Macroeconomics Unit Test – Flashcards
Unlock all answers in this set
Unlock answersquestion
What role does the Federal Reserve play? Check all that apply.
answer
The Federal Reserve plays the role of regulating the banking industry, loaning money to banks, and transferring any profits to the Treasury
question
What are the signs of low inflation? Check all that apply.
answer
The signs of low inflation are that demand steadily rises, prices continue to increase, and the economy grows in a healthy way
question
How do bank loans help the nation's economy?
answer
Bank loans help the economy by allowing businesses to expand and improve.
question
As a result of decreased production, David lost his job designing cars. Which terms can be used to describe David? Check all that apply.
answer
David can be described as cyclically unemployed and unemployed.
question
Government officials in Country M have determined that they need to take action to encourage the growth of their economy. To do this, they have introduced an incentive policy that offers citizens free education. This is extended to all individuals who sign a contract agreeing to work within their specific industry for the next ten years.
Country M hopes to encourage economic growth by investing in
answer
Country M hopes to encourage economic growth by investing in education to reduce unemployment and increase production.
question
The exchange of factors of production for income occurs in the__________ market.
answer
It occurs in the factor market.
question
What is the name of the period when an economy begins to shrink?
answer
When an economy begins to shrink it is called recession.
question
In the circular flow model, factors of production flow to firms. Which of the following are primary factors of production? Check all that apply.
answer
The primary factors of production are labor, capital, and land.
question
Which best describes the economic impact of defaulting on bank loans?
answer
As a result of defaulting on bank loans, the economy suffers because banks have less money to loan others.
question
One fact about all currency is that it
answer
Currency has a changing value.
question
Which statement best describes the main cause of the 2008 housing market crash in the United States?
answer
The main cause of the crash was that many people could not make home payments during a weak economy.
question
What term is used in macroeconomics to describe the total supply and the total demand?
answer
The term used to describe total supply and demand is aggregate.
question
How do consumers' feelings about the economy help contribute to growth?
answer
Positive consumer attitudes influence spending habits.
question
The most common measure of inflation is a statistic called the_______________
answer
The most common measure of inflation is called consumer price index.
question
According to the business cycle, what characteristic indicates that a depression has been reached?
answer
A depression has been reached when a trough has occurred.
