1. Which component of GDP typically experiences the largest fluctuations in the US economy?

A: Imports

B: Investment

C: Population

D: Consumption

2. Which component of GDP is largest in the Chinese economy?

A: Government spending

B: Consumption

C: Exports

D: Investment

3. A temporary change in income affects the current consumption of credit-constrained households more than unconstrained households because

A: Credit-constrained households are too shortsighted.

B: A credit-constrained household cannot foresee the future.

C: If the household cannot borrow, its current consumption is limited by its current income.

D: A credit-constrained household does not have any savings to fall back on.

4. A large portion of the care labor done in the economy is not included in GDP because:

A: Much of the care labor is unpaid.

B: Businesses do not benefit from care labor.

C: Care labor does not create any economic value.

D: Most care work is done for altruistic reasons, not for self-inter

5. During the COVID-19 pandemic, the U.S. government sent multiple checks to most U.S. households to counteract the harmful effects the pandemic had on the U.S. economy. This is an example of:

A: monetary policy

B: import spending

C: co-insurance

D: a positive feedback loop

6: Which of the following is an example of a fiscal policy that can improve consumption smoothing?

A: lowering interest rates to weaken credit constraints

B: increasing spending on unemployment insurance

C: banks making more loans to borrowers with little or no collateral

D: funding educational programs to increase weakness of will

7: How canmonetarypolicy help increase consumption smoothing?

A: making it easier to borrow money

B: raising taxes to redistribute income

C: increasing government spending on unemployment insurance

D: raising the minimum wage

8: Which of the following is an example of a positive feedback loop?

A: When consumption spending decreases, firms increase investment spending to boost GDP growth.

B: When GDP growth reaches its peak in the business cycle, then "animal spirits" cause GDP growth to decrease.

C: Businesses raise their prices when there is a shortage of goods.

D: Firms decrease investment when GDP is decreasing.

9: Economist John Maynard Keynes argued that capitalist economies are inherently unstable because they are controlled by:

A: negative feedback loops

B: government bureaucrats

C: the "invisible hand"

D:"animal spirits"