MODULE 2: Introduction to Macroeconomics

Printed Page 15(cont.)

Tackle the Test: Multiple-Choice Questions

Question

During the recession phase of a business cycle, which of the following is likely to increase?
A.
the unemployment rate
B.
the price level
C.
economic growth rates
D.
the labor force
E.
wages
During the recession phase of a business cycle, which of the following is likely to increase?
Question

The labor force is made up of everyone who is
A.
employed.
B.
old enough to work.
C.
actively seeking work.
D.
employed or unemployed.
E.
employed or capable of working.
The labor force is made up of everyone who is
Question

Which of the following provides a long-term increase in the productive capacity of an economy?
A.
an expansion
B.
a recovery
C.
a recession
D.
a depression
E.
economic growth
Question

Which of the following is the most likely result of inflation?
A.
falling employment
B.
a dollar will buy more than it did before
C.
people are discouraged from holding cash
D.
price stability
E.
low aggregate output per capita
Which of the following is the most likely result of inflation?
Question

The other things equal assumption allows economists to
A.
avoid making assumptions about reality.
B.
focus on the effects of only one change at a time.
C.
oversimplify.
D.
allow nothing to change in their model.
E.
reflect all aspects of the real world in their model.
The other things equal assumption allows economists to