Q41-501.'Frictional unemployment' can be defined as unemployed thatSelect one:
a. arises due to changes in technology in the economy.
b. occurs as the result of a recession.
c. occurs when people are re-entering the labour force.
d. occurs when people have not had a job for 12 months or more.
2.What happens during the contraction phase of the business cycle?
a. Production increases
b. Unemployment increases
c. Income increases
d. Employment increases
3.When does long-run macroeconomic equilibrium occur?
a. When aggregate demand equals short-run aggregate supply and they intersect at a point on the long-run supply curve.
b. When aggregate demand equals short-run aggregate supply.
c. When unemployment equals zero.
d. When output is above potential GDP.
4.Which of the following are goals of monetary policy?
a. Maximising the value of the dollar relative to other currencies, economic growth, and high employment
b. Price stability, maximising the value of the dollar relative to other currencies, and high employment
c. Price stability, economic growth, and high employment
d. Price stability, economic growth, and maximising the value of the dollar relative to other currencies
5.Tax increases on business income slow down the rate of increase in aggregate demand by decreasing __________.
a. business investment spending
b. consumption spending
c. government spending
d. wage rates
6.The beginning of an economic contraction coincides with a/an ________ while during an economic expansion ________.
a. decrease in government spending; investment increases
b. decrease in investment; investment increases
c. decrease in government spending; government spending increases
d. increase in government spending; investment decreases
7.Which of the following is not a phase in the business cycle?
8.The aggregate demand curve shows the relationship between the ________ and ________.
a. inflation rate; quantity of real GDP demanded
b. real interest rate; quantity of real GDP supplied
c. nominal interest rate; quantity of real GDP demanded
d. price level; quantity of real GDP demanded
9.What does the short-run aggregate supply curve show?
a. The relationship between the price level and the quantity of real GDP supplied
b. The relationship between the unemployment rate and real GDP
c. The desired level of national expenditure at different price levels
d. The relationship between labour supplied and the average wage rate
10.A decrease in the price level results in a(n) ________ in the quantity of real GDP demanded because a lower price level ________ consumption, investment and net exports.
a. decrease; increases
b. increase; increases
c. decrease; decreases
d. increase; decreases
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