Economics Principles and Practices © 2012 Georgia

Chapter 13: Economic Instability

Self-Check Quizzes

1
A series of largely systematic ups and downs of real GDP is a ______.
A)business fluctuation
B)recession
C)business cycle
D)peak
2
The rise and fall of real GDP over time in a nonsystematic manner is called _______.
A)a business cycle
B)the econometric model
C)a business fluctuation
D)depression scrip
3
A period of recovery from a recession is called a/an _____.
A)trend line
B)expansion
C)depression
D)econometric model
4
All of the following were causes of the Great Depression EXCEPT______.
A)high tariffs that encouraged international trade
B)large gaps in the distribution of income
C)borrowing to finance stock purchases
D)global economic conditions
5
An economic condition in which rising pries and unemployment occur at the same time is called ______.
A)cost-push inflation
B)demand-pull inflation
C)stagflation
D)deflation
6
The demand-pull theory of inflation states that ______.
A)as people converge on stores, shortages occur and prices go up
B)as the federal government's deficit spending increases, so does inflation
C)as input costs rise, the cost of production goes up, causing higher prices
D)as the money supply grows faster than the real GDP, the price level rises
7
Inflation destabilizes the economy for all the following reasons EXCEPT that ______.
A)people on fixed incomes suffer from decreased purchasing power
B)spending on durable goods, such as housing and automobiles, decreases
C)investors speculate heavily to take advantage of higher price levels
D)borrowers are hurt because they must repay old loans at higher rates
8
A limitation of the unemployment rate is that it ______.
A)comprehensively summarizes the unemployment problem
B)counts only the jobless who have been out of work for a month
C)does not count people who have stopped looking for jobs as unemployed
D)classifies part-time employees as unemployed
9
An example of structural unemployment is when ______.
A)young college graduates are looking for their first jobs
B)auto workers lose jobs due to increased demand for foreign cars
C)industries lay off workers until the economy recovers
D)carpenters and builders cannot find work in the winter
10
The kind of unemployment that certain groups of workers experience every year is called ______.
A)frictional unemployment
B)structural unemployment
C)cyclical unemployment
D)seasonal unemployment
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