Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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The GDP does not include things such as
a. | economic growth. | b. | productivity. | c. | global
warming's impact on the economy. | d. | goods and
services. |
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2.
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Which of the following is a potential downside of economic growth?
a. | People may become too happy. | b. | If the economy grows too quickly, standards of
living may rise too quickly for people to notice. | c. | Economic growth tends to lead to more and more
government corruption. | d. | It is possible that economic growth can have a
negative impact on the environment. |
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3.
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Identifying real GDP growth requires
a. | measuring all the items that go into the GDP, and then adjusting for
inflation. | b. | measuring the CPI after adjusting for inflation. | c. | measuring the GDP
with current-year prices. | d. | estimating the GDP based on unadjusted price
levels. |
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4.
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Standards of living are measured by
a. | nominal GDP per capita. | b. | real GDP per capita. | c. | inflation. | d. | deflation. |
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5.
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The golden age of prosperity for productivity in the United States was from
World War II to 1973, when productivity rose at an average rate of _____ per year.
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6.
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The average price level is equivalent to
a. | the price of a single good. | b. | the price of a market basket of
goods. | c. | the price of exports. | d. | the price of
imports. |
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7.
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An dollar-amount increase that has not been adjusted for inflation is
called
a. | a real increase. | b. | a nominal increase. | c. | a net
increase. | d. | a inflationary increase. |
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8.
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What is deflation?
a. | An increase in the price level that reduces the GDP. | b. | A decrease in the
price level. | c. | A decrease in the rate of inflation. | d. | A reduction in GDP caused by changes in the
price level. |
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9.
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In the United States, inflation peaked around
a. | 1980 | b. | 1982-1984 | c. | 1929 | d. | 1973. |
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10.
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Money illusion occurs
a. | at a magic show. | b. | when money disappears. | c. | when we disregard
inflation adjustments for dollar values. | d. | when prices
decrease. |
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