|
1. What measures the value of all the final goods and services produced within a country’s borders?
a. government spending
b. gross domestic product
c. gross national product
d. net national product |
| Answer: b |
|
|
|
|
2. __________is the value of household spending on goods and services.
a. Consumption
b. Inventory
c. Investment
d. Wealth |
| Answer: a |
|
|
|
|
3. What is inflation?
a. a drop in GDP of at least 10 percent and three years of GDP declines
b. a general and gradual rise in the prices of goods and services
c. a growth in GDP of at least 10 percent and three years of GDP inclines
d. negative growth for at least two consecutive quarters |
| Answer: b |
|
|
|
|
4. Who is least likely to benefit from inflation?
a. borrower’s of money
b. people on fixed incomes
c. retail businesses
d. sellers of goods and services |
| Answer: b |
|
|
|
|
5. What is a business cycle?
a. the business growth in one year
b. the growth small business to a large business
c. the periodic involvement of government regulations
d. up-and-down fluctuations in GDP |
| Answer: d |
|
|
|
Gross domestic product (GDP) is composed of consumption, investment, government spending and _____.
a)net imports
b)net exports
c)net products
d)individual spending
|
| Answer: b |
|
|
|
How much of economic activity is composed of consumption?
a)70 percent
b)30 percent
c)67 percent
d)45 percent
|
| Answer: a |
|
|
|
Why are imports subtracted from and exports added to GDP?
a)Imports often cost more than exports make, and GDP does not want to reflect that.
b)Exports are sent out and GDP want to know how much a country is making from their own products.
c)Imports are bad for an economy and so GDP does not figure them into calculations in order to give the healthiest assessment of a country’s economy.
d)GDP is a focus on production within the borders of a country, and thus does not look to things made outside of the country.
|
| Answer: d |
|
|
|
Why do some people criticize GDP as a poor economic health monitor?
a)Many people think that GDP is a cultural relativist figure and want it to be gone.
b)GDP cannot account for things outside of its equation. Thus it cannot measure the impact that education or health or natural disasters can have on an economy.
c)GDP only looks to the government for a measure of the economy’s health, and not to the performance of individuals and corporations within that country.
d)GDP has yet to be criticized for its poor assessment of economies.
|
| Answer: b |
|
|
|
________ accounts for the decline in value over time as a result of use.
a)Inflation
b)Depreciation
c)Interest
d)Appreciation
|
| Answer: b |
|
|
|
What is unemployment?
a)It is the percentage of the able and willing workforce of a population that is without work, but looking for employment.
b)It is the total number of unemployed peoples in a country.
c)It is the rough estimate of how many people do not have a job but have asked for one.
d)It is the estimate of people who are able, but not willing, to work.
|
| Answer: a |
|
|
|
What type of interest rates are used to reduce high inflation?
a)higher interest rates
b)lower interest rates
c)fixed interest rates
d)annually accruing interest rates
|
| Answer: a |
|
|
|
Why does inflation often hurt the consumer and not the business?
a)Inflation is set by the businesses and thus cannot hurt them.
b)While the consumer has to pay more, the extra revenue from inflation is sent to the government, so business are neither hurt not helped.
c)Inflation does not actually hurt the consumer because they will demand less and the price will soon drop for the goods they need.
d)When the consumer has to pay more because of inflation, the business will make more.
|
| Answer: d |
|
|
|
A prolonged recession is known as a(n) _____.
a)bear market
b)inflationary gap
c)depression
d)bull market
|
| Answer: c |
|
|
|
Why are flat currencies used?
a)Governments simply trust flat currencies more.
b)When flat currencies are used, economists believe that currency will remain stable and use that assumption to save money to pay off debts over time.
c)They are unstable currencies and governments take the chance that inflation will increase and diminish the value of their reserves.
d)Governments and economists prefer the always-changing nature of flat currencies and have had more success with them.
|
| Answer: b |
|
|
|
Gross domestic product (GDP) is composed of consumption, investment, government spending and ¬¬¬¬¬_____.
a)net imports
b)net exports
c)net products
d)individual spending
|
| Answer: b |
|
|
|
How much of economic activity is composed of consumption?
a)70 percent
b)30 percent
c)67 percent
d)45 percent
|
| Answer: a |
|
|
|
Why are imports subtracted from and exports added to GDP?
a)Imports often cost more than exports make, and GDP does not want to reflect that.
b)Exports are sent out and GDP want to know how much a country is making from their own products.
c)Imports are bad for an economy and so GDP does not figure them into calculations in order to give the healthiest assessment of a country’s economy. |
| Answer: d |
|
|
|
Why do some people criticize GDP as a poor economic health monitor?
a)Many people think that GDP is a cultural relativist figure and want it to be gone.
b)GDP cannot account for things outside of its equation. Thus it cannot measure the impact that education or health or natural disasters can have on an economy.
c)GDP only looks to the government for a measure of the economy’s health, and not to the performance of individuals and corporations within that country.
d)GDP has yet to be criticized for its poor assessment of economies. |
| Answer: b |
|
|
|
_____ accounts for the decline in value over time as a result of use.
a)Inflation
b)Depreciation
c)Interest
d)Appreciation
|
| Answer: b |
|
|
|
What is unemployment?
a)It is the percentage of the able and willing workforce of a population that is without work, but looking for employment.
b)It is the total number of unemployed peoples in a country.
c)It is the rough estimate of how many people do not have a job but have asked for one.
d)It is the estimate of people who are able, but not willing, to work.
|
| Answer: a |
|
|
|
What type of interest rates are used to reduce high inflation? a)Higher interest rates b)Lower interest rates c)Fixed interest rates d)Annually accruing interest rates
|
| Answer: a |
|
|
|
Why does inflation often hurt the consumer and not the business?
a)Inflation is set by the businesses and thus cannot hurt them.
b)While the consumer has to pay more, the extra revenue from inflation is sent to the government, so business are neither hurt not helped.
c)Inflation does not actually hurt the consumer because they will demand less and the price will soon drop for the goods they need.
d)When the consumer has to pay more because of inflation, the business will make more. |
| Answer: d |
|
|
|
A prolonged recession is known as a(n) _____.
a)bear market
b)inflationary gap
c)depression
d)bull market
|
| Answer: c |
|
|
|
Why are flat currencies used?
a)Governments simply trust flat currencies more.
b)When flat currencies are used, economists believe that currency will remain stable and use that assumption to save money to pay off debts over time.
c)They are unstable currencies and governments take the chance that inflation will increase and diminish the value of their reserves.
d)Governments and economists prefer the always-changing nature of flat currencies and have had more success with them.
|
| Answer: b |
|
|
|
