Ch.7 - ECON 201

Microeconomics is the study of

• how households and firms make choices.

• the economy as a whole.

• the global economy.

• topics such as unemployment, inflation, and economic growth.

Macroeconomics deals with the economy as a whole

• True

• False

The tools used by SAMA in Kingdom of Saudi Arabia to control the quantity of money in the economy.

• monetary policy.

• fiscal policy.

• supply-side policies.

• demand-side policies.

A decrease in the overall price level

• inflation

• sustained inflation.

• recession

• deflation

The period in the business cycle from a peak down to a trough, during which output and employment fall

• Recession

• Deflation

• Inflation

• Expansion

Inflation usually increases during a recession and decreases during an expansion.

• True

• False

Fiscal policy is government policies concerning taxes and expenditures (spending).

• True

• False

In labor market, households demand labor, firms and government supply labor.

• True

• False

Unemployment rate is the percentage of the labor force that is unemployed.

• True

• False

Aggregate supply is the total demand for goods

and services in an economy.

• True

• False