Final Exam Study Guide Part 4

Which of the following is used to measure economic growth in a country?

• Gross Domestic Product (GDP)

• Consumer Price Index (CPI)

• Unemployment Rate

• Federal Funds Rate

The Consumer Price Index (CPI) primarily measures (a)  

• Price stability
• Economic growth
• Full employment
• Trade barriers

Which type of unemployment is caused by changes in the business cycle, such as recessions?

• Cyclical unemployment

• Structural unemployment

• Frictional unemployment

• Seasonal unemployment

The four main stages of the business cycle are (a)   , contraction, trough, recovery/expansion.

• Peak
• Growth
• Boom
• Expansion

How many districts make up the Federal Reserve System?

• 12

• 10

• 15

• 8

Which committee is responsible for open market operations in the Federal Reserve System?

• Federal Open Market Committee (FOMC)

• Board of Governors

• Department of Treasury

• Office of Management and Budget

Match the following mandates with their descriptions.

• Lowering taxes on imported goods

• Increasing exports

• When a country's exports exceed its imports

• Price stability

• Maintaining low and stable inflation

• Trade surplus

• Boosting the sale of goods to other countries

• Reducing tariffs

Which tool does the Federal Reserve use to influence other interest rates in the economy?

• Federal funds rate

• Exchange rate

• Import quota

• Tariff rate

Government budget deficits (a)   national debt.

• They increase national debt
• They decrease national debt
• They have no effect on national deb
• They eliminate national debt

What is a likely effect of a government budget surplus?

• Reduction in national debt

• Increase in inflation

• Increase in unemployment

• Decrease in exports