GDP= C+I+G+(X-M). Which of the following would be an example of "I" (Investment)?

the purchase of new machines and equipment by a business

Which best describes the fundamental objective of monetary policy?

full-employment and price stability

Which of the following is true?

a budget deficit will increase the national debt

Which of the following is NOT correct about the CPI (Consumer Price Index)?

it can help measure inflation rate

A recession is a decline in...

Real GDP that lasts six months of longer

Which of the following purchases is included in the calculation of GDP?

new harvesting equipment for the farm

Frictional unemployment often occurs when...

people first enter the labor force

What goods are included in the CPI (Consumer Price Index)?

all goods and services typical consumers buy

When the government is running a budget deficit, then...

government expenditures exceed government revenues

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Unit 3: Entrepreneurship and Economic Growth

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Economics Unit 3 Review

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Questions 23

Answers

1
Workers at a steel plant are laid off because the economy is weak. What type of unemployment is this?
Frictional
Full
Cyclical
Structural
2
The market value of all final goods and services produced in the economy in a given year...
national income
gross domestic product
personal income
net national product
3
Very high inflation is referred to as...
hyperinflation
crowding out effect
budget deficit
a balanced budget
4
Joe quits his job at the University of Wisconsin. What type of unemployment is this?
structural
frictional
seasonal
cyclical
5
GDP= C+I+G+(X-M). Which of the following would be an example of "I" (Investment)?
investment by individuals into the stock market
importation of foreign products into the U.S.
the purchase of new machines and equipment by a business
investment by the government into foreign countries
6
Which best describes the fundamental objective of monetary policy?
a balanced budget consistent with full-employment
a rapid pace of economic growth
a money supply which is based on the gold standard
full-employment and price stability
7
Which of the following is true?
a budget deficit will increase the national debt
a budget deficit will reduce the national debt
a balanced budget will increase the national debt
a budget surplus will increase the national debt
8
Monetary policy in the U.S. is the responsibility of which government institution?
The U.S. Treasury
The Office of Management and Budget
The Internal Revenue Service
the Federal Reserve
9
Which of the following is NOT correct about the CPI (Consumer Price Index)?
economists can measure purchasing power
it can measure the quantity of goods an economy is producing
it can help measure inflation rate
it can help to measure changes in the cost of living over time
10
Inflation is a sustained increase in the general level of...
accounts
income
profit
prices
11
A recession is a decline in...
the unemployment rate that lasts six months or longer
potential GDP that lasts six months or longer
Real GDP that lasts six months of longer
the inflation rate that lasts six months or longer
12
Which of the following purchases is included in the calculation of GDP?
1,000 shares of stock
a used economics textbook
a car produced in a foreign country
new harvesting equipment for the farm
13
Unemployment caused by a recession is called...
Natural
Structural
Frictional
Cyclical
14
Frictional unemployment often occurs when...
people lose a job because their skills are no longer needed
people are discriminated against
the economy enters a recession
people first enter the labor force
15
A peak in the business cycle...
is a temporary minimum point
occurs when the unemployment rate is at it's greatest
occurs when the inflation rate is at its lowest
is a temporary maximum point
16
The University of Chicago, a privately owned school, builds a new hospital. How would this be classified in the GDP?
government spending
net exports
consumption
investment
17
The amount of currency (coins and paper money) in circulation is determined by...
Commerical Banks
the U.S. Treasury
voters
the Federal Reserve
18
What goods are included in the CPI (Consumer Price Index)?
all good, not services purchased by consumers
goods and services in the consumption component of GDP
all goods and services typical consumers buy
all goods and services produced in an economy
19
Controlling the money supply to achieve desired macroeconomic goals is called
monetary policy
industrial policy
cyclical policy
fiscal policy
20
When the government is running a budget deficit, then...
the economy must be in a economic boom
the government will pay off the national debt
government revenues exceed government expenditures
government expenditures exceed government revenues
21
In a business cycle, a period from peak to trough may be referred to as...
a recurrence
stagflation
a contraction
an expansion
22
Government spending and revenue collection used to influence the economy is referred to as...
Fiscal policy
Fiscal year
Federal budget
An appropriations bill
23
In the United States today, which of the following functions as the central bank?
The Federal Reserve
The Federal Reserve and Congress
The Federal Reserve Board
There is no central bank in the U.S.

Unit 3: Entrepreneurship and Economic Growth Flashcards | StudBud