Download Name_______________________________ Period__________

Name_______________________________ Period__________ Date_____________________
Economics – GDP, Business Cycle, Inflation, Unemployment, and Taxes:
Unit 3:
Business Cycle and GDP Questions:
1. Label the points of the business cycle…
A.
B.
C.
D.
2. At what point would there likely be the highest unemployment rate?
3. At what point would there likely be the lowest unemployment rate?
4. What is one potential drawback of being at the peak phase of the business cycle?
5. Define Gross Domestic Product (GDP):
Tax Questions:
6. Zabrina earns $100k per year and pays $20k in taxes, while Nadia earns $80k per year and
pays $16k in taxes. What kind of tax structure is this? EXPLAIN YOUR ANSWER.
7. Megan earns $150k per year and pays $50k in taxes, while Jessica earns $100k per year and
pays $25k in taxes. What kind of tax structure is this? EXPLAIN YOUR ANSWER.
8. What kind of tax is a sales tax?
Unemployment Questions (Write the Letter in the Blank Provided):
9.
a.
b.
c.
d.
________ Unemployment caused by a recession is called:
Frictional unemployment.
Cyclical unemployment.
Natural unemployment
Structural unemployment.
10. ________ Frictional unemployment often occurs when:
a. The economy enters a recession.
b. People first enter the labor force.
c. People are discriminated against.
d. People lose a job because their skills are no longer needed.
11. ________Workers at a steel plant are laid off because the economy is weak and the
demand for products requiring steel has fallen. What type of unemployment best describes
the workers� situation?
a. Cyclical unemployment.
b. Full unemployment.
c. Structural unemployment.
d. Frictional unemployment.
12. _________Which of the following types of unemployment is considered to be the most
controllable through macroeconomic policy?
a. Frictional unemployment.
b. Natural unemployment.
c. Cyclical unemployment.
d. Structural unemployment.
13 _________. Workers at a car-manufacturing plant in Flint, Michigan are laid off because
the economy is weak and GM cars aren't selling well. GM isn't sure when the plant will
reopen. What type of unemployment describes the workers' situation?
a. Cyclical unemployment.
b. Full unemployment.
c. Structural unemployment.
d. Frictional unemployment.
14. __________Which of the following would be included as a member of the labor force?
a. A full time college student.
b. A recent high school graduate looking for a first job.
c. A homemaker contributing 15 hours per week as a volunteer worker in a hospital.
d. A retired school teacher collecting social security benefits.
15. ___________Which of the following people would be considered unemployed?
a. A full-time college student.
b. A recent high school graduate looking for a first job.
c. A retired school teaching collecting social security benefits.
d. A homemaker contributing 15 hours per week as a volunteer worker in a hospital.
16. __________Which one of the following persons would NOT be considered
unemployed?
a. An auto worker vacationing in Florida during the layoff period, before the production
of new models begins next month. He does not know for sure whether he will be called
back to work when this happens, and looked for a new job last week.
b. A college student actively searching for a summer job.
c. A construction worker who has given up looking for work after 18 months without a
job.
d. A retiree actively looking for part-time work to supplement Social Security income.
17. ___________The labor force participation rate measures the number of people:
a. In the labor force.
b. In the labor force as a percentage of the total population.
c. In the labor force as a percentage of the population at least sixteen years old.
d. Who are working as a percentage of the labor force.
18. __________
Civilian population
People incapable of working
People not looking for work
Employed workers
In Millions
210
50
60
95
Using the table above, the unemployment rate is:
a. 3 percent.
b. 5 percent.
c. 7 percent.
d. 9 percent.
Inflation Questions:
19. Define Inflation:
20. _________Unexpected inflation will:
a. Hurt borrowers.
b. Hurt lenders.
c. Hurt borrowers and lenders equally.
d. Have no effect on either borrowers or lenders.
21. _________ Which of the following statements is FALSE?
a.
Whether you gain or lose during a period of inflation depends on whether your income
rises faster or slower than the prices of the things you buy.
b. Inflation that is higher than expected benefits borrowers, and inflation that is lower than
expected benefits lenders.
c.
There are no costs or losses associated with expected inflation.
d. When unanticipated inflation occurs regularly, the degree of risk associated with
investments in the economy increases.
22. What does the Bureau of Labor Statistics use to calculate inflation?
23. What happens to the purchasing power of the dollar when there is high inflation?
24. Who benefits from inflation? Why?
25. Who is harmed by inflation? Why?