Reference no: EM133078915
1. What is the difference between financial investment and economic investment?
A. Economic investment is adjusted for inflation; financial investment is not.
B. There is no difference between the two.
C. Financial investment refers to the purchase of assets for financial gain; economic investment refers to the purchase of newly created capital goods.
D. Financial investment refers to the purchase of financial assets only; economic investment refers to the purchase of any new or used capital goods.
2. Because prices change too slowly in the short run and as a result, they do not quickly equalize the quantity demanded and quantity supplied of goods and services, the short-run response of the economy to a demand shock is through:
A. changes in prices rather than through changes in employment.
B. changes in output and employment levels rather than through changes in prices.
C. changes in output but not in the employment.
D. changes in employment but not in output.
3. If current prices are used to calculate the value of total output produced by a country during a specific period of time, the result is called:
A. constant dollar GDP.
B. real GDP.
C. nominal GDP.
D. full employment GDP.
4. Modern economic growth refers to the idea of experiencing:
A. an increase in output per person as compared to an increase in output.
B. an increase in population at a faster rate than an increase in output.
C. an increase in output as compared to an increase in output per person.
D. an increase in population at the same rate as the increase in output.
5. To keep track of long-run growth and short-run fluctuations, economists will look at statistics such as:
A. inflation expected rate of returns on investments.
B. stock market prices only.
C. real and nominal GDP, unemployment and inflation rates.
D. interest rate and, stock market prices.
6. The official unemployment rate:
A. reveals people over 21 years of age who are currently discouraged and are not looking for a job.
B. is the percentage of the total population which is not working.
C. is the percentage of the labour force which is working part-time.
D. is the percentage of the labour force which is unemployed.
7.In the short run, the prices of goods and services are:
A. sticky.
B. lower than those in the long run.
C. higher than those in the long run.
D. flexible.
8. The phase of the business cycle in which real domestic output declines is called:
A. an expansion.
B. a recession.
C. the trough.
D. the peak.
9. According to the economists, different kinds of shocks to the economy could be responsible for the variations in real output and employment over time. These shocks include:
A. the changes in the population.
B. the changes in the standards of living.
C. the changes in population, innovations and money supply.
D. the changes in the level of total spending, productivity, irregular innovations and money supply.
10. In an economy, 35 million workers are employed out of a labour force of 50 million and a total population of 70 million. The unemployment rate is:
A. 30 percent.
B. 25 percent.
C. 50 percent.
D. 15 percent.
11. A nation has a population of 260 million people. Of these, 60 million are retired, in the military, in institutions, or under 15 years old. There are 188 million who are employed. What is the unemployment rate?
A. 6 percent
B. 27 percent
C. 4 percent
D. 9 percent
12.The unemployment rate in an economy is 7.5 percent. The total population of the economy is 250 million and the size of the civilian labour force is 180 million. The number of employed workers in this economy is:
A. 15.7 million.
B. 166.5 million.
C. 174.6 million.
D. 13.5 million.
13.Suppose there are 10 million part-time workers and 90 million full-time workers in an economy. Five million of the part-time workers switch to full-time work. We can conclude that:
A. the official unemployment rate will fall.
B. the size of the labour force will increase.
C. the official unemployment rate will rise.
D. the official unemployment rate will remain unchanged.
14. Cyclical unemployment is a consequence of:
A. technological change.
B. a decline in aggregate spending.
C. the everyday dynamics of a free labour market.
D. the decreasing relative importance of goods and the increasing relative importance of services in our economy.
15. If the consumer price index was 170 in one year and 180 in the next year, then the rate of inflation from one year to the next was approximately:
A. 7.2 percent.
B. 5.9 percent.
C. 5.3 percent.
D. 5.5 percent.
16. If the consumer price index falls from 120 to 116 in a particular year, the economy has experienced:
A. inflation of 4 percent.
B. inflation of 3.33 percent.
C. deflation of 4 percent.
D. deflation of 3.33 percent.