Economic Indicators Quiz

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32 Questions

What type of unemployment is caused by workers voluntarily changing jobs and by temporary layoffs?

Frictional unemployment

Which measure of employment and labor utilization looks at how well the labor force is being used in terms of skills, experience, and availability to work?

Underemployment

What is the normal rate of unemployment around which the unemployment rate fluctuates?

Natural rate of unemployment

Which type of unemployment occurs as a result of harvest schedules or vacations, or when industries slow or shut down for a season?

Seasonal unemployment

What does the Bureau of Labor Statistics measure in the U.S. economy to support public and private decision making?

Price changes

Which type of economic statistical indicator changes (more or less) simultaneously with general economic conditions and therefore reflects the current status of the economy?

Coincident Economic Indicators

What is the definition of creeping inflation?

A gradual, steady rise in the price of goods and services over time

What is the definition of deflation?

A general decline in prices for goods and services

What is the peak of the economy called before a recession begins?

Peak

What does easy money policy refer to?

A policy where interest rates are lower, making it easier to borrow and increasing money circulation

What does contractionary fiscal policy involve?

Reducing public spending and cutting public sector pay or jobs

What is supply-side fiscal policy also known as?

(Trickle down)

What does demand side fiscal policy focus on?

Increasing or decreasing aggregate demand

What is meant by GDP per capita?

(Gross domestic product divided by the number of people in the population)

What is meant by tight money policy?

(Discount Rate (Monetary Policy))

What does Milton Friedman's monetary policy propose?

The Fed should target the growth rate of money to equal the growth rate of real GDP, leaving the price level unchanged.

Leading economic indicators are measures that consistently rise or fall several months after an expansion or a contraction begins.

False

Cyclical unemployment is caused by a business cycle recession.

True

Underemployment measures the utilization of labor force in terms of skills, experience, and availability to work.

True

Coincident Economic Indicators change (more or less) simultaneously with general economic conditions and therefore reflect the future status of the economy.

False

Frictional unemployment is a type of unemployment caused by workers involuntarily changing jobs and by permanent layoffs.

False

Natural rate of unemployment is the normal rate of unemployment around which the unemployment rate fluctuates due to seasonal unemployment.

False

Creeping inflation refers to a sudden, dramatic rise in the price of goods and services over a short period of time.

False

Deflation is a general decline in prices for goods and services, typically associated with an expansion in the supply of money and credit in the economy.

False

GDP per capita is calculated by dividing the gross domestic product by the total population of a country.

True

Peak refers to the lowest point of the economy before a recovery begins, while trough is the highest point of the economy before a recession begins.

False

Milton Friedman's monetary policy proposes that the Fed should target the growth rate of money to equal the growth rate of real GDP, leaving the price level unchanged.

True

In an easy money policy, interest rates are lower, making it easier to borrow and increasing money circulation in the economy.

True

The discount rate refers to the interest rates banks pay to consumers for borrowing money.

False

Keynes and his followers believed that individuals should save more and spend less to effect full employment and economic growth.

False

Supply-side fiscal policy, also known as trickle-down economics, focuses on increasing aggregate demand to influence unemployment.

False

The multiplier effect refers to the effect on national income and product of an exogenous decrease in demand.

False

Test your knowledge of leading, coincident, and lagging economic indicators, as well as the important economic statistical measures such as the unemployment rate. Understand the significance of these indicators in forecasting and analyzing economic conditions.

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