Chapter 24 (Test 2)

  1. Economic growth in an economy is best measured from one year to the next by comparing the change in...
    real GDP
  2. Unemployment is undesirable because it...
    wastes labor resources
  3. A major problem with inflation is that it...
    reduces purchasing power
  4. Which one of the following is a question that a macroeconomic model would help to clarify?
    Can governments promote long-run economic growth?
  5. What was the average percentage increase in the output of the United States from 1995 to the start of the 2007-2009 recession?
    2.7 percent
  6. Before the Industrial Revolution began in England in the late 1700s, standards of living showed...
    virtually no growth
  7. An annual growth rate of 2 percent implies that the standard of living in an economy will double in...
    35 years
  8. About how many times greater, on average, are the material standards of living of citizens in the richest nations compared with the material living standards of citizens in the poorest nations?
    50 times
  9. When current spending is less than current income, it generates...
  10. Which of the following purchases would be an example of an economic investment by a business?
    new computers to improve data analysis
  11. The reason that economic investment is important is that it...
    enables higher levels of consumption in the future
  12. If people and businesses hold positive attitudes about the future, they are more likely to...
    save more and invest more
  13. Macroeconomic behavior is most significantly influenced by...
    expectations about the future
  14. If demand falls for many goods and services across the entire economy for an extended period of time and prices are sticky, most firms that produce those goods and services will be forced to...
    decrease production and decrease employment
  15. Which of the following good or services is most inflexible, or sticky, in price?

    A) newspapers
  16. Macroeconomic models of the economy over the long term are more likely to assume that the economy has...
    flexible prices
Card Set
Chapter 24 (Test 2)
Chapter 24 (Test 2)