Chapter 2 economic activity
The recurring ups and downs of GDP in an economy is called A. Bond market B. Stock Market C. Business Cycle D. Money cycle
C. Business Cycle
GDP per capita is calculated by A. Dividing GDP by the consumer price index B. Multiplying GDP by the total population C. Dividing GDP by the total population D. Multiplying GDP by the consumer price index
C. Dividing GDP by the total population
If you want to save money at a savings institution, you would be most interested in the ________. A. Discount rate B. T-bill rate C. Certificate of deposit rate D. Prime rate
C. certificate of deposit rate
A _______________ occurs when a government spends less than it takes in A. Budget deficit B. Budget shortage C. Budget over- run D. Budget surplus
D. Budget surplus
When you purchase a corporate bond, you become one of the corporations A. Owners B. Equity holders C. Borrowers D. Creditors
D. Creditors
______________ is a period in which demand begins to decrease, businesses lower production, unemployment begins to rise, and GDP growth slows for two or more quarters of the calendar year. A. Depression B. Deflation C. Recovery D. Recession
D. Recession
There has never been a true depression in the United States. T or F
F
Without personal saving, businesses could not carry out capital projects. T or F
F
Which economic measure is the most widely used measure of national output A. Retail sales B. CPI C. Unemployment rate D. GDP
GDP
Which economic measure is the monthly measure of all sales of durable and nondurable goods bought by consumers A. Unemployment rate B. GDP C. CPI D. retail sales
Retail sales
Deflation has occurred in the United States. T or F
T
If intermediate goods were counted as part of GDP, the value of these goods would be counted twice T or F
T
Consumer debt includes each of the following except A. Unspent consumer income B. Unpaid credit card balances C. Auto loans D. Home mortgages
A. Unspent consumer income
Which economic measure compares the prices of a group of selected items each year to some earlier year? A. Unemployment rate B. Consumer Price Index (CPI) C. Retail sales D. GDP
B. Consumer Price Index
All of the following can increase productivity except A. Better training for workers B. Increased wages for workers C. Improved management techniques D. Improved technology
B. Increased wages for workers
The __________ is the interest rate that banks make available to their best business customers A. Corporate bond rate B. Prime rate C. Discount rate D. Mortgage rate
B. Prime rate
A ________ represents a unit of ownership in a corporation A. certificate of deposit B. Mortgage C. Share of corporate stock D. Corporate bond
C. Share of corporate stock
Debt is harmful to a company T or F
F
Which economic measure is the total dollar value of all final goods and services produced each year in a country? A. CPI B. unemployment rate C. Retail sales D. GDP
GDP
A bond represents a debt for an organization. T or F
T
If the inflation rate was 3 percent in one year, a product that cost $500 at the beginning of the year would cost approximately ________ at the beginning of the next year. A. $515 B. $510 C. $503 D. $ 560
A. $515
GDP is the dollar value of all A. Final goods and services produced in a country during one year B. Intermediate and final goods and services produced in a country during one year C. Goods and services produced in a country during one year D. Final goods and services produced in, or imported to, a country during one year
A. Final goods and services produced in a country during one year
All people above 16 who are actively working or seeking work make up the A. Labor force B. Labor organization C. Creditor pool D. Unemployment rate
A. Labor force
What economic measure is the percentage of people in the labor force who are willing to work looking for work but are unable to find work A. Unemployment rate B. Retail sales C. GDP D. CPI
A. Unemployment rate
The Consumer Price Index (CPI) is a measure of A. Inflation B. Interest rates C. Consumer debt D. Retail sales
A. inflation
