Macroeconomics and Economic Indicators Quiz

While promoting economic growth, full employment, and price stability are primary goals, wealth equality is not typically included as a core objective of macroeconomic policy.

Leading indicators, like stock prices, change before the overall economy and are used to forecast future economic trends.

Government spending is a fiscal policy tool that can be used to stimulate or restrain economic activity.

Quantitative easing is a monetary policy tool involving the purchase of financial assets to increase the money supply and stimulate economic activity.

Leading indicators, like stock prices, signal changes in the economy before they occur, providing insights for economic forecasts.

Lagging indicators, such as the unemployment rate, reflect changes in the economy after they have already occurred.

Stagflation is a situation characterized by stagnant economic growth and high inflation rates.

The Phillips curve shows the trade-off between inflation and unemployment, suggesting an inverse relationship between the two.

Central banks use interest rates as a primary tool for monetary policy to influence the money supply and economic activity.

Nominal GDP measures the total value of goods and services produced, including inflation, while real GDP adjusts for inflation, providing a more accurate reflection of economic output.

The Laffer curve illustrates the relationship between tax rates and government revenue, suggesting that there is an optimal tax rate for maximizing revenue.

The unemployment rate is calculated by dividing the number of unemployed individuals by the labor force and multiplying the result by 100.

Crowding out occurs when increased government spending reduces private sector investment, causing interest rates to rise.

The Gini coefficient is a measure of income inequality within a population, with higher values indicating greater inequality.

Automatic stabilizers are government programs that automatically provide fiscal stimulus or restraint in response to economic fluctuations.

The Federal Reserve is responsible for implementing monetary policy, regulating banks, and maintaining financial stability in the United States.

The CPI formula measures the average change in prices paid by consumers for a fixed basket of goods and services over time.