1.What does the producer price index (PPI) measure?

Select one:

a. The average change in the prices paid for all goods produced in the economy over a given year.

b. The average of the prices received by producers of goods and services at all stages of the production process.

c. The level of production of goods and services generated in the economy in a given year.

d. The difference between the prices consumers pay for goods and services and the prices producers pay for goods and services.

2.Except for recessions, the duration of unemployment for the typical person in Australia lasts:

Select one:

a. less than six months.

b. over two years.

c. between six and nine months.

d. over one year.

3.Which of the following is not a policy that can increase the accumulation of knowledge capital?

Select one:

a. subsidised research and development

b. patent laws to encourage innovation

c. free provision of education

d. removing patent laws to allow for the spread of knowledge

4.Which of the following is true about 'new growth theory'?

Select one:

a.It states that the rate of technological change is determined outside the working of the market system.

b.It does not adequately explain the factors that determine productivity.

c.It states that the rate of technological change is unaffected by economic incentives.

d.It states that the rate of technological change is caused by economic incentives.

5.Which of the following is an economic cost of rising unemployment rates?

Select one:

a.loss of GDP

b.an inward shift in the production possibility frontier

c.a fall in the amount of unemployment benefits paid by the government

d.an increase in income levels, as people who lose their jobs move onto the unemployment benefits

6.Inflation that is ________ than what is expected benefits ________ and hurts ________.

Select one:

a. less; lenders; borrowers

b. less; borrowers; lenders

c. greater; lenders; borrowers

d. greater; lenders; no-one

7.The measure of production that values production using current prices is called:

Select one:

a.value-added GDP.

b.nominal GDP.

c.real GDP.

d.underground economy GDP.

8.'Cost-push inflation' can be caused by:

Select one:

a.a high growth rate in real wages.

b.an increase in aggregate demand, which pushes prices higher.

c.an increase in aggregate supply, which pushes prices higher.

d.growth in aggregate demand not keeping up with the growth in aggregate supply.

9.When is the labour market considered to be at 'full employment'?

Select one:

a.When there are no unemployed workers.

b.When all unemployment is frictional or structural.

c.When all unemployment is voluntary.

d.When there are more unemployed workers than job vacancies.

10.in 1986, an Apple IIe computer with 65 kilobytes of memory cost around $1500. Today, a $1500 iMac computer (also made by Apple) comes with 8 gigabytes of memory. This illustrates the potential for what kind of bias in CPI calculations?

Select one:

a.new product bias

b.substitution bias

c.increase in quality bias

d.outlet bias