Deck 1: A Tour of the World

Question 1

Inflation represents

A)an increase in output.
B)an increase in the aggregate price level.
C)an increase in the unemployment rate.
D)a recession.

Answer 1

B

Question 2

At what point could the Euro be used as currency?

A)January 1,1998
B)January 1,1999
C)January 1,2000
D)January 1,2002

Answer 2

D

Question 3

In 2010,the unemployment in the U.S.was

A)5%.
B)11%.
C)9.6%.
D)4.6%.

Answer 3

C

Question 4

The most recent financial crisis started in

A)stock market.
B)bond market.
C)foreign exchange market.
D)housing market.

Question 5

Briefly explain the disagreement among economists about how and when to reduce U.S.budget deficit.

Question 6

Discuss the types of policies that could be implemented to reduce European unemployment.

Question 7

Which of the following explains the relatively high growth rate of output in China since 1980?

A)accumulation of capital
B)technological progress
C)a transition from central planning to a market economy
D)all of the above

Question 8

The standard of living typically refers to

A)the rate of unemployment.
B)output per capita.
C)wealth per capita.
D)all of the above

Question 9

How many countries are in the European Union?

A)27
B)6
C)21
D)17

Question 10

In 2010,output per capita in China was approximately equal to

A)$2,100.
B)$4,300.
C)$22,100.
D)$32,100.

Question 11

How many countries are in the Euro area?

A)17
B)27
C)21
D)11

Question 12

Briefly explain why the decline in housing prices led to a major financial crisis.

Question 13

Most economists believe that the source of European high unemployment in the past two decades is

A)labor market institutions.
B)tight monetary policy.
C)tight fiscal policy.
D)financial crisis.

Question 14

Which of the following countries had the lowest level of output per capita in 2010?

A)Spain
B)France
C)Italy
D)German

Question 15

Economists have suggested that the relatively higher unemployment in Europe has been caused by which of the following?

A)relatively high unemployment benefits
B)relatively high level of worker protection
C)inadequate macroeconomic policies
D)increased labor costs
E)all of the above

Question 16

In 2010 ,the U.S.budget deficit as a percentage of U.S.output was approximately equal to

A)1.7%.
B)9%.
C)6%.
D)16.2%.

Question 17

Discuss what is meant by labor market rigidities and explain how they might cause the relatively high unemployment in Europe.

Question 18

In 2010,output per capita in the United States was approximately equal to

A)$15,500.
B)$25,800.
C)$43,800.
D)$47,300.

Question 19

Between 2000 and 2010,the annual rate of output growth in China was approximately equal to

A)2%.
B)5%.
C)10%.
D)20%.

Question 20

Explain how the financial crisis turned into a major economic crisis.

Question 21

Explain why the U.S.crisis became a world crisis.

Question 22

What problems remain in advanced countries after the crisis?

Question 23

Discuss some of the potential benefits and costs of the adoption of the Euro.

Question 24

What are the two primary sources of economic growth in China since 1980?

Question 25

In addition to capital accumulation and technological progress,what are some of the other possible explanations for recent output growth in China?