Econ Chapter 13 Test (Lesson Quizzes)

D.market basket.

A representative selection of commonly purchased goods and services used by consumers is called the A.producer price index (PPI). B.base year. C.consumer price index (CPI). D.market basket.

C.demand-pull inflation.

All sectors in the economy try to buy more goods and services than the economy can produce. The result is A.cost-push inflation. B.hyperinflation. C.demand-pull inflation. D.creeping inflation.

A.an econometric model.

GDP = C + I + G + (X - M) is an example of A.an econometric model. B.a leading economic indicator. C.a trend line model. D.a business fluctuation.

A.It was designed to help prevent working people from getting exploited by employers.

How did the establishment of a minimum wage help employees? A.It was designed to help prevent working people from getting exploited by employers. B.It was designed to help people provide for their own retirement. C.It was designed to help people who were temporarily out of work. D.It was designed to help people who wanted to own stocks.

B.People hold onto their money longer and don't buy things, causing jobs to be lost.

How does economic uncertainty lead to job loss? A.People don't trust the success of their companies, so they quit their jobs. B.People hold onto their money longer and don't buy things, causing jobs to be lost. C.People don't concentrate at work because of financial stress, and lose their jobs. D.A, B, and C

B.The total value of the items in the market basket makes up the price level.

How is a market basket used to measure the price level? A.The price level measures the value of the market basket. B.The total value of the items in the market basket makes up the price level. C.A price index serves as the point of comparison for other years in a market basket. D.A price index provides a representative collection of goods and services used to compile a market basket.

A.Divide the annual increase in the CPI, 10, by the beginning value of the CPI, 200, to get .05 or 5%.

How would you compute the annual rate of inflation if the CPI was 200 in January of one year and 210 exactly 12 months later? A.Divide the annual increase in the CPI, 10, by the beginning value of the CPI, 200, to get .05 or 5%. B.Multiply the annual change in the CPI, 10, by the initial CPI, 200, and then divide by the new CPI, 210, to get 9.5%. C.Subtract the smaller CPI from the larger and then divide by two to get 5%. D.Both A and C computations are correct.

D.trend line.

If periods of expansion and recession did not occur, the economy would follow a steady growth path called a A.business cycle. B.trough. C.peak. D.trend line.

A.unlikely; reforms

Most economists today think that it would be _____ for another Great Depression to occur because of _____ made during and after the 1930s. A.unlikely; reforms B.likely; reforms C.unlikely; investment spending D.likely; government spending

A.Recession and expansion

What are the two distinct phases of a business cycle? A.Recession and expansion B.Peak and trough C.Recession and trough D.Expansion and peak

B.Housing market collapse

What caused the Great Recession of 2008-2009? A.Stock market crash B.Housing market collapse C.Increase in oil prices D.Change in fiscal

D.A, B, and C

What community problems are made worse by economic instability? A.Crime B.Poverty C.Marital instability D.A, B, and C

C.Changes in real GDP

What does the leading economic index (LEI) forecast? A.Changes in minimum wage B.Changes in the length of a workweek C.Changes in real GDP D.Changes in stock prices

A.Deflation

What is a decrease in the general level of the prices of goods and services? A.Deflation B.Stagflation C.Hyperinflation D.Creeping inflation

C.A period of stagnant economic growth coupled with inflation

What is stagflation? A.A rise in the general level of prices of goods and services B.A decrease in the general level of the prices of goods and services C.A period of stagnant economic growth coupled with inflation D.A relatively low rate of inflation, usually 1 to 3 percent annually

B.Unemployment caused by a change in the economy that reduces demand for workers

What is structural unemployment? A.Unemployment directly related to swings in the business cycle B.Unemployment caused by a change in the economy that reduces demand for workers C.Unemployment caused by technological developments or automation D.Unemployment caused by workers changing jobs or waiting to go to new ones

B.Business cycles are systematic changes in real GDP, and business fluctuations are changes that occur on an irregular basis

What is the difference between business cycles and business fluctuations? A.Business cycles are changes in real GDP that occur on an irregular basis, and business fluctuations are systematic changes. B.Business cycles are systematic changes in real GDP, and business fluctuations are changes that occur on an irregular basis. C.Business cycles only have expansions, and business fluctuations only have contractions. D.Business cycles only have contractions, and business fluctuations only have expansions.

D.Creeping inflation is a relatively low rate of inflation, usually 1 to 3 percent annually. Hyperinflation is an abnormal inflation in excess of 500 percent per year.

What is the difference between creeping inflation and hyperinflation? A.There is no difference. B.Hyperinflation is a relatively low rate of inflation, usually 1 to 3 percent annually. Creeping inflation is an abnormal inflation in excess of 500 percent per year. C.Hyperinflation is a relatively low rate of inflation, usually 1 to 3 percent annually. Creeping inflation is a period of stagnant economic growth coupled with inflation. D.Creeping inflation is a relatively low rate of inflation, usually 1 to 3 percent annually. Hyperinflation is an abnormal inflation in excess of 500 percent per year.

A.Frictional unemployment is caused by workers changing jobs or waiting to get new ones. Technological unemployment is caused by hi-tech changes or automation that make some jobs obsolete.

What is the difference between frictional unemployment and technological unemployment? A.Frictional unemployment is caused by workers changing jobs or waiting to get new ones. Technological unemployment is caused by hi-tech changes or automation that make some jobs obsolete. B.Technological unemployment is dictated by the workers' actions while frictional unemployment is out of their control. C.Both frictional and technological unemployment are dictated by the workers' needs, but the latter happens in the tech industry. D.Both frictional and technological unemployment are out of the workers' control, but the latter occurs in the tech industry.

D.Cyclical unemployment takes place over a business cycle, while seasonal unemployment takes place every year.

What is the difference between seasonal and cyclical unemployment? A.Cyclical unemployment takes place because of changes in technology, while seasonal unemployment takes place every year. B.Cyclical unemployment changes every three years, while seasonal unemployment changes every year. C.Cyclical unemployment is caused by changes that prevail during certain times of the year, while seasonal employment changes once a year. D.Cyclical unemployment takes place over a business cycle, while seasonal unemployment takes place every year.

B.A measure of consumer discomfort found by adding the unemployment rate to the rate of inflation

What is the misery index? A.A measure of consumer anxiety that adds the length of time a worker is unemployed to the unemployment rate B.A measure of consumer discomfort found by adding the unemployment rate to the rate of inflation C.A measure of consumer distress that multiplies the rate of inflation by the rate of unemployment D.A measure of consumer uneasiness found by adding the number of labor force dropouts to the number of unemployed

A.Debtors benefit from inflation.

What is the relationship between the terms inflation and debtors? A.Debtors benefit from inflation. B.Debtors benefit from deflation. C.There is no connection between debtors and inflation. D.There is an inverse connection between debtors and inflation.

B.The number of unemployed people expressed as a percentage of the civilian labor force

What is the unemployment rate based on? A.The number of unemployed people expressed as a percentage of all people over sixteen B.The number of unemployed people expressed as a percentage of the civilian labor force C.The number of unemployed people expressed as a percentage of the population D.The number of unemployed people expressed as a percentage of taxpayers

B.The consumer price index (CPI)

What statistical series is used to compute inflation? A.The leading economic price index B.The consumer price index (CPI) C.The monthly market basket D.The producer price index (PPI)

B.Changes in econometric models

Which of these is NOT a cause of the business cycle? A.Speculation and bubbles B.Changes in econometric models C.Changes in investment spending D.External shocks

B.Structural unemployment

Which type of unemployment did Congress's decision to close military bases in the 1990s contribute to? A.Technological unemployment B.Structural unemployment C.Cyclical unemployment D.Frictional unemployment

D.People who have been unemployed and job-searching for twenty-seven weeks or more

Who are the long-term unemployed? A.People who have been unemployed for five years B.Teenagers who have been unemployed for a year or more C.People who are not searching for a job D.People who have been unemployed and job-searching for twenty-seven weeks or more

A.People who are sixteen and older who are employed or looking for a job

Who does the civilian labor force include? A.People who are sixteen and older who are employed or looking for a job B.People sixteen and older who are confined to a mental health facility C.People eighteen and older who are in the military D.A and C

B.Creditors

Whom does inflation hurt the most? A.Producers B.Creditors C.Consumers D.Debtors

C.Many events that affect the business cycle are unexpected and naturally occurring, such as shortages or surpluses, changes in investment spending, and speculation.

Why are ups and downs in the business cycle normal? A.Many events that affect the business cycle are expected and do not occur naturally, such as shortages or surpluses, changes in investment spending, and speculation. B.Many events that affect the business cycle are planned by the government, such as shortages or surpluses, changes in investment spending, and speculation. C.Many events that affect the business cycle are unexpected and naturally occurring, such as shortages or surpluses, changes in investment spending, and speculation. D.Many events that affect the business cycle are scheduled by employers, such as shortages or surpluses, changes in investment spending, and speculation.