What does the Consumer Price Index (CPI) represent?

The average price of a “basket” of goods and services bought regularly

Which not one of the ways GDP matches onto the business cycle?

Trough = highest level of GDP, right before it increases

What is GDP per Capita?

Gross Domestic Product divided by the total population of a country

What does the official unemployment rate measure?

The percentage of the labor force not working but seeking employment

What characterizes hyperinflation?

A rapid, drastic increase in prices (50% growth in one month)

What is the main purpose of economic relief programs according to economists?

Providing basic standard of living and opportunity for improvement

What is the definition of poverty?

Having an income below the required threshold

The US GDP only counts what type of products?

Only brand new products produced in the United States

What causes cost-push inflation?

An increase in the cost to produce goods

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Evaluating the Economy Test Review.

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Answers

1
What does the Consumer Price Index (CPI) represent?
The total value of goods and services produced in an economy
The stock market index of consumer goods
The rate of inflation in a specific industry
The average price of a “basket” of goods and services bought regularly
2
Which not one of the ways GDP matches onto the business cycle?
Contraction period = decreasing quarters of GDP
Trough = highest level of GDP, right before it increases
Expansion period = increasing quarters of GDP
Peak = highest level of GDP, right before it decreases
3
What is GDP per Capita?
Gross Domestic Product divided by the total population of a country
The average income of households in a country
The total value of all final goods & services produced within a country
The value of goods & services produced in a country divided by its land
4
What is a person who is not working but actively searching for work referred to as?
Employed
Encouraged worker
Discouraged worker
Unemployed
5
What does the official unemployment rate measure?
The total number of people not working, regardless of job-seeking status
The total number of people not working, including retirees
The % of the population not working, including those who choose not to work
The percentage of the labor force not working but seeking employment
6
Which of the 5 factors that make up the US GDP is the largest percentage of it?
Government Spending
Investment
Consumption
Production
7
What is the highest point of the business cycle before it comes back down referred to as?
Expansion
Peak
Contraction
Trough
8
True or False charity is done through the government.
True
False
9
Which type of unemployment is considered the bad type of unemployment in an economy?
Frictional
Structural
Cyclical
Seasonal
10
Jimmy got let go from his job at the Christmas factory after December 25th. What type of unemployment is this?
Cyclical
Seasonal
Frictional
Structural
11
What is the downturn in the business cycle referred to as?
Trough
Contraction
Peak
Expansion
12
Which factor does NOT contribute to poverty in the United States?
High wages
Childhood poverty
Lack of education
Single-parent households
13
What characterizes hyperinflation?
A decrease in prices followed by stability
Stability in prices
A gradual increase in prices over time
A rapid, drastic increase in prices (50% growth in one month)
14
What is inflation?
A general rise in prices
No change in prices
Stability in prices
A general decrease in prices
15
What serious problems can arise if prices increase but wages do not?
Economic stability
Hyperinflation
Increased consumer spending
Stagflation
16
What is the main purpose of economic relief programs according to economists?
Providing basic standard of living and opportunity for improvement
Reducing crime rates
Increasing tax revenue
Eradicating poverty entirely
17
Jill recently got let off because the company has begun automating their assembly lines. What type of unemployment is it
Seasonal
Structural
Frictional
Cyclical
18
What is the definition of poverty?
Having insufficient education
Residing in a high-crime area
Living in a single-parent household
Having an income below the required threshold
19
The US GDP only counts what type of products?
Only brand new products produced in the United States
Only brand new products bought and sold in the US
All products produced and sold in the United States
All products bought and sold in the US
20
What causes cost-push inflation?
A decrease in wages
A decrease in raw material prices
An increase in the cost to produce goods
A decrease in the cost of production

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