Sample Questions, Part 1, Chapters 4-8 Spring 2009 CHAPTER 4 What are the three important macroeconomic goals about which most economists, and society at large, agree?1. economic growth, full employment, and low interest rates 2. economic growth, full employment, and stable prices 3. economic growth, zero unemployment, and falling prices 4. economic growth, low unemployment, and a balanced budget 5. economic growth, a balanced budget, and balanced international trade The two phases of the business cycle are (1)high economic growth and low economic growth (2)expansion and contraction (3)expansion and depression (4)high inflation and low inflation (5)potential economic growth and actual economic growth At the peak of a business cycle, employment and GDP are (1)at their lowest (2)at their highest (3)rising (4)falling (5)it is impossible to state for certain what is happening to employment and GDP If the economy is currently experiencing a high unemployment rate, the greatest cost is (1)extra government spending (2)rewarding those who do not work but collect government benefits (3)lost output (4)higher living standards (5)the extra cost of funding job fairs During the Great Depression, the unemployment rate climbed close to (1)10 percent (2)5 percent (3)15 percent (4)25 percent (5)20 percent The inflation rate has been positive throughout which of the following periods? (1)1920-2003 (2)1920-1940 (3)post-1955 (4)pre-1955 (5)all years for which data are available
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