Question 1

What are the different types of unemployment?

Accepted Answer

Frictional unemployment refers to indivi

Question 2

Other things unchanged, which of the following would reduce the level of gross domestic product (GDP) in a country?

Accepted Answer

A)  An increase in the country's stock of capital goods. 
B)  An improvement in managerial techniques. 
C)  An increase in the country's population. 
D)  An Increase in the country's investment in human capital. 
A)  An increase in the country's stock of capital goods. 
B)  An improvement in managerial techniques. 
C)  An increase in the country's population. 
D)  An Increase in the country's investment in human capital.

Question 3

During periods of rising inﬂation, there is a transfer of wealth from _____.

Accepted Answer

A)  the government to taxpayers 
B)  the young to the elderly 
C)  the poor to the rich 
D)  lenders to borrowers 
A)  the government to taxpayers 
B)  the young to the elderly 
C)  the poor to the rich 
D)  lenders to borrowers

Question 4

In the UK, the _____ measures the number of people who are eligible and receiving the jobseeker's allowance.

Accepted Answer

A)  natural rate of unemployment 
B)  percentage of working-age population 
C)  labour force participation rate 
D)  claimant count 
A)  natural rate of unemployment 
B)  percentage of working-age population 
C)  labour force participation rate 
D)  claimant count

Question 5

If higher GDP stems from an increase in aggregate demand, then it is likely that:

Accepted Answer

A)  the level of inﬂation will also increase. 
B)  aggregate supply will decrease. 
C)  investments in infrastructure will reduce. 
D)  unemployment rate will also increase. 
A)  the level of inﬂation will also increase. 
B)  aggregate supply will decrease. 
C)  investments in infrastructure will reduce. 
D)  unemployment rate will also increase.

Question 6

The difference between frictional unemployment and cyclical unemployment is that cyclical unemployment is temporary.

Accepted Answer

A) True 
 B)False

Question 7

The Phillips curve suggests that a positive relationship exists between the rate of inﬂation and the rate of unemployment.

Accepted Answer

A) True 
 B)False

Question 8

In the following graph, S and D represent the supply and demand curves respectively, in the labour market. Refer to the graph to answer the question.   The labour union in the market demands that workers should be paid a wage rate of £15. The resulting unemployment is called _____.

Accepted Answer

A)  classical unemployment 
B)  structural unemployment 
C)  cyclical unemployment 
D)  frictional unemployment 
A)  classical unemployment 
B)  structural unemployment 
C)  cyclical unemployment 
D)  frictional unemployment

Question 9

Economic growth that is driven by increases in aggregate demand will lead to increases in inﬂation.

Accepted Answer

A) True 
 B)False

Question 10

Double counting can be avoided by:

Accepted Answer

A)  deducting a double-counting factor from the GNP estimates. 
B)  adding the value of only the intermediate (non-?nal) goods and services produced. 
C)  adding the incremental value added at each stage of production. 
D)  including the value of all output produced in the economy. 
A)  deducting a double-counting factor from the GNP estimates. 
B)  adding the value of only the intermediate (non-?nal) goods and services produced. 
C)  adding the incremental value added at each stage of production. 
D)  including the value of all output produced in the economy.

Question 11

Which of the following statements is true?

Accepted Answer

A)  Higher economic growth is associated with higher levels of carbon-dioxide emissions. 
B)  Other things constant, an increase in the working age population will increase the 
C)  A 10% increase in the level of GDP per capita implies that each individual in the economy earns 10% more. 
D)  An economy that has a higher level of GDP is likely to consume lower levels of energy. 
A)  Higher economic growth is associated with higher levels of carbon-dioxide emissions. 
B)  Other things constant, an increase in the working age population will increase the 
C)  A 10% increase in the level of GDP per capita implies that each individual in the economy earns 10% more. 
D)  An economy that has a higher level of GDP is likely to consume lower levels of energy.

Question 12

What is ?scal drag?

Accepted Answer

Fiscal drag occurs when tax-fr

Question 13

The difference between gross domestic product (GDP) and gross national product (GNP) is that GNP includes _____.

Accepted Answer

A)  net property income from abroad 
B)  depreciation 
C)  subsides and taxes 
D)  consumption and investment 
A)  net property income from abroad 
B)  depreciation 
C)  subsides and taxes 
D)  consumption and investment

Question 14

A sharp rise in fuel prices increases the general price level in an economy. This is an example of:

Accepted Answer

A)  cost push inﬂation. 
B)  demand pull inﬂation. 
C)  stagﬂation. 
D)  deﬂation. 
A)  cost push inﬂation. 
B)  demand pull inﬂation. 
C)  stagﬂation. 
D)  deﬂation.

Question 15

Suppose that the nominal interest rate is constant and the average price level begins to rise. Which of the following is most likely to happen?

Accepted Answer

A)  The real interest rate will fall. 
B)  The level of national output will fall. 
C)  The real interest rate will increase. 
D)  The unemployment rate will increase. 
A)  The real interest rate will fall. 
B)  The level of national output will fall. 
C)  The real interest rate will increase. 
D)  The unemployment rate will increase.

Question 16

If incomes rise by 10% and the government does not lift its tax-free income allowance, individuals will start paying lesser real tax.

Accepted Answer

A) True 
 B)False

Question 17

If the value of the price index was 120 in 2009 and 150 in 2010, then what was the inﬂation rate in 2010?

Accepted Answer

A)  30% 
B)  25% 
C)  20% 
D)  10% 
A)  30% 
B)  25% 
C)  20% 
D)  10%

Question 18

How does ?scal policy differ from monetary policy?

Accepted Answer

Fiscal policy is the use of government s

Question 19

Which of the following is a key monetary policy tool that is used by a country's central bank?

Accepted Answer

A)  Transfer payments 
B)  Interest rates 
C)  Taxation 
D)  Government spending 
A)  Transfer payments 
B)  Interest rates 
C)  Taxation 
D)  Government spending

Question 20

If there is an increase in aggregate supply while aggregate demand remains unchanged, then:

Accepted Answer

A)  the inﬂation rate decreases. 
B)  the equilibrium GDP decreases. 
C)  the standard of living in the economy falls. 
D)  the purchasing power of money decreases. 
A)  the inﬂation rate decreases. 
B)  the equilibrium GDP decreases. 
C)  the standard of living in the economy falls. 
D)  the purchasing power of money decreases.

What are the different types of unemployment?

Other things unchanged, which of the following would reduce the level of gross domestic product (GDP) in a country?

During periods of rising inﬂation, there is a transfer of wealth from _____.

In the UK, the _____ measures the number of people who are eligible and receiving the jobseeker's allowance.

If higher GDP stems from an increase in aggregate demand, then it is likely that:

The difference between frictional unemployment and cyclical unemployment is that cyclical unemployment is temporary.

The Phillips curve suggests that a positive relationship exists between the rate of inﬂation and the rate of unemployment.

In the following graph, S and D represent the supply and demand curves respectively, in the labour market. Refer to the graph to answer the question. The labour union in the market demands that workers should be paid a wage rate of £15. The resulting unemployment is called _____.

Economic growth that is driven by increases in aggregate demand will lead to increases in inﬂation.

Double counting can be avoided by:

Which of the following statements is true?

What is ?scal drag?

The difference between gross domestic product (GDP) and gross national product (GNP) is that GNP includes _____.

A sharp rise in fuel prices increases the general price level in an economy. This is an example of:

Suppose that the nominal interest rate is constant and the average price level begins to rise. Which of the following is most likely to happen?

If incomes rise by 10% and the government does not lift its tax-free income allowance, individuals will start paying lesser real tax.

If the value of the price index was 120 in 2009 and 150 in 2010, then what was the inﬂation rate in 2010?

How does ?scal policy differ from monetary policy?

Which of the following is a key monetary policy tool that is used by a country's central bank?

If there is an increase in aggregate supply while aggregate demand remains unchanged, then:

Economics for Business

Consumers in the Marketplace

Firms in the Marketplace

Markets in Action

Market Structure and Firm Performance

Strategic Rivalry

Growth Strategies

Governing Business

Introduction to the Macroeconomy

Expenditure and Fiscal Policy

Money, Banking and Interest

Inflation, Output and Economic Policy

Supply-Side Policies and Economic Growth

Exchange Rates and the Balance of Payments

Globalization

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Exam 10: Measuring Macroeconomic Variables and Policy Issues

What are the different types of unemployment?

Other things unchanged, which of the following would reduce the level of gross domestic product (GDP) in a country?

During periods of rising inﬂation, there is a transfer of wealth from _____.

In the UK, the _____ measures the number of people who are eligible and receiving the jobseeker's allowance.

If higher GDP stems from an increase in aggregate demand, then it is likely that:

The difference between frictional unemployment and cyclical unemployment is that cyclical unemployment is temporary.

The Phillips curve suggests that a positive relationship exists between the rate of inﬂation and the rate of unemployment.

In the following graph, S and D represent the supply and demand curves respectively, in the labour market. Refer to the graph to answer the question. The labour union in the market demands that workers should be paid a wage rate of £15. The resulting unemployment is called _____.

Economic growth that is driven by increases in aggregate demand will lead to increases in inﬂation.

Double counting can be avoided by:

Which of the following statements is true?

What is ?scal drag?

The difference between gross domestic product (GDP) and gross national product (GNP) is that GNP includes _____.

A sharp rise in fuel prices increases the general price level in an economy. This is an example of:

Suppose that the nominal interest rate is constant and the average price level begins to rise. Which of the following is most likely to happen?

If incomes rise by 10% and the government does not lift its tax-free income allowance, individuals will start paying lesser real tax.

If the value of the price index was 120 in 2009 and 150 in 2010, then what was the inﬂation rate in 2010?

How does ?scal policy differ from monetary policy?

Which of the following is a key monetary policy tool that is used by a country's central bank?

If there is an increase in aggregate supply while aggregate demand remains unchanged, then:

Economics for Business

Consumers in the Marketplace

Firms in the Marketplace

Markets in Action

Market Structure and Firm Performance

Strategic Rivalry

Growth Strategies

Governing Business

Introduction to the Macroeconomy

Expenditure and Fiscal Policy

Money, Banking and Interest

Inflation, Output and Economic Policy

Supply-Side Policies and Economic Growth

Exchange Rates and the Balance of Payments

Globalization

Filters