#1
What does the Labor Force Participation Rate measure?
The percentage of the working-age population employed or actively seeking employment
ExplanationIndicates the proportion of potential workers in the labor market.
#2
Which of the following is considered a lagging indicator in macroeconomics?
Unemployment Rate
ExplanationReflects economic performance after changes have occurred.
#3
What is the purpose of the Consumer Price Index (CPI) in measuring inflation?
To measure changes in the prices of a basket of goods and services purchased by households
ExplanationTracks changes in the cost of living for households.
#4
What is the natural rate of unemployment?
The unemployment rate when the economy is operating at its potential output
ExplanationRepresents the lowest sustainable level of unemployment.
#5
What is the primary objective of fiscal policy?
To achieve full employment and stabilize the economy
ExplanationAims to manage aggregate demand and stabilize economic fluctuations.
#6
What is the purpose of the Gross Domestic Product (GDP) deflator?
To adjust GDP for inflation and calculate real GDP
ExplanationRemoves the effects of inflation from nominal GDP.
#7
In macroeconomics, what does the term 'Phillips Curve' describe?
The relationship between inflation and unemployment
ExplanationShows the inverse relationship between inflation and unemployment.
#8
Which of the following factors is NOT considered a determinant of long-term economic growth?
Short-term fluctuations in GDP
ExplanationLong-term growth is influenced by structural factors, not short-term changes.
#9
What is the relationship between the Money Supply (M2) and inflation, according to monetarist economists?
An increase in Money Supply (M2) leads to higher inflation
ExplanationExpansion of money supply can fuel inflationary pressures.
#10
In the context of the labor market, what does the term 'structural unemployment' refer to?
Unemployment resulting from changes in technology or industry structure
ExplanationOccurs due to mismatches between job skills and available positions.
#11
What is the significance of the term 'Okun's Law' in macroeconomics?
It relates changes in GDP to changes in unemployment
ExplanationProvides a guideline for estimating the impact of unemployment on GDP.