(7.) Economics Hl. Macroeconomics, Definitions.

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Macroeconomics Quizzes & Trivia

IB Economics HL. Definitions QUIZ. Section 3. Macroeconomics. Inflation, unemployment, income distribution.


Questions and Answers
  • 1. 
    "A sustained rise in price level" (over at least two consecutive quarters) What is being defined?
  • 2. 
    Using the exact same words (except the keyword, and neglecting those within brackets), define deflation!
  • 3. 
    "Inflation that occurs as a result of an increase in costs of production" What kind of inflation is this?
    • A. 

      Demand-pull inflation

    • B. 

      Cost-push inflation

    • C. 

      Stagflation

  • 4. 
    A very low rate of inflation (2-3 % a year) is known as [...] inflation
  • 5. 
    A very high rate of inflation (100 % a year or more) is known as [...] inflation
  • 6. 
    When short run aggregate supply contracts and price level increases simultaneously (that is, when inflation rate is high and real output decreases / economic growth is low), this is known as
    • A. 

      Demand-pull inflation

    • B. 

      Crowding out

    • C. 

      Stagflation

    • D. 

      Disinflation

  • 7. 
    Demand-pull inflation is inflation that occurs as a result of an increased ...
  • 8. 
    "People of working age who are without work, but willing to, able to, and actively seeking work" Is such a definition acceptable for the concept of unemployment?
    • A. 

      Yes

    • B. 

      No

  • 9. 
    A tax imposed on income (or wealth) is a ...
  • 10. 
    Write down the two most commonly used letters for the diagrammatic representation of "the economically active population"
  • 11. 
    Equilibrium unemployment is the lowest rate of unemployment that an economy can sustain over the long run. Therefore, the concept is better known by another name. Which?
    • A. 

      Real-wage unemployment

    • B. 

      Demand-deficient unemployment

    • C. 

      Natural unemployment

  • 12. 
    Write down the three types of natural unemployment using only the keywords (that is, leave out "unemployment") Any order will do, but don't start with the type of unemployment that starts with an "f"! Separate the words using the space bar (mellanslag)
  • 13. 
    A tax which increases more than proportionally with income is a ...
    • A. 

      Proportional tax

    • B. 

      Regressive tax

    • C. 

      Progressive tax

    • D. 

      Laffer curve

  • 14. 
    "The number of people who are unemployed expressed as a percentage of the total labor force" Write down what is being defined
  • 15. 
    How can "demand-deficient (cyclical) unemployment" be defined?
    • A. 

      Unemployment caused by trade unions/minimum wage policies negotiating wages higher than the labor market equilibrium

    • B. 

      Unemployment resulting from the fall of demand for a certain type of labor during certain times of the year

    • C. 

      Unemployment resulting from cyclical downturns in the economy

    • D. 

      Unemployment that occurs when there are conditions preventing the labor market from reaching labor market equilibrium

  • 16. 
    A long-term unemployed worker who has given up the search for work and thus no longer counts as unemployed is said to be a [...] worker.
  • 17. 
    "Unemployment that occurs when people are in between jobs or have left education and are waiting for their first job" What is being defined?
    • A. 

      Frictional unemployment

    • B. 

      Structural unemployment

    • C. 

      Seasonal unemployment

    • D. 

      Fisval

  • 18. 
    "A curve demonstrating the invrese relationship between the rate of inflation/rate of change of money wages) and the rate of unemployment in an economy" What is being defined?
  • 19. 
    The Laffer curve demonstrates the "parabolic" relationship between tax rate and the rate of change of money wages
    • A. 

      True

    • B. 

      False

  • 20. 
    One-way payments of money for which no money, good, or service is received in exchange are known as ...
  • 21. 
    A tax is a [...] tax if the proportion of income paid in tax falls as income rises (true for all indirect taxes)
    • A. 

      Direct tax

    • B. 

      Proportional tax

    • C. 

      Regressive tax

    • D. 

      Progressive tax

  • 22. 
    A tax which increases proportionally with income is a ...
  • 23. 
    When the borrowing of a government in order to stimulate the economy leads to businesses and individuals saving (demanding loanable funds) rather than spending/investing, this is called
    • A. 

      Multiplier effect

    • B. 

      Accelerator effect

    • C. 

      Real balance effect

    • D. 

      Crowding out