Question 1
Which of the following factors contribute to economic growth?
a) an increase in the standard of living
b) a decrease in the productivity of labor
c) an increase in the average wage rate paid to workers
d) an increase in the proportion of the population that is college educated

Question 2
In the long run, the most important source of increase in a nation's standard of living is a:
a) zero rate of population growth.
b) high rate of economic growth.
c) high rate of consumption.
d) high rate of labor force growth.

Question 3
Some prominent members of the slow-economic growth country club include a high-income country like _________.
a) Bolivia
b) Somalia
c) Nigeria
d) Germany

Question 4
Which of the following is most likely to contribute to economic growth as measured by GDP per capita?
a) the imposition of tariffs and quotas on imported goods
b) rapid population growth
c) increased capital formation
d) an increase in marginal tax rates

Question 5
To achieve a high standard of living, a nation should:
a) promote economic growth.
b) increase the tax deduction for child dependents.
c) increase welfare payments to the poor.
d) use less capital and more labor in the production process.

Question 6
_____________________ is a term which refers to the widespread use of power-driven machinery and the economic and social changes that resulted in the first half of the 1800s.
a) Investment and inventions
b) GDP per capita
c) The Industrial Revolution
d) The living standard

Question 7
____________ is a term which refers to the widespread use of power-driven machinery and the economic and social changes that resulted in the first half of the 1800s.
a) Industrial Revolution
b) Capital deepening
c) Technology
d) Living standard

Question 8
Country Alpha and Country Beta initially have the same real GDP per capita. Country Alpha experiences no economic growth, while Country Beta grows at a sustained rate of 5 percent. In 14 years, Country Alpha's GDP will be approximately _________ that of Country Beta.
a) triple
b) double
c) one-half
d) one-fourth

Question 9
Frictional unemployment is:
a) unemployment caused by automation in the workplace.
b) unemployment that is due to the friction of competing ideological systems.
c) unemployment that is due to normal turnover in the labor market.
d) unemployment caused by lack of training and education.

Question 10
The definition of market equilibrium states that at the _______________, the quantity of labor demanded by employers will equal the quantity supplied.
a) equilibrium wage
b) natural rate of unemployment
c) sticky wage
d) efficiency wage

Question 11
The extent of _______________________ will depend on how easy it is for workers to learn about alternative jobs, which may reflect the ease of communications about job prospects in the economy.
A. frictional unemployment
B. cyclical unemployment
C. seasonal unemployment
D. cyclical employment

Question 12
The most significant real economic cost of high unemployment is:
a) the money cost of unemployment insurance payments to the unemployed.
b) the lost tax revenue that might have been paid by persons if they had worked.
c) the money cost of retraining persons to obtain new jobs.
d) the potential goods and services that might have been produced but weren't.

Question 13
The unemployment rate measures:
a) unemployed workers as a percentage of the labor force.
b) unemployed workers as a percentage of the population.
c) unemployed workers as a percentage of the population age over-sixteen.
d) the number of people unemployed divided by the number of people employed.

Question 14
If a nation's labor force receives a significant influx of young workers:
a) the natural rate of unemployment is unlikely to change
b) the natural rate of unemployment is likely to decrease.
c) the natural rate of unemployment is likely to increase.
d) frictional unemployment will likely decrease to zero.

Question 15
Craigburg has a working age population of 20 million. Of those, 11 million are employed and 1 million are unemployed. The unemployment rate is ________ and the participation rate is __________.
a) 8.3%; 60%.
b) 5%; 55%.
c) 8.3%; 55%.
d) 5%; 60%.

Question 16
Reginald looked for work for six months but could not find a job to his liking. He now spends his time at the beach. For purposes of employment he is considered:
a) unemployed.
b) employed in the underground economy.
c) underemployed.
d) out of the labor force.

Question 17
In November 2010 the labor force in Siouxtown, was 14,800. There were 14,483 persons employed. The local unemployment rate:
a) was 7.1%.
b) was 5.6%.
c) was 2.1%.
d) was 1.2%.

Question 18
The basket of goods in the Consumer Price Index consists of about _________ products; that is, several hundred specific products in over __________ broad-item categories.
a) 800; 200
b) 80,000; 200
c) 200; 800
d) 80,000; 400

Question 19
Which of the following is the name used to describe the price index that consists of intermediate goods and finished goods?
a) Employment Cost Index
b) Consumer Price Index
c) Producer Price Index
d) Processing Price Index

Question 20
One of the reasons that a rise in the price of a fixed basket of goods over time tends to overstate the rise in a consumer's true cost of living, is:
a) substitution bias
b) complimentary bias
c) attribution bias
d) preference bias

Question 21
A payment is said to be ________________ if it is automatically adjusted for inflation.
a) indexed
b) cross referenced
c) maintained
d) matched

Question 22
The percentage change in the price level from one time period to the next, whether the price level is measured in terms of money or as a price index, will be the _____________.
a) consumer price index
b) producer price Index
c) price index rate
d) inflation rate

Question 23
While one occasionally sees references to inflation over short time periods, the term typically implies a(n)_____________ in prices.
a) short term decrease
b) short term rise
c) ongoing decrease
d) ongoing rise

Question 24
Nancy's union has negotiated a three-year wage contract that provides for a 2.4% increase indexed to inflation. The rates of inflation are forecast to be 1.62%, 1.93% and 2.21% respectively. How will Nancy's wage increase be expressed in the new contract?
a) COLA plus 2.2%
b) COLA plus 1.6%
c) COLA plus 2.4%
d) COLA plus 1.9%

Question 25
An analyst needs to adjust the nominal GDP for the years 2000 and 2010 into real terms to conclude his comparison analysis. The nominal GDP in 2000 was $672 billion and $1,690 billion for 2010; the real interest rate was 6.79% in 2000 and 3.71% in 2010; the 2000 deflator was 24 and 51 in 2010. What is the real gain?
a) 18.34%
b) 70.61%
c) 151.48%
d) 38.58%