1. The long run Phillips Curve is vertical which indicates (A) that in the long run, there is no tradeoff between inflation and unemployment.

(B) that in the long run, there is no tradeoff between inflation and the price level.

(C) that in the long run, the economy returns to a 4% level of inflation.

(D) that in the long run, there is a strong relationship between inflation and the price level

2. When too much money chases too few goods, the resulting inflation is called (A) deflation.

(B) demand-pull inflation.

(C) cost push inflation.

(D) stagflation.

3. The consumer price index is designed to measure the degree to which (A) incomes are distributed among the poor and rich over time.

(B) the cost of purchasing a basket of consumers goods has changed over time.

(C) consumption patterns have changed with time because of higher prices.

(D) consumer prices have risen relative to the wage level in the economy.

4. In December 2020, there were 155,000 of Mainfield's adult residents that were employed, while 27,000 were unemployed. Calculate the unemployment rate for Mainfield at that time. (A) 5% (B) 15% (C) 17% (D) 58%

5. The turning points of the business cycle are (A) expansion and peak.

(B) peak and contraction.

(C) contraction and trough.

(D) peak and trough.

6. Economic growth is advantageous to a nation because it (A) promotes faster population growth.

(B) lessens the burden of scarcity.

(C) eliminates the economizing problem.

(D) slows the growth of wants.

7. Which of the following is NOT a benefit of international trade? (A) High wage levels for all domestic workers.

(B) Lower domestic prices.

(C) Development of more efficient methods and new products.

(D) A greater range of consumption choices.