01
True or false
1 point
Inflation slows from 4% to 2%. This means the general price level is falling.
Free Practice Quiz Question List
4 Reading Key Economic Indicators Online Quiz Questions
Use this free practice quiz with 20 questions to review 4 Reading Key Economic Indicators, test your knowledge, and prepare for your next test or exam.
20 questions
02
Fill in the blank
1 point
To avoid counting the same output more than once, GDP counts only goods and services.
03
Choose one
1 point
Why does the expenditure approach subtract imports when calculating GDP?
- A
Imports are subtracted because they are always harmful to economic growth.
- B
Imports are subtracted because GDP counts production within the country, not the buyer's location.
- C
Imports are subtracted because they are already included in government purchases.
- D
Imports are subtracted because GDP measures only goods and excludes services.
04
Fill in the blank
1 point
Under the official labor-force definition, a jobless person who is available to work must also be for a job to be counted as unemployed.
05
True or false
1 point
If some job seekers stop actively looking and leave the labor force, the unemployment rate could fall even if the number of people without jobs does not improve.
- A
True
- B
False
06
Choose one
1 point
Real GDP is rising, but unemployment remains high. Which interpretation is consistent with this pattern?
- A
It proves that unemployment statistics are incorrect.
- B
It means GDP must be measuring consumer prices rather than production.
- C
It can occur if output improves before hiring, productivity rises, or labor-force participation changes.
- D
It shows that unemployment has no relationship to economic activity.
07
Written response
1 point
Which GDP measure is adjusted for price changes to help compare production across time? Enter the measure's name.
08
Written response
1 point
A CPI index rises from 200 to 206 over a year. What is the percentage change? Enter the answer as a number in percentage points; the answer will be displayed with a % sign.
09
Choose one
1 point
Which statement correctly distinguishes the Consumer Price Index (CPI) from the GDP price index?
- A
CPI measures prices of domestically produced output, while the GDP price index covers consumer purchases only.
- B
CPI tracks prices paid by consumers for a representative basket, while the GDP price index reflects prices of domestically produced output.
- C
CPI measures unemployment, while the GDP price index measures total production.
- D
CPI and the GDP price index necessarily measure the same set of prices.
10
Choose one
1 point
Which statement best describes the timing and revision of these economic indicators?
- A
GDP is estimated quarterly and may be revised; CPI and unemployment statistics are generally released monthly.
- B
All three indicators are released monthly and are never revised.
- C
GDP is released monthly, while CPI and unemployment are estimated quarterly.
- D
GDP is estimated quarterly but cannot be revised; CPI and unemployment statistics are released annually.
11
Choose one
1 point
Nominal GDP rises by 5% while real GDP rises by 2%. Which conclusion is best supported?
- A
Prices in the consumer basket rose exactly 3%, and output did not change.
- B
The difference is broadly associated with price increases in goods and services included in GDP, but it is not necessarily identical to consumer inflation.
- C
Domestic output must have fallen by 3%.
- D
The figures prove that every price in the economy rose by exactly 3%.
12
Written response
1 point
A labor force contains 80 million people, of whom 4 million are unemployed. What is the unemployment rate? Enter the answer as a number in percentage points; the answer will be displayed with a % sign.
13
Choose all
1 point
Select all conclusions supported by the described relationships among real GDP, unemployment, and inflation.
- A
Falling real GDP together with rising unemployment is often consistent with weakening economic activity and fewer job opportunities.
- B
High inflation with weak real GDP and rising unemployment proves that inflation caused the unemployment increase.
- C
High inflation alongside weak real GDP and rising unemployment indicates that price pressures and labor-market weakness are occurring together, but the indicators alone do not identify the cause.
- D
Whenever real GDP falls, unemployment must rise by the same percentage.
14
Open ended
1 point
Suppose real GDP is rising, unemployment remains high, and inflation slows from 4% to 2%. Explain what each indicator says about current economic conditions, give one reason GDP and unemployment might move differently, and state one conclusion these indicators alone cannot establish.
15
Choose one
1 point
What does gross domestic product (GDP) measure?
- A
The total income received by every household in the country
- B
The market value of final goods and services produced within the country during a period
- C
The percentage of people in the labor force who are seeking work
- D
The average change in prices paid by consumers
16
Choose one
1 point
Which set of prices does the Consumer Price Index (CPI) track?
- A
Prices of all goods and services produced domestically, including exports
- B
The market value of final goods and services produced within a country
- C
Prices paid by consumers for a representative basket of goods and services
- D
The share of the labor force that is jobless and actively seeking work
17
True or false
1 point
If inflation slows from 4% to 2%, the general price level is falling.
- A
True
- B
False
18
Written response
1 point
Which measure of GDP is adjusted for price changes to help compare production across time?
19
Choose one
1 point
In the expenditure formula GDP = C + I + G + (X − M), why are imports (M) subtracted?
- A
Imports are not purchased by consumers.
- B
GDP counts production within the country, not where the buyer is located.
- C
Imports are already included in government purchases.
- D
Subtracting imports adjusts GDP for changes in consumer prices.
20
Choose all
1 point
Using the expenditure approach, which changes directly increase one or more spending components of GDP=C+I+G+(X−M)? Select all that apply.
- A
Households increase their spending on goods and services.
- B
Businesses increase purchases of equipment for productive use.
- C
The government purchases road construction services.
- D
The government collects more tax revenue.
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