Deck 25: Government Objectives: Economic Growth and the Economic Cycle

Question 1

Productivity measures

A) Output
B) Profit
C) Output per worker
D) Sales

Answer 1

C

Question 2

In a boom:

A) Demand is low.
B) Unemployment is likely to be low.
C) Prices are likely to fall.
D) Shops are likely to have high levels of unsold stock.

Answer 2

B

Question 3

In a recession:

A) National income is increasing.
B) Unemployment is likely to be low.
C) Spending is relatively low.
D) Shops will have queues.

Answer 3

C

Question 4

Economic growth is most likely to be measured by:

A) CPI
B) GDP
C) FDI
D) WTO

Question 5

Economic growth must mean an increase in:

A) Gini coefficient
B) GDP
C) GDP per person
D) Inflation

Question 6

Which of the following is not a supply-side policy to promote economic growth?

A) Tax incentives for investment
B) Increasing consumption
C) Incentives to work
D) Incentives to entrepreneurs

Question 7

Government intervention can make the economy more cyclical.

Question 8

Economic growth can be shown by an outward shift of the production possibility frontier.

Question 9

Changes in particular variables flag up future changes in the economy. These are called _______ indicators.

Question 10

Economic growth occurring due to a movement from inside the Production Possibility Frontier onto the PPF itself is an increase in ______ rather than potential output.

Question 11

Which of the following would not cause an increase in potential growth:

A) An improvement in the state of technology
B) A decrease in the size of the population
C) An increase in net migration
D) An increase in the skilled workforce

Question 12

The difference between actual output and potential output is referred to as an _______ gap.
Feedback:The difference between what an economy can produce and what it is producing is known as an output gap. This gap can be both positive and negative.

Question 13

A negative output gap is associated with an economy that is:

A) Operating on its PPF.
B) Operating outside its PPF.
C) Operating within its PPF.
D) None of the above.

Question 14

To improve the quality of labour the government could:

A) Provide training.
B) Increase wages.
C) Reduce benefits.
D) None of the above.