UNIT 3 part 1 -- test review ALIGN THE STARS
Use Macro p.1 Align the Stars Power Point for game.
Divide class into teams.
Questions do NOT have to be asked in order.
1. A Lunch box factory worker named Tre who loses his job because the company has purchased a machine that can put the handle on the lunch
box faster than he can is an example of
a. frictional unemployment b. structural unemployment c. cyclical unemployment
d. seasonal unemployment
2. In a typical business cycle, what stage immediately follows a peak?
a. contraction
b. expansion
c. peak
d. recession
3. The country of Booga Booga is excited about the economic predictions for 2015. What impact do these predictions have on aggregate
supply/demand?
a. aggregate demand increases
c. aggregate demand decreases
b. aggregate supply increases
d. aggregate supply decreases
4. If Veronica loses her job at the Chocolate plant because manufacturing is slow due to a downturn in the economy, you can conclude that she is
a. cyclically unemployed.
c. structurally unemployed.
b. seasonally unemployed.
d. frictionally unemployed.
5.Products that would be used in calculating GDP include
a. dolls manufactured in Nepal at a factory owned by Barbie Inc. (a U.S. company).
b. Plastic manufactured in Indonesia and sold to Barbie Inc. doll manufacturers in the United States.
c. dolls manufactured in Nevada at a factory owned by a Chinese doll company, Boo Boo Dolls
d. plastic manufactured in a factory in Ohio and sold to Barbie Inc. around the world to make designer dolls.
6.The calculation of GDP would include
a. The income of a person who mows his friends yard every other weekend.
b. The sale of a 2010 Ford Focus.
c. The price of the cotton to make a shirt.
d. The income of a fry cook at McDonalds.
7.Which of the following is NOT an example of a final good or service?
a. Pop tart sold at the school store
c. A cookie purchased from Publix
b.
d.
Cheese dip at Cisco’s
Tomatoes purchased to make spaghetti sauce
8.In an economy, when the price level rises, consumers buy less goods and services. This is represented by the
a. Increase in aggregate supply curve.
c. Decrease in aggregate supply curve
b. Increase in aggregate demand curve
d. Decrease in aggregate demand curve
9.When Jeff leaves his job at Pizza Villa to look for a career as a Road Kill scooper, he is
a. Cyclically unemployed
b. Frictionally unemployed
c. structurally unemployed
d. a discouraged worker.
10. Concern about an international crisis has caused consumers to save their money and postpone big purchases. What is the effect on aggregate
demand and aggregate supply?
a. No change
b. aggregate supply will decrease, raising the price level and lowering real GDP
c. aggregate demand will decrease, lowering both real GDP and the price level
d. both aggregate demand and aggregate supply will decrease, leading to lower real GDP
11.As you move from left to right, the aggregate demand curve
a. slopes upward.
b. slopes downward.
12.A period of growth and recovery is known as
a. peak
b. trough
c.
d.
c. recession
may slope upward or downward.
is horizontal.
d. expansion
13. If the unemployment rate of a nation is slowly beginning to decline and the GDP is slowly beginning to fall, which phase of the business cycle is
beginning?
a. expansion
b. contraction
c. trend line
d. peak
14. People who are unemployed
a. work at jobs which are below their skill level
b. are not looking for work
c. are actively seeking employment
d. are experiencing really bad luck
15. Consumer price index (CPI) measures
a. gross domestic product.
b. inflation.
c.
d.
unemployment.
aggregate demand.
16. In an economy, when the price level falls, consumers and firms buy more goods and services. This relationship is represented by the
a. aggregate supply curve.
c. equilibrium GDP.
b. aggregate demand curve.
d. business cycle.
17. The “market basket” that is used by the Bureau of Labor Statistics to calculate prices is made up of which of the following?
a. food items only
b. nonfood items only
c. typical goods and services for an urban household
d. food and necessary services for any family
18. What is the difference between seasonal unemployment and structural unemployment?
a. Seasonal unemployment occurs because of seasons, whereas structural occurs because people lack skills.
b. Seasonal unemployment is rare in a modern society, whereas structural is not.
c. Seasonal unemployment occurs only in the summer, whereas structural can occur all year round.
d. Seasonal unemployment is generally among low-paid workers, whereas structural is among the highly paid.
19. Economists look to which of the following explanations for inflation?
a. Too much money in the economy
b. demand for goods exceeds supply, as in wartime
c. producers raise prices in order to meet increased costs
d. All of the above
20.Which of the following is most likely to be worried about high inflation?
a. a factory worker
c.
b. a shopkeeper
d.
a doctor with a suburban practice
a retired couple on a fixed income
Do the following examples cause a shift in aggregate demand? If so, is it an increase or decrease? And what factor causes it?
21. Government spending will decrease next fiscal year; the President has to issue more taxes to pay for the war.
Increase / Decrease Why? _________________
22. the stock market collapses. Investors lose billions.
Increase / Decrease Why? _________________
23. A survey shows that consumers are confident about the future economy.
Increase / Decrease Why? _________________
Do the following examples cause a shift in aggregate supply? If so, is it an increase or decrease? What factor causes it?
24. Investment by businesses triples.
Increase / Decrease
25. Unions grow more aggressive and wage rates increase.
Why? __________
Increase / Decrease
26. How do we measure:
GDP
Economic growth
Inflation
27. Difference between inflation, stagflation, and deflation
28. Label the business cycle with everything we have learned!
Why? ______________