WorksheetsTopic 7 Test Review
Total questions: 30
Worksheet time: 15mins
Name
Class
Date
1.
Characteristics of an economic expansion include all of the following EXCEPT—
a)
GDP increasing
b)
demand increasing
c)
inflation increasing
d)
unemployment increasing
2.
Which of the following would likely accompany economic growth?
a)
increased unemployment
b)
increased productivity
c)
decreased trade
d)
decreased number of small businesses
3.
The four phases of the business cycle are:
a)
expansions, contraction, peak, trough
b)
supply, demand, peak, trough
c)
inflation, deflation, peak, expansion
d)
expansion, demand, peak, supply
4.
During a recession, all of the following are decreasing EXCEPT---
a)
unemployment
b)
demand
c)
GDP
d)
factory orders
5.
A true recession is when the economy experiences _____ consecutive _____ of a decline in real GDP.
a)
3...months
b)
2....quarters
c)
2.....years
d)
2....months
6.
Business investments, interest rate, credit, and consumer confidence, are all things that _____.
a)
cause demand to increase
b)
cause fluctuations in the business cycle
c)
create fear in the working class
d)
cause supply to decrease
7.
What observation is the man in this comic making?
a)
The cost of a Cadillac has increased more than the rate of inflation.
b)
Prices have not changed since he was a young man.
c)
The cost of mail services has increased faster than the cost of cars.
d)
Prices are much higher than they were when he was a young man.
8.
One of the effects that inflation has on the dollar is it
a)
increases the purchasing power
b)
decreases the purchasing power
c)
helps lenders
d)
increases the real wages of the worker
9.
According to this info graphic, increased wages for workers in a fertilizer plant could result in
a)
layoffs of workers in fertilizer plants.
b)
wage increases for workers on farms and in grocery stores.
c)
decreases in the cost of food and farm products.
d)
demands for higher wages in many industries.
10.
Which of the following types of inflation is more harmful to the economy?
a)
cost-push
b)
demand-pull
c)
stagflation
d)
deflation
11.
Demand-pull inflation is caused by too ______ dollars chasing too few _______.
a)
many....people
b)
few...cars
c)
few....animals
d)
many....goods
12.
An example of cost-push inflation is
a)
government deficit spending
b)
minimum wage increase
c)
people boycotting a product
d)
demand increasing for a product
13.
reserve requirement/ open market/ discount rate Choose the BEST category for the list above.
a)
Functions of Financial Institutions
b)
Tools Used to Implement Monetary Policy
c)
Individual Investment Choices
d)
Factors Involved in Consumer
14.
What is the reserve requirement?
a)
the deposits that commercial companies make in banks
b)
the portion of a deposit that a bank must keep on hand
c)
the amount of money a bank has to loan out
d)
the ratio of commercial to personal loans that a bank makes
15.
Which scenario is MOST likely if the reserve requirement is raised?
a)
More money is required to be kept in the Federal Reserve banks to make it available for loans to member banks in poor economic times.
b)
More money is required to be kept in banks to loan out to businesses, so they can invest in their companies.
c)
More money is required to be kept in the Federal Reserve banks, which increases the amount of money in circulation and stimulates the economy.
d)
More money is required to be kept in bank reserves, and less is available to be loaned out to businesses to invest in the economy.
16.
This cartoon is making the point that during a recession
a)
everything looks brighter.
b)
people rediscover romance.
c)
everything gets cut back.
d)
people are satisfied with less.
17.
During a recession, the Federal Reserve bank is likely to
a)
increase the reserve, increase the discount rate, sell on the open market
b)
decrease the reserve, decrease the discount rate, sell on the open market
c)
decrease the reserve, decrease the discount rate, buy on the open market
d)
increase the reserve, increase the discount rate, buy on the open market
18.
What problem is the Federal Reserve Bank trying to maintain during an expansion phase?
a)
demand
b)
inflation
c)
deflation
d)
unemployment
19.
What problem is the Federal Reserve Bank trying to maintain during a contraction phase?
a)
demand
b)
inflation
c)
deflation
d)
unemployment
20.
By decreasing the reserve requirement the Federal Reserve Bank is
a)
increasing the availability of credit
b)
decreasing the availability of credit
c)
decreasing a bank's customer base
d)
increasing a bank's customer base
21.
A person with a graduate degree in psychology who works a part-time job in a coffee shop is
a)
engaged in a nonmarket activity.
b)
a discouraged worker.
c)
underemployed.
d)
fully employed.
22.
Which of the following is an example of seasonal unemployment?
a)
A new type of harvester causes layoffs on farms at harvest time.
b)
An agricultural worker finds work at a department store during the winter holidays.
c)
An agricultural worker has no work from November to March one year.
d)
A worker leaves agriculture but has trouble finding work in manufacturing.
23.
Which of the following is an example of an economic situation that may cause structural unemployment?
a)
A decline in consumer spending
b)
A supply shock
c)
Weather halting construction for the year
d)
The decline of an industry
24.
Andy is a not-so-typical househusband who has spent the past fifteen years raising their boys Aidan, Caleb, and Hudson. Andy and his wife, Colleen, have agreed that the kids are old enough to take care of themselves and that Andy should start job hunting. Andy has some prior experience working as a pinball repairman.
a)
Structural unemployment
b)
Seasonal unemployment
c)
Cyclical unemployment
d)
Frictional unemployment
25.
Pieter, formerly a foreman at Mittal Steel, inc., has been out of work now for ten months. He became expendable the day MS, Inc. installed an industrial robot named Hans. Hans can do the work of twenty, needs no coffee breaks, makes no personal phone calls, seldom gets sick, and never insists on better working conditions.
a)
Structural unemployment
b)
Seasonal unemployment
c)
Cyclical unemployment
d)
Frictional unemployment
26.
The growth of the Internet has caused newspaper circulation to fall. What type of unemployment might this printing press operator face in the future?
a)
frictional unemployment
b)
seasonal unemployment
c)
cyclical unemployment
d)
structural unemployment
27.
When people buy fewer cars, the auto makers don't need as many employees to meet the consumer demand. So as the demand for cars decreases, so does the demand for auto workers. This is an example of
a)
seasonal unemployment
b)
cyclical unemployment
c)
structural unemployment
d)
frictional unemployment
28.
If you graduate from a university, you can’t necessarily expect to find a job straight away which matches your skills. This period of searching for a job is known as
a)
seasonal unemployment
b)
cyclical unemployment
c)
structural unemployment
d)
frictional unemployment
29.
The loss of construction jobs during the 2008 financial crisis is an example of
a)
seasonal unemployment
b)
cyclical unemployment
c)
structural unemployment
d)
frictional unemployment
30.
Which type of unemployment is usually short term and considered normal for an economy to have?
a)
seasonal unemployment
b)
cyclical unemployment
c)
structural unemployment
d)
frictional unemployment
100 %
