1. Real gross domestic product is most relevant to which major macroeconomic goal?

maintaining high levels of employment

maintaining prices at a relatively stable level

achieving a high rate of economic growth

balancing supply and demand

2. Which of the following best explains why the effect of minimum wage on unemployment is likely small?

Very few workers get laid off from minimum-wage jobs.

Most workers are not minimum-wage earners.

Most businesses prefer to employ minimum-wage earners.

Minimum-wage earners are unlikely to leave their jobs.

3. The situation in which giving assistance to unemployed people reduces their motivation to seek new employment is an example of ______.

deflation

efficiency wage

moral hazard

natural rate of unemployment

4. What type of bias arises when a recently introduced consumer good has not yet been included in the consumer price index (CPI)?

new outlet

new product

quality

substitution

5. Which of the following best characterizes a main difference between the consumer price index (CPI) and GDP deflator?

The GDP deflator is restricted to domestic goods, whereas the CPI is not.

The CPI includes consumer goods, whereas the GDP deflator excludes them.

The GDP deflator fully captures price increases, whereas the CPI does not.

The CPI is restricted to international goods, whereas the GDP deflator is not.

6. Sadiq owns a shoe store. As a result of inflation, he has had to raise prices and must retag all of the shoeboxes in his store. Which of the following is this an example of?

hyperinflation

menu costs

shoe-leather costs

unanticipated inflation

7. Coincident and lagging economic indicators differ along which of the following dimensions?

accuracy

size

location

time