1. Which of the following statements best describes output per capita?

• It is measured by GDP per capita.
• It is total output (GDP) divided by the number of persons among who contributed to production.
• It is one measure of the marginal level of economic well-being in a country.
• It is total output (GDP) divided by the labour force.

2. According to the rule of 70, if a nation grows at a rate of 10 percent per year, in roughly how many years will national income double?

• 60 years
• 80 years
• 7 years
• 10 years

3. Which of the following statements about the production possibilities curve is the most accurate?

• It is a curve that shows the quantity of output that will be offered for sale at various prices.
• It is a graph that shows the various combinations of output it is possible for an economy to produce given its available resources and technology.
• It is a graph that shows the combinations of output that are most profitable to produce.
• It is a graph that shows the various combinations of resources that can be used to produce a given level of output.

4. What are the three major macroeconomic goals of nearly every society?

• maintaining stable prices, maintaining high levels of employment, and achieving a high rate of economic growth
• maintaining stable prices, reducing interest rates, and achieving a high rate of economic growth
• reducing unemployment, increasing the money supply, and achieving a low but stable rate of economic growth
• maintaining high levels of employment, decreasing interest rates, and lowering prices

5. How do economists define the marginal propensity to consume (MPC)?

• as the additional disposable income households earn in a given period
• as the additional consumption that results from one dollar increase in disposable income
• as the fraction of total disposable income that households spend on consumption
• as the fraction of total disposable income that households save

6. What term does an economist use for a university student who is enrolled in school full-time and NOT seeking employment?

• employed in leisure
• underemployed
• unemployable, and not counted in official statistics
• not in the labour force

7. Which of the following is assumed when drawing an economy's one-year production possibilities curve?

• a continual increase in the productivity of resources
• a fixed quantity of resources and changing levels of technology
• a fixed quantity of available resources and an unchanging level of technology
• an unchanging level of technology and a changing quantity of resources

8. Which model best illustrates the flow of money in the economy?

• downstream
• economic growth
• circular flow
• transfer payment

9. According to economists, which of the following best describes a discouraged worker?

• someone who has a job, but wants to get a different one
• someone who gives up looking for work, and is no longer counted as unemployed
• someone who works part-time, but is actively seeking full-time work
• someone who is unemployed and looking for work

10. What is the term for inflation that occurs due to a decrease in aggregate supply?

• inflationary push
• hyperinflation
• demand-pull inflation
• cost-push inflation

11. What effect explains why the short-run aggregate supply curve is positively sloped?

• the misperception effect
• the income effect
• the market effect
• the substitution effect

12. What will be the result if the nation experiences a technological breakthrough in the production process?

• Business costs will fall, but profits also will fall and production will remain at the pre-breakthrough level.
• Business costs will rise, profits will fall, and production will decrease.
• Business costs will decline, improving profitability, and production will increase.
• Firms will make higher profits but will not increase production.

13. When a temporary sharp reduction occurs in the price of oil, which of the following curves will shift right?

• neither SRAS nor LRAS
• LRAS
• SRAS
• both SRAS and LRAS

14. As the price level decreases, what is the effect on the quantity of real GDP demanded in the economy?

• It first decreases and then increases.
• It increases.
• It decreases.
• It remains the same.

15. Which of the following accurately describes GDP?

• the value of all final goods and services produced domestically within a given period
• the value of all final goods and services produced by a government within a given period
• the value of all final goods and services produced anywhere in the world by a nation's firms within a given period
• the sum of all currency and coins in circulation

16. Which term refers to goods and services that are used in the production of other goods and services?

• preowned goods
• intermediate goods
• recycled goods
• third-party goods

17. In 2017, what percentage of total spending was made by the government?

• 40%
• 60%
• 25%
• 10%

18. Which of the following best describes when an economy may be operating at a point inside the production possibilities curve?

• when a substantial amount of machinery is idle
• when a substantial amount of labour is employed
• when technological progress enables the economy to produce quantities of output otherwise unattainable
• when production resources are being used efficiently

19. What does aggregate demand include?

• the demand for final goods and services
• the demand for investment, including stocks, bonds, and gold
• the demand for intermediate goods and final goods
• the demand for all monetary and nonmonetary transactions

20. What does the total labour force consist of?

• the entire population
• the number of employed persons plus the number of unemployed persons seeking work
• the number of employed persons plus those who are not working but could
• the total population aged 15 and older