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UNIT FIVE SAMPLE TEST Q'S
Answer Section
MULTIPLE CHOICE
1. ANS: C
The GDP (gross domestic product) is the dollar value of all final goods produced within a country’s borders in a
given year.
TOP: Economic Performance | Gross Domestic Product
2. ANS: A
Real GDP expresses GDP in constant prices, allowing for price changes and making it easier to measure changes in
economic performance over time.
TOP: Economic Performance | Real GDP
3. ANS: B
Frictional unemployment occurs when people take time to find a job.
TOP: Unemployment | Frictional Unemployment
4. ANS: D
Economists generally agree that an unemployment rate of 4 to 6 percent is normal and full employment exists when
cyclical unemployment is eliminated.
TOP: Unemployment | Full Employment
5. ANS: A
The disparity between the rich and the poor has increased.
TOP: Poverty | Income Distribution
6. ANS: A
Real GDP expresses GDP in constant prices, allowing for price changes and making it easier to measure changes in
economic performance over time.
TOP: Economic Performance | Real GDP
7. ANS: D
A recession is a long economic contraction of at least six straight months.
TOP: Business Cycle | Recession
8. ANS: D
Technological progress is an increase in efficiency gained by producing more output without using more input. The
increased productivity from new technology is called technological progress.
TOP: Economic Growth | Technology
9. ANS: D
The quantity theory holds that inflation is caused by the existence of too much money in the economy.
TOP: Inflation | Quantity Theory
10. ANS: B
National income accounting is the collection and organization of macroeconomic statistics. This information is used
by policymakers to analyze economic health and guide government action.
TOP: Economics | Gross Domestic Product and Growth