GDP is adjusted for price changes
GDP is only counted for a year period, real is calculated for a decade
If I export $1000 worth of goods and services and import $500, my net exports equals (a)
What phase of the business cycle do we expect real GDP to be at its highest and unemployment at its lowest?
peak
trough
expansion
contraction
What phase of the business cycle we do we expect real GDP to be at its lowest and unemployment at its highest?
peak
trough
expansion
contraction
Where on the business cycle is real GDP increasing and unemployment decreasing?
Peak
trough
contraction
expansion
Where on the business cycle is real GDP decreasing and unemployment increasing?
peak
trough
expansion
contraction
What are the two fiscal policy tools of the federal government? Select two choices.
Government spending
Taxes
Monetary policy
International trade
What would the government do to move out of a recession? Two options are correct.
Increase government spending
Decrease government spending
Increase taxes
Decrease taxes
What would a government do to decrease inflation during an expansionary period?
Increase government spending
Decrease government spending
Increase taxes
Decrease taxes
What type of fiscal policy is generally more popular with voters?
Expansionary fiscal policy
Contractionary fiscal policy
What could cause the shift from D1 to D2?
A change in preferences
A change in price
A change in quantity demanded
A change in quantity supplied
If the supply curve on this graph represents iPhones, what would cause the change from S to S1 (red to purple line)?
An increase in computer chips
An increase in the cost of producing an iPhone
Employees figure out a way to work more efficiently
The price of iPhones increases
The point in the middle of the two curves represents or shows....?
Market Equilibrium
An increase in supply
A shortage
A surplus
New technology advances the rate at which furniture can be assembled. Why does this change the supply?
There is a change in cost of production.
The number of producers changes.
The expectations of consumers changes.
The output rate declines.
Which statement expresses a central idea of how the laws of supply and demand work?
The government sets the prices for goods and services.
Prices are determined by the interaction of producers and consumers.
Consumers alone determine the prices for goods and services.
Technology dictates the prices charged for goods and services.
If the price of a substitute to good X increases, then
The demand for good Y will increase.
The market price of good X will decrease.
The demand for good Y will decrease.
The demand for good X will not change.
If the demand for X decreases, then the demand for the complementary good Y will...
Increase
Remain the same
Decrease
There's not enough information to answer this question
What is an incentive?
Something that motivates you
A benefit
A cost
Something scarce
(a) exists because (b) needs and wants exceed (c) resources
Land
Natural resources
Labor
Workers and their skills
Capital
Physical equipment or financial assets
Entrepreneurship
Combines the other 3 types of resources to create something productive
What is allocation?
Distribution of resources
Production
Marketing
Creation of resources
How do we know if a decision is rational?
We never do
The benefits outweigh the costs
The benefits sound good
I don’t care about the costs
Who makes the economic decisions in a command economy?
The government
Firms
Consumers
Who makes the decisions in a pure market economy?
The government
Firms
Consumers
Who makes the decisions in a mixed economy?
The government
Firms
Consumers
What type of economy is the US?
Command
Market
Mixed
Product market (a)
Resource market (b)
The Circular Flow Model illustrates the relationship between which two groups?
Producers and Consumers
Households and Individuals
Firms and the government
Individuals and the government
The Law of Demand states that as price rises, quantity demanded __________
Rises
Falls
Stays the same
Can’t be predicted
The Law of Supply states that as price rises, quantity supplied __________
Rises
Falls
Stays the same
can’t be predicted
On the supply and demand graph, where does the most efficient price and production quantity occur?
Impossible to predict
Where supply and demand intersect
The highest point
The lowest point
What occurs when quantity supplied is greater than quantity demanded?
A shortage
A surplus
Equilibrium
Nothing
What occurs when quantity supplied is less than quantity demanded?
A shortage
A surplus
Equilibrium
Nothing
A type of business structure with limited legal liability and is owned by shareholders.
Corporation
Sole proprietorship
Partnership
A type of market structure characterized by one supplier with concentrated influence
Monopoly
Oligopoly
Perfect competition
A type of market structure characterized by a few suppliers with concentrated influence
Monopoly
Oligopoly
Perfect competition
