WorksheetsUnit 5 review
Total questions: 60
Worksheet time: 1hrs 14mins
The rate of inflation is most commonly measured by use of
a price deflator
the GDP deflator
the consumer price index
all of the above
The consumer price index measures
the cost of buying a fixed basket of goods and services, and calculating how this cost changes from year to year
the cost of buying a basket of goods and services, which changes from year to year depending on the price level
the cost of buying a basket of goods and services, which changes from year to year depending on consumer tastes and preferences
all of the above, depending on what the CPI is trying to measure
An increase in aggregate demand is likely to lead to
demand-push inflation
cost-push inflation
demand-pull inflation
cost-pull inflation
Demand-pull inflation and cost-push inflation differ in that
demand-pull leads to lower real GDP and cost-push to higher real GDP
demand-pull leads to higher real GDP and cost-push to lower real GDP
demand-pull leads to greater unemployment and cost-push to lower unemployment
a combination of the above, depending on the size of AD and SRAS shifts
What is inflation?
Inflation is an social studies term that describes a general increase in prices 📈 and a fall in the purchasing power of money 📉.
Inflation is an economic term that describes a general increase in prices 📈 and a fall in the purchasing power of money 📉.
Inflation is an economic term that describes a general increase in prices 📈 and a increase in the purchasing power of money 📉.
A little inflation is normal and even good for a healthy economy. Inflation becomes a problem when it grows too quickly.
True
False
What causes inflation?
inflation occurs when there's an increase in production costs OR when demand for products and services increases faster than supply
inflation occurs when there's an increase in production costs OR when demand for products and services increases slower than supply
inflation occurs when there's a slower increase in production costs OR when demand for products and services increases faster than supply
Money supply creates inflation only when ...
the money is printed slower than the economy grows.
the money is printed faster than the economy grows.
the money is printed at the same speed than the economy grows.
Inflation reduced people's purchasing power because
the same amount of money buys ore goods and services
the same amount of money buys fewer goods and services
the market basket has to be changed every year
there is not enough money in the economy
Most countries try to maintain an inflation rate of ______ per year.
One percent or less
Two to three percent
Four to five percent
Six to seven percent
What is meant by the term 'hyperinflation'?
The rise in GDP following the end of a recession
A continuous general rise in prices
A general fall in prices
Very high levels of inflation
The Consumer Price Index. If the price index is 100 today and 105 in one year's time, what will the inflation rate be?
5%
-5%
10%
105%
_____________ inflation is regarded as safe and essential for Economic Growth.
Running
Creeping
Hyper
Walking
Gross Domestic Product includes the market value of all FINAL goods and services produced within a country during a given period of time.
True
False
Intermediate goods, used goods, and illegal goods are ____________ in a countries Gross Domestic Product(GDP).
included
excluded
Chemical fertilizers used by the farmers or cloth used by a tailor are examples of ________________________.
Intermediate goods
Final Goods
The largest spending category of GDP. This picture is a break down of all the things consumers spend their money on.
Household Consumption/ C
Business Investment/ I
Government Purchases/ G
Net Exports/ NX
A company putting its money towards expanding its business. An example of this would be a construction company buying new trucks and other heavy equipment to improve production.
Household Consumption/ C
Business Investment/ I
Government Purchases/ G
Net Exports/ NX
Over half of the spending of the _______________ include programs like Medicare, Social Security & Unemployment.
Household Consumption/ C
Business Investment/ I
Government Purchases/ G
Net Exports/ NX
According to this image, the United States exported 200 billion in goods and services, and imported 150 billion. This category is what part of GDP?
Household Consumption/ C
Business Investment/ I
Government Purchases/ G
Net Exports/ NX
What does Per Capita Mean?
Per Household
Per Object
Per Worker
Per Person
GDP per capita is found by dividing a country's GDP by it's
population.
average birth rates.
number of households.
People who underemployed
no longer look for work
work part time or at jobs that are below their skills
are the same as unemployed workers
experience only frictional employment
Is this counted in the GDP of the US?
The federal government purchases a new submarine for the US Navy.
Yes
No
In which part of the GDP calculation does this fit?
You spend $15 at AMC to see the latest Avengers movie.
Consumer spending
Government spending
Investment spending
Net exports
In which part of the GDP calculation does this fit?
The US military spends $5 billion on five new helicopters.
Consumer spending
Government spending
Investment spending
Net exports
The POVERTY THRESHOLD is
lowest amount of income that a family can make to maintain a basic standard of living
highest amount of income that a family can make before they are considered rich
lowest amount of taxes that the gov't can collect
highest number of people in a family that is permitted by tax law
The gov't uses the POVERTY RATE to determine..
how much money poor people earn
how many people donate money to charity
how many people are living below the poverty threshold
how much money to take from the rich
Two ways to measure income inequality are..
poverty rate
GINI Index
Lorenz Curve
HS graduation rate
Some reasons why there is a continuing growth of income inequality include:
the economy is against families living in poverty
more single-parent households
educated/skilled workers are able to demand higher salaries
lower/semi-skilled jobs (manufacturing) are not as available
Which of the following is a type of anti-poverty program?
Stock market investment funds
Social Security
Corporate tax cuts
Luxury goods subsidies
How do anti-poverty programs aim to reduce poverty?
By increasing the tax rate for all income groups
By providing direct financial assistance to those in need
By reducing government spending on public services
By encouraging the export of natural resources
What is a measure of the effectiveness of anti-poverty programs?
The increase in luxury car sales
The decrease in the unemployment rate
The reduction in the poverty rate
The increase in stock market indices
The Business Cycle measures ___ over time.
wealth
inflation
economic growth
A trend line will show-
an increase in Real GDP over time.
only economic recessions.
only economic expansions.
The business cycle is made up of how many phases?
5
4
3
2
The business cycle rises above the trendline during-
rescessions
expansions
troughs
A "boom" period is economic growth-
below the trend line
at the peak
above the trend line
Economic recovery begins-
above the trend line
at the end of a recession (trough)
at the "boom" period
GDP will begin to decline at-
the peak.
the trough.
the contractionary phase.
Business cycles are more stable if
the government consistently passes stimulus money
the government raises taxes
both banks and government set policies to meet the three economic goals
If a news headline says, "Finally!!! 2 straight months of increased jobs."
Where on the business cycle is the current economy?
Peak
Contraction/Recession
Trough
Expansion/Growth/Recovery
If a news headline says, "3 months of consecutive job losses is impacting consumer confidence."
Where on the business cycle is the current economy?
Peak
Contraction/Recession
Trough
Expansion/Growth/Recovery
Which of the following is a peak?
A
B
C
D
Which of the following is an expansion, or recovery?
A
B
C
D
