Economics concepts worksheet with answers

A cartel is:

1. AA trade union that negotiates wages
2. BA group of firms that agree to coordinate prices or output
3. CA government agency that regulates prices
4. DA single firm that controls the whole market for a product or service

A tariff is:

1. AA subsidy for exporters
2. BA limit on the quantity of imports
3. CA ban on all foreign trade
4. DA tax on imported goods

A common rule of thumb defines a recession as:

1. AAny month with rising unemployment
2. BA fall in the stock market of 10%
3. CA year with inflation above 5%
4. DTwo consecutive quarters of falling real GDP

If demand for a product is price inelastic, a price increase will:

1. AIncrease total revenue
2. BDecrease total revenue
3. CReduce quantity demanded to zero
4. DLeave total revenue unchanged

A savings account pays a nominal interest rate of 6% and inflation is 4%. The approximate real interest rate is:

1. A24%
2. B2%
3. C10%
4. D1.5%

In perfect competition in the long run, firms earn:

1. ALosses forever
2. BZero economic profit
3. CMonopoly profits
4. DLarge economic profits

The Phillips curve originally suggested:

1. AThat higher taxes always reduce inflation
2. BA trade-off between inflation and unemployment in the short run
3. CThat inflation and unemployment always rise and fall together in the short run
4. DThat unemployment has no link to inflation

Using the "rule of 70", an economy growing at 7% per year will double its real GDP in about:

1. A49 years
2. B70 years
3. C7 years
4. D10 years