WorksheetsEcon Ch. 6 -
Total questions: 47
Worksheet time: 34mins
Macroeconomics deals with the short-run variations in economic growth that make up the business (a)
What is included in economic data (or economic indicators)?
GDP
Unemployment
Inflation
Consumer Spending
(a) measures the value of the final goods and services produced within a country's borders during a specific period, usually a year.
To understand how economies operate and how their performance can be improved, economists collect and analyze (a) data
GDP, CPI, and the unemployment rate are all
signs that the economy is peaking.
signs that the economy is in contraction.
economic indicators used to determine the state and direction of the economy.
the result of economic expansion.
If the US' Real GDP increased from the previous year, the US output increased
True
False
Nominal GDP can increase even if there was no output increase from the previous year
True
False
(a) is the dollar value of all goods and services produced within a country's borders using their prices during the year they were produced.
An unanticipated event that changes the demand or supply of goods and services either positively or negatively is called an economic
(a)
More output means more consumption possibilities
Households are the principal source of savings
Economists compare real GDP numbers from one year to the next to see if there was a change in output (rather than a change in price)
Which one of the following is the best reason real GDP is an important measurement for an economy?
Multiple choice question.
It is a measure of changes in the level of prices in a country over time.
It measures all economic activity, both market and non-market transactions.
It is a monetary measure that allows for comparison of a nation's output across time.
It measures the quality of products over time.
How does real gross domestic product (GDP) differ from nominal GDP?
There is no difference between nominal GDP and real GDP.
Nominal GDP can be used to directly compare the amount of output produced from year to year while real GDP cannot be used for such comparisons.
Nominal GDP controls for price changes while real GDP does not.
Real GDP controls for price changes while nominal GDP does not.
What are the two primary topics studied by macroeconomics?
A. The forces of supply and demand
B. Pure competition in the short run
C. Long-run economic growth
D. Short-run fluctuations in output and employment
A
B
C
D
The Industrial Revolution began the rapid and sustained economic growth that continues as a modern phenomenon
Economists determine how much money a company has made.
(a) happens when resources are directed toward increasing future output
Which are characteristics of a well-functioning financial system?
A. It makes the most productive possible investments.
B. It flattens the business cycle.
C. It encourages saving.
D. It lowers the rate of inflation.
A
B
C
D
GDP that is measured without adjustments for price changes is called ______, and GDP that is measured using adjustments for price changes is ______.
A. variable GDP; fixed GDP
B. fixed GDP; variable GDP
C. nominal GDP; real GDP
D. real GDP; nominal GDP
A
B
C
D
Who are the main economic investors?
Businesses
Stockbrokers
Households
Government
The savings of ______ make their way into the banking system and become the investment funds of ______.
A. households; government
B. firms; households
C. firms; government
D. households; firms
A
B
C
D
Why do economists collect and analyze economic data?
A. To understand how economies operate
B. To determine how much profit a company has made
C. To calculate a person's income tax
D. To learn how to improve the performance of economies
A
B
C
D
A person who cannot get a job despite being willing to work and actively seeking work is considered (a)
What is the definition of inflation?
A. An increase in the overall level of prices
B. An increase in the supply of money
C. A decrease in the overall level of prices
D. An increase in the interest rate
A
B
C
D
Which of the following conditions exists when there is inflation?
A. a rise in the unemployment rate
B. an expansion of output
C. a rise in wages
D. a rise in the aggregate price level
A
B
C
D
An event that unexpectedly shifts the demand curve is called a(n) (a) .
What are the reasons that the Industrial Revolution is important to modern economic growth---that is, an increase in output per person? More than one answer may be correct.
The introduction of automation
The increase in population at the same rate as output
The growth of factory production
The emphasis on research and development
Nominal GDP adjusts for inflation
Modern economic growth is best measured as an increase in ______.
investment
output per person
nominal GDP
household consumption
Which of the following will lead to better living standards and economic growth?
A. Hyperinflation
B. Deflation
C. Savings
D. Economic investment
A
B
C
D
(a) shocks are unexpected changes in consumption of goods and services
Most short-run fluctuations are the result of (a) shocks
Economic investment represents spending on ______.
newly created capital goods
mutual funds
corporate and municipal bonds
shares of stocks
A well-functioning financial system helps to promote (a)
Financial intermediaries are organizations that receive funds from savers and then channel those funds to investors
Increased pessimism leads to less current investment and, subsequently, less future consumption
If output prices were fully (a) , output would remain constant and unemployment levels would not change.
(a) shocks are unexpected changes in the production of goods and services
Which of the following are true of the prices of many goods and services in the short run?
A. They are inflexible.
B. They are "sticky."
C. They are slow to change.
D. They are quick to change.
A
B
C
D
Why do business cycle fluctuations typically arise?
The production process takes longer than expected.
The movement in stock prices is less than expected.
Actual supply ends up being lower or higher than expected.
Actual demand ends up being lower or higher than expected.
Inventories are useful because they can ______.
increase or decrease in periods when demand is unexpectedly high or low
remain constant in periods when demand is unexpectedly high or low
increase or decrease in periods when demand is constant
In the short run, as a result of inflexible prices, economies are forced to respond to demand shocks primarily through changes in ______ and ______.
A. output; employment
B. output; investment
C. employment; prices
D. output; prices
A
B
C
D
Which of the following are factors that increase short-run price stickiness?
Consumers preferring stable prices
Firms' fear of price wars
Lower profits for firms
Collusion between rivals
Companies are able to keep outputs of a product at an optimal level, even when the level of demand rises and falls, by maintaining a(n) (a) of the product.
A fear of "price wars" is not one factor that increases short-run price stickiness.
Many firms that do not change their prices immediately after a change in demand will eventually do so primarily to ______.
help equalize supply with demand
introduce new products
avoid government regulation
meet employee expectations
