Deck 17: Unemployment and Inflation

Question 1

Which of the following is NOT one of Lawrence Summers determinants of growth?

A) Maintaining sustainable government finances and sound money.
B) Having a workforce with high levels of education and literacy.
C) Having an institutional environment in which contracts can be enforced and property rights established.
D) Integrating with the global economy through trade and investment.

Answer 1

Having a workforce with high levels of education and literacy.

Question 2

-Refer to Table 17 -1. Calculate the growth rate of real GDP from 2004 to 2005.

A) 4%
B) 1%
C) 3%
D) 2%

Answer 2

3%

Question 3

-Refer to Table 17 -1. Calculate the average annual growth rate from 2002 to 2005.

A) 1.5%
B) 1%
C) 2%
D) 3%

Answer 3

2%

Question 4

Increases in real GDP over the past 60 years can actually underestimate growth in the standard of living for Arabs since the mid of the 20^th century because

A) the level of pollution in the mid of the 20^th century was much higher than it is today.
B) goods and services are more expensive today as compared to the mid of the 20^th century.
C) the quality of health care that exists today was not available in the mid of the 20^th century.
D) the crime rate was higher in the mid of the 20^th century than it is today.

Question 5

In 2009, countries in the Arab world suffered from a decline in the economic growth rate due to the global recession caused by the financial crisis. What effect did this have on inflation on the Arab world?

A) Inflation was increased in the Arab world.
B) Inflation was unaffected in the Arab world.
C) Inflation was decreased in the Arab world.
D) None of the above.

Question 6

When a mutual fund company issues mutual fund shares that it will buy back at a price that reflects the underlying value of the financial securities owned by the fund, this kind of mutual fund is called a(n) ________ mutual fund.

A) liquid
B) open -end
C) closed -end
D) stock and bond

Question 7

Under which of the following circumstances would the government be running a deficit?

A)
B)
C)
D)

Question 8

Under which of the following circumstances would private saving be positive in a closed economy?

A)
B)
C)
D)

Question 9

-Refer to Figure 17 -1. Which of the following is consistent with the graph depicted above?

A) Technological change increases the profitability of new investment.
B) An expected recession decreases the profitability of new investment.
C) The government runs a budget surplus.
D) Households become spendthrifts and begin to save less.

Question 10

What reason did the IMF give for predicting that Gulf States would recover to 4.5 percent in 2010 after being only 0.4 percent in 2009?

A) Lower levels of inflation in the US and Europe
B) A rebound in crude oil prices and production.
C) Reduced inflation throughout the region.
D) A fall in non -oil prices in the region