MCQ Questions
Q.1.
Unemployment involving a mismatch of the skills of unemployed workers and the skills required for available jobs is called:
  • 0%
    C. cyclical unemployment.
  • 0%
    B. Product quality has improved.
  • 0%
    B. structural unemployment.
  • 0%
    B. frictionally unemployed.
Q.2.
The phrase "too much money chasing too few goods" best describes:
  • 0%
    D. cost-push inflation.
  • 0%
    C. the trough.
  • 0%
    C. cyclical unemployment.
  • 0%
    B. demand-pull inflation.
Q.3.
A recession is defined as a period in which:
  • 0%
    A. can be found by summing C + Ig + G + Xn.
  • 0%
    D. real domestic output falls.
  • 0%
    B. full-employment unemployment rate.
  • 0%
    A. total output/worker-hours.
Q.4.
Suppose there are 10 million part-time workers and 90 million full-time workers in an economy. Five million of the part-time workers switch to full-time work. As a result:
  • 0%
    D. All of these are identified as causes of business cycle changes.
  • 0%
    C. Unrestricted trade between nations.
  • 0%
    C. An increase in the size of the working age population.
  • 0%
    C. the official unemployment rate will remain unchanged.
Q.5.
Which of the following transactions would be included in GDP?
  • 0%
    D. Peter buys a newly constructed house.
  • 0%
    C. Unrestricted trade between nations.
  • 0%
    A. income received by households less personal taxes
  • 0%
    C. growth of real GDP per capita
Q.6.
The industries or sectors of the economy in which business cycle fluctuations tend to affect output most are:
  • 0%
    C. dividing 70 by the annual growth rate.
  • 0%
    C. An increase in the size of the working age population.
  • 0%
    D. capital goods and durable consumer goods.
  • 0%
    A. can be found by summing C + Ig + G + Xn.
Q.7.
Other things equal, which of the following would increase the rate of economic growth, as measured by changes in real GDP?
  • 0%
    D. add increases in inventories or subtract decreases in inventories.
  • 0%
    D. All of these are identified as causes of business cycle changes.
  • 0%
    D. add exports, but subtract imports, in calculating GDP.
  • 0%
    C. An increase in the size of the working age population.
Q.8.
Transfer payments are:
  • 0%
    B. excluded when calculating GDP because they do not reflect current production.
  • 0%
    B. a firm's output less the value of the inputs bought from others.
  • 0%
    D. calculate the number of years required for the price level to double.
  • 0%
    C. may cause the official unemployment rate to understate the true amount of unemployment.
Q.9.
Given the annual rate of inflation, the "rule of 70" allows one to:
  • 0%
    D. calculate the number of years required for the price level to double.
  • 0%
    D. add exports, but subtract imports, in calculating GDP.
  • 0%
    D. add increases in inventories or subtract decreases in inventories.
  • 0%
    D. All of these are identified as causes of business cycle changes.
Q.10.
The value added of a firm is the market value of:
  • 0%
    B. full-employment unemployment rate.
  • 0%
    B. a firm's output less the value of the inputs bought from others.
  • 0%
    D. add increases in inventories or subtract decreases in inventories.
  • 0%
    D. calculate the number of years required for the price level to double.
Q.11.
Assume that Kyle is temporarily unemployed because he has voluntarily quit his job with company A and will begin a better job next week with company B. Kyle will be considered as:
  • 0%
    B. Product quality has improved.
  • 0%
    A. technological advance
  • 0%
    B. structural unemployment.
  • 0%
    B. frictionally unemployed.
Q.12.
Which of the following is not seen by economists as an underlying cause of business cycle fluctuations?
  • 0%
    C. growth of real GDP per capita
  • 0%
    D. All of these are identified as causes of business cycle changes.
  • 0%
    A. income received by households less personal taxes
  • 0%
    D. Peter buys a newly constructed house.
Q.13.
A large underground economy results in an:
  • 0%
    A. can be found by summing C + Ig + G + Xn.
  • 0%
    C. Unrestricted trade between nations.
  • 0%
    A. understated GDP.
  • 0%
    A. total output/worker-hours.
Q.14.
The phase of the business cycle in which real GDP is at a minimum is called:
  • 0%
    B. demand-pull inflation.
  • 0%
    C. the trough.
  • 0%
    C. cyclical unemployment.
  • 0%
    A. direct.
Q.15.
In calculating the GDP national income accountants:
  • 0%
    D. add exports, but subtract imports, in calculating GDP.
  • 0%
    D. add increases in inventories or subtract decreases in inventories.
  • 0%
    B. a firm's output less the value of the inputs bought from others.
  • 0%
    C. An increase in the size of the working age population.
Q.16.
The relationship between the size of the negative GDP gap and the unemployment rate is:
  • 0%
    D. add exports, but subtract imports, in calculating GDP.
  • 0%
    A. direct.
  • 0%
    C. the trough.
  • 0%
    B. demand-pull inflation.
Q.17.
The presence of discouraged workers:
  • 0%
    B. a firm's output less the value of the inputs bought from others.
  • 0%
    C. may cause the official unemployment rate to understate the true amount of unemployment.
  • 0%
    D. calculate the number of years required for the price level to double.
  • 0%
    B. excluded when calculating GDP because they do not reflect current production.
Q.18.
Rising per-unit production costs are most directly associated with:
  • 0%
    C. the GDP price index.
  • 0%
    D. calculate the number of years required for the price level to double.
  • 0%
    C. cyclical unemployment.
  • 0%
    D. cost-push inflation.
Q.19.
The natural rate of unemployment is the:
  • 0%
    C. dividing 70 by the annual growth rate.
  • 0%
    B. full-employment unemployment rate.
  • 0%
    A. can be found by summing C + Ig + G + Xn.
  • 0%
    B. a firm's output less the value of the inputs bought from others.
Q.20.
In the treatment of U.S. exports and imports, national income accountants:
  • 0%
    D. add exports, but subtract imports, in calculating GDP.
  • 0%
    D. add increases in inventories or subtract decreases in inventories.
  • 0%
    D. calculate the number of years required for the price level to double.
  • 0%
    C. An increase in the size of the working age population.
Q.21.
GDP is the:
  • 0%
    B. excluded when calculating GDP because they do not reflect current production.
  • 0%
    C. may cause the official unemployment rate to understate the true amount of unemployment.
  • 0%
    B. people are more likely to invest if they don't fear that others can take their returns on investment without compensation.
  • 0%
    B. monetary value of all final goods and services produced within the borders of a nation in a particular year.
Q.22.
According to the Bureau of Labor Statistics, to be officially unemployed a person must:
  • 0%
    C. growth of real GDP per capita
  • 0%
    C. the GDP price index.
  • 0%
    A. technological advance
  • 0%
    A. be in the labor force.