Chapter_1 - 5 Which of the following might explain the...

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Macroeconomics Test Yourself Chapter1 1. A recession represents: a. an increase in the unemployment rate b. a reduction in stock prices c. a reduction in output d. a simultaneous reduction in economic activity and increase in inflation 2. An expansion represents: a. a reduction in the unemployment rate b. an increase in output c. an increase in stock prices d. a simultaneous increase in economic activity and reduction in inflation 3. Fluctuations refer to: a. alternating periods of expansions and recessions b. changes in stock prices c. movements in prices d. deviations of stock prices from their fundamental values 4. Policy makers can become concerned if the unemployment rate is too low because: a. stock prices will fall b. inflation might increase c. output will decrease d. an exchange rate crisis might occur
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Unformatted text preview: 5. Which of the following might explain the relatively high unemployment rate in Europe? a. relatively high unemployment benefits b. relatively high minimum wage c. misguided macroeconomic policies d. all of the above e. both a and b 6. Which of the following is a potential cost of the European Union (i.e., the adoption of the Euro)? a. an increase in unemployment b. an increase in inflation c. the inability of member countries to set their own interest rates d. greater frequency of recessions 7. Most economists believe that the fall in Japanese stock prices was caused by: a. monetary policy b. fiscal policy c. trade barriers d. the end of a speculative bubble Key 1. c 2. b 3. a 4. b 5. d 6. c 7. d...
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This note was uploaded on 08/03/2008 for the course BUAD 350 taught by Professor Safarzadeh during the Summer '07 term at USC.

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Chapter_1 - 5 Which of the following might explain the...

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