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64 MCQs for Exam - Principles Microeconomics | BM 115, Exams of Introduction to Macroeconomics

Mohawk Valley Community College - Utica BranchIntroduction to Macroeconomics

Material Type: Exam; Class: Prin of Macroeconomics; Subject: Business Management; University: Mohawk Valley Community College-Utica Branch; Term: Unknown 1989;

Typology: Exams

Pre 2010

Uploaded on 08/19/2009

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CHAPTER 7
Introduction to Economic Growth and Instability
1. Economic growth is best defined as an increase in:
A) either real GDP or real GDP per capita. C) total consumption expenditures.
B) nominal GDP. D) wealth in the economy.
2. Real GDP per capita is found by:
A) adding real GDP and population. C) dividing real GDP by population.
B) subtracting population from real GDP. D) dividing population by real GDP.
131. If the nominal interest rate is 5 percent and the real interest rate is 2 percent, then the inflation premium is:
A) 8 percent. B) 5 percent. C) 3 percent. D) 2 percent.
132. If both the real interest rate and the nominal interest rate are 3 percent, then the:
A) inflation premium is zero. C) nominal GDP must exceed real GDP.
B) real GDP must exceed the nominal GDP. D) inflation premium also is 3 percent.
13. Given the annual rate of economic growth, the "rule of 70" allows one to:
A) determine the accompanying rate of inflation.
B) calculate the size of the GDP gap.
C) calculate the number of years required for real GDP to double.
D) determine the growth rate of per capita GDP.
25. The immediate determinant of the volume of output and employment is the:
A) composition of consumer spending.
B) ratio of public goods to private goods production.
C) level of total spending.
D) size of the labor force.
26. As it relates to economic growth, the term long-run trend refers to:
A) the long-run increase in the relative importance of durable goods in the U.S. economy.
B) the long-term expansion or contraction of business activity that occurs over 50 or 100 years.
C) fluctuations in business activity that average 40 months in duration.
D) fluctuations in business activity that occur around Christmas, Easter, and so forth.
29. During a severe recession, we would expect output to fall the most in:
A) the health-care industry. C) agriculture.
B) the clothing industry. D) the construction industry.
30. The phase of the business cycle in which real GDP declines is called:
A) the peak. B) an expansion. C) a recession. D) the trough.
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Download 64 MCQs for Exam - Principles Microeconomics | BM 115 and more Exams Introduction to Macroeconomics in PDF only on Docsity!

CHAPTER 7

Introduction to Economic Growth and Instability

  1. Economic growth is best defined as an increase in: A) either real GDP or real GDP per capita. C) total consumption expenditures. B) nominal GDP. D) wealth in the economy.
  2. Real GDP per capita is found by: A) adding real GDP and population. C) dividing real GDP by population. B) subtracting population from real GDP. D) dividing population by real GDP.
  3. If the nominal interest rate is 5 percent and the real interest rate is 2 percent, then the inflation premium is: A) 8 percent. B) 5 percent. C) 3 percent. D) 2 percent.
  4. If both the real interest rate and the nominal interest rate are 3 percent, then the: A) inflation premium is zero. C) nominal GDP must exceed real GDP. B) real GDP must exceed the nominal GDP. D) inflation premium also is 3 percent.
  5. Given the annual rate of economic growth, the "rule of 70" allows one to: A) determine the accompanying rate of inflation. B) calculate the size of the GDP gap. C) calculate the number of years required for real GDP to double. D) determine the growth rate of per capita GDP.
  6. The immediate determinant of the volume of output and employment is the: A) composition of consumer spending. B) ratio of public goods to private goods production. C) level of total spending. D) size of the labor force.
  7. As it relates to economic growth, the term long-run trend refers to: A) the long-run increase in the relative importance of durable goods in the U.S. economy. B) the long-term expansion or contraction of business activity that occurs over 50 or 100 years. C) fluctuations in business activity that average 40 months in duration. D) fluctuations in business activity that occur around Christmas, Easter, and so forth.
  8. During a severe recession, we would expect output to fall the most in: A) the health-care industry. C) agriculture. B) the clothing industry. D) the construction industry.
  9. The phase of the business cycle in which real GDP declines is called: A) the peak. B) an expansion. C) a recession. D) the trough.
  1. The phase of the business cycle in which real GDP is at a minimum is called: A) the peak. B) a recession. C) the trough. D) the pits.
  2. Market economies have been characterized by: A) occasional instability of employment and price levels. B) uninterrupted economic growth. C) persistent full employment. D) declining populations.
  3. The production of durable goods varies more than the production of nondurable goods because: A) durables purchases are nonpostponable. B) durables purchases are postponable. C) the producers of nondurables have monopoly power. D) producers of durables are highly competitive.
  4. A recession is a period in which: A) cost-push inflation is present. C) demand-pull inflation is present. B) nominal domestic output falls. D) real domestic output falls.
  5. In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates? A) expansion B) recession C) peak D) trough

Answer the next question(s) on the basis of the following information about the hypothetical economy of Scoob. All figures are in millions.

Not in the labor force 45 Unemployed 7 Total population 145 Employed 95 Discouraged workers 3

  1. Refer to the above information. The labor force in Scoob is: A) 95 million. B) 102 million. C) 105 million. D) 145 million.
  2. Refer to the above information. The unemployment rate in Scoob is: A) 2.5 percent. B) 3.2 percent. C) 5.0 percent. D) 6.9 percent.
  3. The United States' economy is considered to be at full employment when: A) 90 percent of the total population is employed. B) 90 percent of the labor force is employed. C) about 4-5 percent of the labor force is unemployed. D) 100 percent of the labor force is employed.