Question 1

A firm produces goods at a cost of $50 each. The production process creates $25 of pollution for every good made.

Which of the following terms corresponds to the statement above?

A.Marginal social benefit

B.Marginal social cost

C.Economic justice

D.Positive externality

Question 2

The record of all monetary transactions that flow across a country's borders is known as which of the following?

A.Balance of payment

B.Capital account

C.National income accounting

D.Current account

Question 3

Which of the following describes the Producer Price Index?

a.A strong indicator of economic growth but not wealth distribution

b.A popular economic indicator despite its statistical issues

c.An evaluation of crude, intermediate and finished goods

d.What the Conference Board uses to assess economic growth

Question 4

Which statement below regarding monetary and fiscal policy is FALSE?

a.Expansionary policy causes AD to shift to the left.

b.The inverse relationship between inflation and unemployment is known as the Phillips Curve.

c.The situation where unemployment is high and inflation is high is stagflation.

d.If AD increases too much, prices will increase and AD will return to equilibrium.

Question 5

Which statement below regarding the stagflation of the late 1970s/early 1980s is true?

a.Expansionary fiscal policies succeeded in lowering the unemployment rate.

b.The Phillips curve represented the state of the economy at the time.

c.Expansionary fiscal policy led to double digit inflation.

d.Disruptions in the oil supply caused the LRAS curve to move to the left.

Question 6

What does the Human Development Index measure?

a.Depicts the level of income inequality in a country as a graph

b.Measures the level of income inequality in a country

c.Measures the percentage of people looking for work and able to do so

d.Measures quality of life indicators in different countries

Question 7

Which of the following is FALSE concerning using GDP to compare countries?

a.GDP cannot measure gains to all economic classes.

b.GDP cannot adequately measure leisure time.

c.GDP cannot measure non-market activities.

d.GDP cannot measure consumption-led growth well.

Question 8

Which statement below regarding economic indicators is true?

a.Trends, patterns or situations that assist in forecasting the economy are considered lagging indicators.

b.It is common practice to only look at one indicator when analyzing the macroeconomy.

c.Economic indicators provide a view of the economy over an extended period of time.

d.Economic indicators are inherently macroeconomic.