econ unit 3 review

What do businesses receive from households in the factor market?

• income

• revenue

• resources

• goods and service

Which of the following is measure to determine if economic growth has occurred?

• Production cost

  
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• Unemployment rate

  
  

• The value of the dollar

  
  

• Real gross domestic product

  
  

According to the Consumer Price Index (CPI), the economy is experiencing inflation.  Which economic goal is measured?

• Price stability

  
  

• Full employment

  
  

• Economic growth

  
  

• Economic efficiency

  
  

Which type of unemployment is likely increasing during a recession?

• cyclical

• seasonal

• structural

• frictional

Which part of the business cycle does the circled area represent?

• 
  contraction

• expansion

• peak

• trough

For this question, choose TWO answers.  Which are of the following are roles of the Federal Reserve?

• taxation

• monetary policy

• setting a budget

• bank supervision

• producing new coins

How would the Federal Reserve stimulate the U.S. economy and reduce unemployment?

• Increase interest rates

  
  

• Decrease interest rates

  
  

• Decrease the money supply

  
  

• Increase the federal funds rate

  
  

When the Federal Reserve increases the federal funds rate, how would it impact the economy?

• Business and consumers will borrow less.

  
  

• Businesses and consumers will spend more.

  
  

• Businesses and consumers will borrow more.

  
  

• Businesses and consumers will not be impacted.

  
  

Which of the following describes the government's effect on economic growth, price stability, and full employment?

• The Federal Reserve and Congress work together to balance the federal budget

  
  

• Congress and the president make tax and spending decisions to stabilize the economy.

  
  

• The Federal Reserve uses its tools to stabilize the economy by changing the money supply.

  
  

• The Federal Reserve uses its tools to make tax and spending decisions to stabilize the economy.

  
  

When a country has a budget deficit, that country will potentially have which of the following?

• a balanced budget

  
  

• a decreasing national debt

  
  

• an increasing national debt

  
  

• an increasing national budget surplus