#1
What does the Consumer Price Index (CPI) measure?
Changes in the prices of a basket of consumer goods and services
Growth rate of a country's economy
Rate of inflation
Unemployment rate
#2
What does the term 'fiscal policy' refer to?
Government's control over the money supply
Government's taxation and spending policies
Central bank's regulation of interest rates
Foreign trade policies
#3
Which of the following is a component of the M1 money supply?
Savings deposits
Currency in circulation
Government bonds
Corporate bonds
#4
What is the role of the Federal Reserve in controlling monetary policy?
Setting fiscal policy
Regulating banks
Controlling government spending
Adjusting interest rates and money supply
#5
What does the term 'inflation' refer to?
A decrease in the general price level of goods and services
An increase in the general price level of goods and services
A decrease in the money supply
An increase in unemployment rate
#6
Which of the following is a lagging indicator of economic performance?
Gross Domestic Product (GDP)
Unemployment rate
Consumer Price Index (CPI)
Corporate profits
#7
What does the term 'GDP per capita' represent?
Total economic output of a country
Average income of individuals in a country
Total government spending
Rate of economic growth
#8
What is the Phillips Curve?
A graphical representation of the relationship between inflation and unemployment
A measure of income inequality
A theory explaining economic fluctuations
A model of international trade
#9
What is the formula for calculating the unemployment rate?
(Number of unemployed workers / Labor force) * 100
(Number of employed workers / Labor force) * 100
(Number of employed workers / Total population) * 100
(Number of unemployed workers / Total population) * 100
#10
Which of the following is a component of the balance of payments?
Gross Domestic Product (GDP)
Net exports
Consumer Price Index (CPI)
Unemployment rate
#11
What does the term 'deflation' mean?
An increase in the general price level of goods and services
A decrease in the general price level of goods and services
An increase in the money supply
A decrease in unemployment rate
#12
What is the purpose of the Federal Open Market Committee (FOMC)?
Regulating international trade
Overseeing fiscal policy
Conducting monetary policy
Setting exchange rates
#13
What is the meaning of the term 'stagflation'?
High inflation accompanied by high unemployment and stagnant economic growth
Low inflation accompanied by high unemployment and stagnant economic growth
High inflation accompanied by low unemployment and stagnant economic growth
High inflation accompanied by high unemployment and rapid economic growth
#14
What does the term 'crowding out' refer to in economics?
An increase in government spending leading to a decrease in private investment
An increase in government spending leading to an increase in private investment
A decrease in government spending leading to an increase in private investment
A decrease in government spending leading to a decrease in private investment
#15
What is the main objective of monetary policy?
Stabilizing employment levels
Stabilizing the price level
Promoting economic growth
All of the above
#16
Which of the following is a characteristic of a recession?
Rising GDP
Decreasing unemployment
Declining consumer spending
Increasing business investment
#17
What is the formula for calculating Gross Domestic Product (GDP) using the expenditure approach?
GDP = C + I + G + NX
GDP = C + I + (X - M)
GDP = C + S + T
GDP = G + (X - M)
#18
Which of the following is NOT a phase of the business cycle?
Expansion
Recession
Trough
Steady state
#19
What does the term 'structural unemployment' refer to?
Unemployment caused by changes in the business cycle.
Unemployment caused by frictional factors such as job search.
Unemployment caused by a mismatch between available jobs and the skills of workers.
Unemployment caused by inadequate aggregate demand.
#20
Which of the following is not considered a leading indicator of economic activity?
Stock market performance
Consumer confidence index
Housing starts
Unemployment rate
#21
Which of the following is not a component of aggregate demand?
Consumption
Investment
Government spending
Imports
#22
Which of the following is NOT a measure of income inequality?
Gini coefficient
Consumer Price Index (CPI)
Lorenz curve
Theil index
#23
Which of the following is NOT a component of the Aggregate Expenditure model?
Consumption
Investment
Government spending
Net exports
#24
What is the difference between nominal GDP and real GDP?
Nominal GDP accounts for inflation, while real GDP does not.
Real GDP accounts for inflation, while nominal GDP does not.
Nominal GDP is adjusted for inflation, while real GDP is not.
Real GDP is adjusted for inflation, while nominal GDP is not.
#25
Which of the following is a limitation of using GDP as a measure of economic well-being?
It does not account for income distribution.
It does not account for environmental degradation.
It does not account for non-market transactions.
All of the above