Macroeconomics Review

Question 1

During a recession workers lose their jobs because of decreased consumer spending. This is ___

Accepted Answer

cyclical unemployment

Question 2

To fight inflation the government will..

Accepted Answer

Increase taxes and decrease spending.

Question 3

What can the U.S. government do to help decrease the unemployment rate?

Accepted Answer

Decrease taxes and increase spending

Question 4

The main responsibilities of the Fed are ___.

Accepted Answer

Control the money supply and regulate banks.

Question 5

What would the Federal Reserve use to fight inflation?

Accepted Answer

Tight money policy

Question 6

20 million unemployed workers out of a workforce of 100 million, the unemployment rate would be

Accepted Answer

20%

Question 7

GDP has been growing slower than the population. What should the Fed do?

Accepted Answer

Tight money policy

Question 8

The power of the government to tax and spend is called:

Accepted Answer

fiscal policy

Question 9

The Federal Reserve uses what type of policy to control the supply of money?

Accepted Answer

Monetary policy

Question 10

What does CPI stand for?

Accepted Answer

Consumer Price Index

Question 11

Which will lead to an increased national debt?

Accepted Answer

Increased deficit spending

Question 12

The downward side of the business cycle is the ___.

Accepted Answer

recession

Question 13

If you are replaced by a machine, which type of unemployment are you suffering?

Accepted Answer

structural

Question 14

The Board of Governors control ___.

Accepted Answer

Fed

Question 15

If both unemployment and inflation are high, what is the economic condition?

Accepted Answer

stagflation

Question 16

What could have caused a shift in aggregate demand to the left?

Accepted Answer

The economy is in a recession..

Question 17

If people spend less, what can we expect to happen to price and employment levels?

Accepted Answer

prices will decrease and unemployment will increase

Question 18

What is the total dollar value of all final products produced in a country in one year?

Accepted Answer

GDP

Question 19

What happens in July and January to make the CPI increase?

Accepted Answer

Heating and cooling costs increase

Questions 19