Econ Unit 3 Test

What does GDP stand for?

• Gross Domestic Product

• General Domestic Price

• Government Debt Profile

• Global Development Policy

The Consumer Price Index (CPI) measures:

• Unemployment rates

• Economic growth

• Price level changes

• Interest rates

The unemployment rate is defined as:

• Total number of unemployed individuals

• The percentage of the labor force that is unemployed

• The total labor force

• The number of jobs created

Which of the following is NOT a type of unemployment?

• Seasonal

• Structural

• Compulsory

• Frictional

In which stage of the business cycle does economic activity begin to decline?

• Expansion

• Peak

• Trough

• Contraction

The Federal Reserve is composed of how many regional banks?

• 10

• 12

• 15

• 20

Which of the following is a tool of monetary policy?

• Taxation

• Government spending

• Open market operations

• Welfare programs

Fiscal policy primarily involves:

• Adjusting the money supply

• Government spending and taxation

• Interest rate changes

• Regulation of banks

An increase in the money supply usually leads to:

• Higher interest rates

• Lower interest rates

• Inflation

• Both b and c

A recession is typically characterized by:

• Increasing GDP

• High employment

• Declining economic activity

• Rising stock prices