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PERSONAL FINANCE & ECON: Unit 3 Test Review Flashcards | StudBud
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PERSONAL FINANCE & ECON: Unit 3 Test Review
PERSONAL FINANCE & ECON: Unit 3 Test Review
30 terms
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StudBud Administration
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GDP, Inflation, Unemployment, Business Cycles and AS &AD
Flashcards
30 cards
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Questions
30
Answers
1
If the CPI rose from 120 to 130 in a year, the annual inflation rate would be:
9%
260%
10%
130%
2
A lifeguard would most likely experience Which type of unemployment?
Structural
Technological
Frictional
Seasonal
3
What does the foreign sector of the economy represents?
exports minus imports
exports only
exports plus imports
imports only
4
Which of the following is an example of structural unemployment?
someone whose job skills do not match the economy’s needs
someone between jobs or entering the work force
someone out of work due to a change in the business cycle
someone out of work due to a seasonal downturn in business
5
Which theory (or cause) of inflation says there are increasing prices of producer inputs
demand-pull
cost-push
wage-price spiral
excessive monetary growth
6
Would the following be INCLUDED or EXCLUDED from GDP and why? Flowers I grow for my own use.
excluded to avoid double counting.
excluded because it is an intermediate good.
excluded because no market transaction occurs.
included because it reflects production.
7
How will the following affect the AS/AD curve? The government increases expenditures.
The AD curve will shift to the right
The AD curve will shift to the left
The AS curve will shift to the left
The AS curve will shift to the right
8
cause of inflation where all sectors of economy are trying to buy > the economy can produce
cost- push
demand-pull
wage-price spiral
excessive monetary growth
9
when a fundamental change in the economy reduces the demand for workers and their skills
seasonal unemployment
technological unemployment
structural unemployment
cyclical unemployment
10
What do economists use GDP per Capita to measure?
total dollar value of all final goods and services
standard of living
national income
net exports
11
Why would the sale of something old not be counted in GDP?
no enough money is exchange
no new wealth is created
the transaction is private
the sale is not recorded
12
When will inflation most likely occur?
taxes are increased
the government reduces spending.
full employment exists.
consumers are saving more and spending less.
13
Answer the question below....
demand-pull
excessive monetary growth
wage-price spiral
cost push
14
When Apple buys a shipment of aluminum it is considered to be
a final sale
an intermediate product
a secondhand item
a nonmarket transaction
15
Would people who previously borrowed be helped or hurt during unexpected inflation? Why?
helped -- they repay loans with cheaper dollars
hurt -- they repay loans after higher prices erode income
hurt -- should repay loans as quickly as possible
hurt -- as lenders become more eager to make loans.
16
This is the total amount of goods and services produced throughout the economy
demand
aggregate demand
aggregate supply
supply
17
What is the term for the quality of life based on possession of necessities and luxuries?
standard of living
wealth
conspicuous consumption.
income
18
When you compare real GDP from one time period to another time period you can measure the
inflation rate.
consumer price index.
economic growth rate.
unemployment rate.
19
What is the immediate effect of inflation?
greater spending by all income groups
prosperity of people on fixed incomes.
decline in purchasing power of the dollar
increased value of money
20
When production costs rise due to a rise in energy prices, how will AD/AS be affected?
The AS curve will shift to the left
The AD curve will shift to the right
The AS curve will shift to the right
The AD curve will shift to the left
21
How do you calculate GDP per Capita?
multiplying GDP by total population
dividing GDP by total population
subtracting net exports from GDP.
$ value of all final goods & services produced in the nation
22
People on fixed incomes during a period of inflation experience
a decline in purchasing power
their money buying more
no difference in spending power
the ability to afford more entertainment
23
A person who does a project at home instead of hiring it out takes part in
the underground economy
stimulating GDP
a nonmarket transaction.
reducing GDP
24
We converting statistical series to real terms (real GDP, for example) because the adjustment
removes the problem of unemployment
is easy to do
removes the distortions caused by inflation
makes the statistical series seem to grow faster
25
Based on the graph, what is the approximate GDP in billions?
$1691 billion
$1642 billion
$1053 billion
$1740 billion
26
Which of the following is a final good or service?
A bicycle bought for a delivery person
a car wash
groceries purchased by Publix
motorcycle tires bought by Harley
27
One reason unemployment is understated is because it includes
homemakers without income.
retirees on pensions.
part-time jobs at minimum wage.
students in secondary schools.
28
To calculate the price index you include all of the following statements EXCEPT:
mrkt bskt is used to represent purchases over time
make up of mkt bskt is adj yearly to accommodate new product
cost of initial mkt bskt is assigned arbitrary # like 100%
29
One benefit of economic growth is
an increase in the standard of living.
an increase in the role of government.
decreased foreign trade.
less white-collar crime.
30
Which is more systematic or predictable?
business cycles
business fluctuations
