Macroeconomics Chapter 1

Which branch of economics focuses on decision making by a single individual, household, firm, or level of government?

Macroeconomics
Economics
Finance
Microeconomics (correct)

What is economic growth according to the conventional perspective?

A rise in real per capita output (correct)
A decrease in real per capita output
A stability in real per capita output
A fluctuation in real per capita output

What is the inflation rate according to the conventional perspective?

The percentage decrease in the general level of prices
The fixed level of prices
The increase in the general level of prices
The percentage change in the general level of prices (correct)

What does macroeconomics study?

Decision making for the economy as a whole (A) Signup and view all the answers

What is one of the objectives of macroeconomics from a conventional perspective?

Achieving price stability (C) Signup and view all the answers

What is the consequence of a society with a low rate of economic growth?

Difficult choices must be made about the allocation of the economic pie (A) Signup and view all the answers

What is the study of macroeconomics concerned with?

Issues, objectives, and policies that affect the whole economy (D) Signup and view all the answers

What is the result of high rates of economic growth?

It is possible to have more of everything (A) Signup and view all the answers

What is a major source of non-inflationary increases in wages?

Productivity growth (C) Signup and view all the answers

What percentage of unemployment rate is generally considered a normal situation?

4-5% (B) Signup and view all the answers

What is a major objective of macroeconomics from a conventional perspective?

Full-employment (A) Signup and view all the answers

What is the result of rapidly growing productivity?

Increase in real GNP (B) Signup and view all the answers

What is the consequence of unequal distribution of income?

Higher income groups become richer and lower groups become poorer (A) Signup and view all the answers

What is the consequence of reducing unemployment?

Increase in real output (D) Signup and view all the answers

What is the primary goal of policymakers in regards to unemployment?

Control the variability of unemployment (D) Signup and view all the answers

What is the definition of full-employment?

94-95% employment rate (C) Signup and view all the answers

What is the purpose of a progressive income tax system?

To reduce the gap between high-income and low-income people (C) Signup and view all the answers

What is one of the objectives of Macroeconomics from an Islamic perspective?

Optimal rate of economic growth (D) Signup and view all the answers

What is the basis of social justice in Islamic economics?

The principle that all that exists belongs to Allah (D) Signup and view all the answers

What is the concept of Islam regarding mankind?

Mankind is one family with no discrimination (A) Signup and view all the answers

Why does Islam tolerate some inequalities of income?

Because all men are not equal in their character, ability, and service to society (D) Signup and view all the answers

What is the role of man in Islamic economics?

As a trustee of the bounties (A) Signup and view all the answers

What is one of the ways to reduce the gap between producers?

Providing subsidies to farmers and fishermen (A) Signup and view all the answers

What is the ultimate goal of Islamic economics?

To achieve social justice and equity (B) Signup and view all the answers

What is one of the ways Islam emphasizes distributive justice?

By providing assistance in finding jobs to the unemployed (A) Signup and view all the answers

What is the purpose of zakah in Islamic economics?

To redistribute income from the rich to the poor (A) Signup and view all the answers

What is the Islamic approach to inheritance?

Division of wealth according to the law of Islam (faraid) (B) Signup and view all the answers

Why is education important in Islamic economics?

To conform to the ideals laid down in the Qur'an and the Sunnah (D) Signup and view all the answers

What is the moral obligation of the trustee in Islamic economics?

To employ resources efficiently (C) Signup and view all the answers

What is the goal of Islamic economics in terms of resource allocation?

To utilize God's given resources more efficiently (C) Signup and view all the answers

What is necessary for the growth of an economy and the development of a healthy society?

A basic physical and social infrastructure (A) Signup and view all the answers

What is the goal of economic growth in Islamic economics?

To improve the standard of living of all people (A) Signup and view all the answers

What is one of the main objectives of economic growth in an Islamic society?

To eradicate poverty through higher employment and efficient use of resources (B) Signup and view all the answers

What is a primary target for Islamic states to achieve optimum economic growth?

Eliminating immoral inequalities in income and wealth (A) Signup and view all the answers

What is necessary for the development of an economy?

Increased investment in human capital formation (D) Signup and view all the answers

Why is human capital formation important in Islam?

Because man is a center of all economic activity (C) Signup and view all the answers

What should the state ensure in Islamic society?

Maximum contribution to the creation of new employment opportunities (C) Signup and view all the answers

What is a key aspect of social justice in Islamic society?

Eliminating immoral inequalities in income and wealth (C) Signup and view all the answers

What is a characteristic of the foundation of Islamic society?

Guided by spiritual values and supreme laws (C) Signup and view all the answers

Why is education important in Islamic society?

It is ultimately important for human quality and social justice (D) Signup and view all the answers