19. If average labour productivity increases while population and the number of employed workers remain constant, then total output:
A. increases
B. decreases
C. remains constant
D. may increase or decrease
20. In Econland, total output is $6 billion, population equals 250 000 people, and, of these, 200 000 are employed workers. Output per person in Econland equals _______ and average labour productivity equals ______.
A. $30 000; $24 000
B. $24 000; $30 000
C. $30 000; $30 000
D. $24 000; $24 000
21. If average labour productivity increases, then, the same number of employed workers will always produce:
A. more total output
B. more output per person
C. less total output
D. less output per person
22. A particularly strong expansion is called:
A. output excess
B. boom
C. growth recession
D. bonanza
23. When jobs are hard to find, profits are low, few wage increases are given, and many companies go out of business, the economy is in:
A. expansion
B. boom
C. recession
D. shortage
24. The fraction of people who would like to be employed, but can't find work is called the:
A. inflation rate
B. average labour productivity rate
C. unemployment rate
D. participation rate
25. Unemployment typically _______ during a recession.
A. only exists
B. rises
C. falls
D. remains constant
26. The unemployment rate is the:
A. number of workers unemployed
B. number of workers in the labour force
C. percentage of the population that is out of work
D. percentage of the labour force that is out of work
27. The rate at which prices in general are increasing is called the:
A. inflation rate
B. standard of living
C. unemployment rate
D. trade balance
28. A trade imbalance occurs when:
A. exports from and imports to a country suddenly decline
B. the quantity of imports equals the quantity of exports, but is large relative to total output
C. a country does not import or export any goods or services
D. the quantity of a country's exports differs significantly from the quantity of imports
29. A nation's central bank:
A. determines the nation's fiscal policy
B. controls the nation's monetary policy
C. is the bank that holds deposits for the most customers in the nation
D. is the bank that has the most neutral lending policy
30. When government revenue is less than government spending, the nation has a:
A. government budget surplus
B. trade surplus
C. government budget deficit
D. trade deficit
31. A government decision to privatise a sector of the economy formerly operated by the government is an example of _____ policy.
A. aggregation
B. monetary
C. fiscal
D. structural
32. Decisions to reduce the money supply are made by _____ and are an example of _____ policy.
A. the Prime Minister; monetary
B. the Reserve Bank; monetary
C. Senate; monetary
D. the Reserve Bank; fiscal
33. A decrease in income tax is an example of ______ policy.
A. aggregation
B. fiscal
C. monetary
D. structural
34. Deregulation of the airline, trucking, telephone and electric utility industries are examples of _______ policy.
A. aggregation
B. fiscal
C. monetary
D. structural
35. If tax revenues equal 20% of total output and government expenditures equal 25% of total output, then there is a:
A. government budget surplus
B. trade surplus
C. government budget deficit
D. trade deficit
36. Which of the following would be considered an example of monetary policy?
A. A broad government initiative to reduce the country's reliance on agriculture and promote high-technology industries
B. A reduction in income tax rates
C. Provision of additional cash to the banking system
D. A decision by a developing country to reduce government control of the economy and to become more market-oriented
37. Positive analysis:
A. recommends whether a policy should be implemented
B. aims at determining only the economic consequences of a particular policy
C. depends on the analyst's values
D. determines whether the consequences of a policy are desirable
38. Normative analysis:
A. addresses the question of whether a policy should be used
B. aims at determining only the economic consequences of a particular policy
C. does not depend on the analyst's values
D. focuses on the actual effects of a policy
39. Which of the following statements is positive?