Macroeconomics Quiz

What is the primary focus of macroeconomics?

• Individual firm behavior

• Problems affecting the entire economy (e.g., growth, unemployment)

• International trade agreements

• Stock market fluctuations

Classical economists generally advocate for:

• Activist government policies

• Laissez-faire/nonactivist approaches

• Centralized economic planning

• Mandatory wage controls

Potential output refers to:

• Current GDP adjusted for inflation

• The highest sustainable output using existing resources

• Theoretical maximum output in ideal conditions

• Output during economic peaks

If an economy grows at 4% while its population grows at 2%, per capita growth is:

• 6%

• 2%

• 4%

• 8%

A recession is formally defined as:

• Any decline in stock prices

• Two consecutive quarters of declining real output

• Unemployment exceeding 7%

• A 10% drop in consumer spending

The trough of a business cycle represents:

• Peak economic activity

• The start of a downturn

• The lowest point of recession

• Recovery phase

Structural stagnation is characterized by:

• Short-term unemployment spikes

• Rapid recovery after downturn

• Protracted slow growth requiring structural change

• High inflation during expansions

How is the unemployment rate calculated?

• (Unemployed ÷ Total population) × 100

• (Unemployed ÷ Labor force) × 100

• (Employed ÷ Labor force) × 100

• (Labor force ÷ Working-age population) × 100

Cyclical unemployment results directly from:

• Technological obsolescence

• Fluctuations in economic activity

• Workers transitioning between jobs

• Government regulation changes

The U.S. government formally assumed responsibility for unemployment through:

• The Federal Reserve Act (1913)

• The Social Security Act (1935)

• The Employment Act of 1946

• The Full Employment Act (1978)