Question : 41) Recessions cause the unemployment rate to ________ and the : 1244761

 

41) Recessions cause the unemployment rate to ________ and the inflation rate to ________.

A) rise; rise

B) rise; fall

C) fall; rise

D) fall; fall

 

42) During an expansion, how do inflation and unemployment typically change?

A) Inflation and unemployment both rise.

B) Inflation and unemployment both fall.

C) Inflation falls and unemployment rises.

D) Inflation rises and unemployment falls.

 

43) Between 1950 and 2009, the average length of recessions in the United States was

A) 11 months.

B) two years.

C) three months.

D) eighteen months.

 

44) Inflation is measured

A) using the level of the consumer price index.

B) as the percentage change in the consumer price index.

C) using the level of real GDP.

D) as the percentage change in real GDP.

 

45) If the CPI is currently 202, what does this tell you about inflation between last year and this year?

A) There was deflation in the economy between this year and last year.

B) Inflation in the economy between this year and last year was 2%.

C) Inflation in the economy between this year and last year was 102%.

D) The CPI measures only the level of prices in a given year, not the percentage change in prices from one year to the next.

 

46) Since 1950, recessions in the United States

A) have not occurred.

B) have become more severe than before 1950.

C) have become less severe than before 1950.

D) are about as severe as they were before 1950.

 

47) Since 1950

A) economic expansions in the United States have been so short that expansions barely exist.

B) the average length of expansions in the United States have become shorter as compared to before 1950.

C) the average length of expansions in the United States have become longer as compared to before 1950.

D) the average length of expansions in the United States are about the same length as compared to before 1950.

 

48) Which of the following is not a reason why the U.S. economy has been more stable since 1950?

A) Goods have become a larger fraction of GDP and services have become a smaller fraction of GDP.

B) The government has actively pursued policy to combat recessions and prolong expansions.

C) Unemployment insurance and other government programs curtail the decline in spending that occurs during a recession.

D) Services have become a larger fraction of GDP and goods have become a smaller fraction of GDP.

 

49) Which of the following indicates that the U.S. economy has become more stable since 1950?

A) longer recessions

B) shorter expansions

C) less severe fluctuations in real GDP

D) All of the above indicate that the U.S. economy has become more stable since 1950.

 

50) If you spend more of your income on consumption goods, which of the following will occur?

A) The production of investment goods will fall.

B) Economic growth will be stimulated.

C) Investments in education will rise.

D) For every dollar you spend on consumption, real GDP will fall by a dollar.

 

 

 

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