Principles of Macroeconomics Quiz

What was the unemployment rate in the US in June 2003?

• 3.9%

• 4.9%

• 6.3%

• 5.5%

What was the first notable shock that led to the US recession of 2001?

• Decline in stock market

• Terrorist attack on Twin Towers

• Accounting scandals

• Tax cuts

What was the second shock that contributed to the US recession of 2001?

• Tax cuts

• Accounting scandals

• Decline in stock market

• Terrorist attack on Twin Towers

What was the third shock that impacted the US economy during the recession of 2001?

• Decline in stock market

• Accounting scandals

• Terrorist attack on Twin Towers

• Tax cuts

What policy action helped overcome the US recession of 2001?

• Increase in government spending

• Expansionary monetary policy

• Tax cuts

• All of the above

What was one of the consequences of the housing bubble in the US before the 2008 financial crisis?

• Stable mortgage rates

• Rise in house prices

• Increase in household income

• Decrease in household wealth

What led to the decrease in demand for houses in the US before the 2008 financial crisis?

• Subprime mortgage sector

• Rising household income

• Low interest rates

• Stable housing market

What policy response was taken by the Federal Reserve during the 2008 financial crisis?

• No action taken

• Reduce government spending

• Cut target for federal funding

• Increase federal funding rates

What was one of the actions taken by Congress to address the 2008 financial crisis?

• Increase taxes

• Allocate funds to rescue financial system

• Reduce government spending

• No intervention

What was the aim of Mr. Barack Obama's health port program during the 2008 financial crisis?

• Cut funding for banks

• Reduce aggregate demand

• Increase government spending

• No policy action