Question

Economic growth will:

Group of answer choices

Shift PPF left

Shift PPF right

Cause movement along PPF

Decrease production

Flag this Question

Question 171 pts

What annual growth rate is needed for a country to double its output in 14 years?

Group of answer choices

7

2

5

10

Flag this Question

Question 181 pts

Which of the following is NOT a phase of the business cycle?

Group of answer choices

Recession

Base

Expansion

Peak

Flag this Question

Question 191 pts

Two consecutive quarters of negative economic growth as measured by a country's GDP is a:

Group of answer choices

Business Cycle

Great Recession

Recession

Depression

Flag this Question

Question 201 pts

Unemployment rate is defined as ________

Group of answer choices

Unemployed divided by the total population

Unemployed divided by the labor force

Unemployed divided by the labor participation

Labor force divided by the total population

Flag this Question

Question 211 pts

The type of unemployment caused by workers voluntarily changing jobs and by temporary layoffs is:

Group of answer choices

Frictional Unemployment

Structural Unemployment

Structural Unemployment

Burdensome Unemployment

Flag this Question

Question 221 pts

Unemployment of workers whose skills are not demanded by employers, who lack sufficient skill to obtain employment, or who cannot easily move to locations where jobs are available is:

Group of answer choices

Structural Unemployment

Frictional Unemployment

Cyclical Unemployment

Burdensome Unemployment

Flag this Question

Question 231 pts

Natural rate of unemployment is define as ________

Group of answer choices

Cyclical unemployment

Frictional unemployment plus structural unemployment

Seasonal unemployment plus cyclical unemployment

Zero unemployment

Flag this Question

Question 241 pts

The generalization that any 1% point rise in the unemployment rate above the natural rate of unemployment is associated with a rise in the negative GDP gap by 2% of potential GDP is known as:

Group of answer choices

Keynes’ law

GDP Gap

Economic growth

Okun’s law

Flag this Question

Question 251 pts

The index that measures the prices of a fixed market basket of 300 goods and services is:

Group of answer choices

Purchase Price Index

Consumer Price Index

Consumer Sales Index

Consumer Base Index

Flag this Question

Question 261 pts

If the CPI was 314 in 2015 and 335 in 2016, what is the rate of inflation?

Group of answer choices

4.28%

3.14%

5.53%

6.69%

Flag this Question

Question 271 pts

Cost-push inflation occurs when there is ___________.

Group of answer choices

Excess inventory

Increases in the price level resulting from an increase in resource costs and hence in per-unit production costs; inflation caused by reduction in aggregate supply

Increases in the price level resulting from increases in aggregate demand

A trade deficit

Flag this Question

Question 281 pts

Demand-pull inflation occurs when there is ___________.

Group of answer choices

Increases in the price level resulting from an increase in resource costs and hence in per-unit production costs; inflation caused by reduction in aggregate supply

Excess inventory

Excess inventory

Increases in the price level resulting from increases in aggregate demand

Flag this Question

Question 291 pts

_________ inflation reduces real output.

Group of answer choices

Cost-push

Demand-pull

Core

Core

Flag this Question

Question 301 pts

Core inflation ___________.

Group of answer choices

excludes certain items that face volatile price movements, such as energy and food products.

Is the natural rate of inflation

Is measured every two years.

Is cost-pull plus demand-pull inflation

Flag this Question

Question 311 pts

Nominal Interest Rate = Real Interest Rate + _____________.

Group of answer choices

Inflation

Taxes

GDP Deflator

Price Index

Flag this Question

Question 321 pts

The minimum level of consumption that would still exist even if a consumer had absolutely no income is:

Group of answer choices

Autonomous Consumption

Dissaving

Consumption Schedule

Consumption Schedule

Flag this Question

Question 331 pts

Consumption shifters include:

Group of answer choices

Interest Rates

Expectations

Borrowing

All of the other answers

Wealth and Disposable Income

Flag this Question

Question 341 pts

Levi’s is deciding whether to buy a jean rivet press machine for $1000. The company expects the machine to have a 1-year life. The machine is expected to contribute $1220 to the year’s net revenue. What is the expected rate of return?

Group of answer choices

33%

20%

22%

44%

Flag this Question

Question 351 pts

A construction firm is deciding which projects to invest in. It is deciding among five projects. The firm expects a real interest rate of 6%. Given the table, the construction firm will invest in:

Project	E(R)
A	5%
B	9%
C	4%
D	2%
E	10%

Group of answer choices

Projects A & B

Projects A, C, D

Projects B & E

Projects B & D

Flag this Question

Question 361 pts

If MPS = 0.25, then the multiplier is:

Group of answer choices

1

2

3

4

Answer 1

Economic growth will: Shift PPF right

Economic growth will shift the PPF curve outwards.Economic growth means increase in what an ecnomy can produce from its scarce resources.Thus ppf shifts right.

Question 171

What annual growth rate is needed for a country to double its output in 14 years?

as per rule 70, the country needs 5% growth rate to double its output in 14 years

Annual growth rate = 70/14=5%

Therefore answer is 5%

Question 181

Which of the following is NOT a phase of the business cycle?

There are various phases of business cycle. Peak is the highest ponit of business cycle. Expansion is a point from trough to peak while recession is a point from peak to trough.Hemce Base is not a phase in business cycle

Therfore answer is Base.

Question 191

Two consecutive quarters of negative economic growth as measured by a country's GDP is a: Recession

A recession is a period of declining economic performances of the economy consecutively for 2 months.

Therfore answer is Recession.

Question 201

Unemployment rate is defined as Unemployed divided by the labor force

Unemployment rate is a number of unemployed person as a percentage of labour force which includes paid or self employed.

Therfore answer is Unemployed divided by the labor force.

Question 211

The type of unemployment caused by workers voluntarily changing jobs and by temporary layoffs is: Frictional Unemployment

Frictional unemployment is a type of unemploymnet which arises due to workers seeking new jobs or are intransition from one job to another. this type of unemployment is also present even if economy works at full employment. It is a part of natural unemploymeny.

Therfore answer is Frictional Unemployment

Question 221

Unemployment of workers whose skills are not demanded by employers, who lack sufficient skill to obtain employment, or who cannot easily move to locations where jobs are available is: Structural Unemployment

Structural unemployment is a type of unemployment create due to technical changes or industrial reorganisation,workers are available but they lack required skills or live too far from workplace.

Therfore answer is Structural Unemployment

Question 231 pts

Natural rate of unemployment is define as Frictional unemployment plus structural unemployment

Natural rate of unemployment is a combination of frictional and structural unemployment that exists in an economy when labour and resource market are in equilibrium

Therfore answer is Frictional unemployment plus structural unemployment.

Question 241

The generalization that any 1% point rise in the unemployment rate above the natural rate of unemployment is associated with a rise in the negative GDP gap by 2% of potential GDP is known as: GDP gap

GDP gap mean the gap between actual GDP and potential GDP.

Question 251

The index that measures the prices of a fixed market basket of 300 goods and services is:Consumer Price Index

Consumer price index measures weighted average prices of basket of consumer goods and services such as food,transportation ,etc

Therfore answer is Consumer Price Index

Question 261

If the CPI was 314 in 2015 and 335 in 2016, what is the rate of inflation?

inflation = 335-314/314*100=6.69%

Hence answer is 6.69%

Question 271

Cost-push inflation occurs when there is Increases in the price level resulting from an increase in resource costs and hence in per-unit production costs; inflation caused by reduction in aggregate supply

Question 281

Demand-pull inflation occurs when there is Increases in the price level resulting from increases in aggregate demand

Demand pull inflation occurs when there is imbalance between aggregrate demand and supply. Aggregrate demand outweigh aggregrate supply ,hence prices go up.

Question 301

Core inflation excludes certain items that face volatile price movements, such as energy and food products.

Core inflation is change in cost of goods and services but excludes those of food and energy products.

Question 311

Nominal Interest Rate = Real Interest Rate +Inflation

Question 321

The minimum level of consumption that would still exist even if a consumer had absolutely no income is: Autonomous Consumption

Autonomous cosumption means expenditure which consumers make when they have no disposalble income. These are expenditure they must do regardless of the income they have.

Question 331

Consumption shifters include:Interest Rates

Question 341

Levi’s is deciding whether to buy a jean rivet press machine for $1000. The company expects the machine to have a 1-year life. The machine is expected to contribute $1220 to the year’s net revenue. What is the expected rate of return?

rate of return = $1220-$1000/$1000*100

= 22%

Hence answer is 22%

Question 361

If MPS = 0.25, then the multiplier is:

multiplier =1/MPS

=1/0.25=4

Hence answer is 4