MACROECONOMICS EXAMINATION QUESTIONS AND CORRECT ANSWER WITH EXPLANATION GRADED A+ STUDY GUIDE

MACROECONOMICS EXAMINATION QUESTIONS AND
CORRECT ANSWER WITH EXPLANATION GRADED A+
STUDY GUIDE SOUTHERN NEW HAMPSHIRE UNIVERSITY
1. Macroeconomics studies:
A. The economy as a whole
B. Individual firms only
C. Household budgeting only
D. Single markets only
Answer: A
Rationale: It focuses on aggregate economic variables.

2. Gross Domestic Product (GDP) measures:
A. Total value of goods and services produced in a country
B. Population size
C. Inflation only
D. Employment only
Answer: A
Rationale: GDP is total output.

3. Nominal GDP is:
A. GDP measured at current prices
B. Inflation-adjusted GDP
C. Real GDP
D. Net GDP
Answer: A
Rationale: Uses current market prices.

4. Real GDP is:
A. GDP adjusted for inflation
B. GDP at current prices
C. GDP minus taxes
D. GDP per capita
Answer: A
Rationale: Reflects actual output changes.

5. GDP per capita is:
A. GDP divided by population

, B. Total GDP only
C. Inflation rate
D. Unemployment rate
Answer: A
Rationale: Measures average income per person.

6. Economic growth refers to:
A. Increase in real GDP over time
B. Increase in prices only
C. Increase in population only
D. Decrease in output
Answer: A
Rationale: Expansion of production.

7. Inflation is:
A. General rise in price level
B. Fall in prices
C. Increase in wages only
D. Increase in output
Answer: A
Rationale: Rising price levels.

8. Deflation is:
A. General fall in price level
B. Inflation increase
C. Wage increase
D. Tax increase
Answer: A
Rationale: Declining prices.

9. Stagflation is:
A. Inflation with unemployment
B. Growth with inflation
C. Deflation with growth
D. No inflation
Answer: A
Rationale: Economic stagnation + inflation.

10. Unemployment refers to:
A. People willing but unable to find jobs

, B. People not working by choice
C. Retired workers
D. Students only
Answer: A
Rationale: Labor market failure.

11. Frictional unemployment is:
A. Short-term job search unemployment
B. Long-term structural unemployment
C. Seasonal unemployment only
D. Voluntary retirement
Answer: A
Rationale: Transition between jobs.

12. Structural unemployment is caused by:
A. Skill mismatch in the economy
B. Short vacations
C. Inflation
D. High demand
Answer: A
Rationale: Changes in industry structure.

13. Cyclical unemployment is due to:
A. Economic recessions
B. Skills shortage
C. Seasonal factors
D. Voluntary quitting
Answer: A
Rationale: Business cycle downturns.

14. Full employment means:
A. No cyclical unemployment
B. Zero unemployment
C. Zero inflation
D. Maximum GDP
Answer: A
Rationale: Natural unemployment only exists.

15. Inflation rate is measured using:
A. Consumer Price Index (CPI)