Economics concepts worksheet with answers

Free printable Economics concepts worksheet: 8 problems from easy to exam level, with an answer key. Print it or save it as a PDF.

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1.Easy

Which list gives the four traditional factors of production?

  1. ALand, labour, capital and entrepreneurship
  2. BSupply, demand, price and quantity
  3. CWages, rent, interest and profit
  4. DMoney, labour, shares and land
2.Easy

Structural unemployment is caused by:

  1. AA mismatch between workers' skills or location and the jobs available
  2. BA temporary fall in aggregate demand
  3. CThe normal time that workers take to search for and move between jobs
  4. DSeasonal changes in demand for labour
3.Easy

The unemployment rate is calculated as:

  1. AThe number of unemployed divided by the total population
  2. BThe number of unemployed divided by the labour force
  3. CThe number of employed divided by the labour force
  4. DThe number of job vacancies divided by the population
4.Medium

A price ceiling set below the equilibrium price typically causes:

  1. AA surplus
  2. BAn increase in supply
  3. CNo change in the market
  4. DA shortage
5.Medium

The price of a good rises by 10% and quantity demanded falls by 20%. The price elasticity of demand is:

  1. A-0.5, so demand is inelastic
  2. B-2, so demand is inelastic
  3. C-2, so demand is elastic
  4. D-0.5, so demand is elastic
6.Medium

A country has 950 employed people and 50 unemployed people seeking work. Its unemployment rate is:

  1. A5.3%
  2. B95%
  3. C5%
  4. D50%
7.Hard

The "Taylor principle" says that, to stabilise inflation, a central bank should respond to a 1 percentage point rise in inflation by:

  1. ACutting the nominal rate
  2. BKeeping the nominal rate unchanged
  3. CRaising the nominal interest rate by more than 1 percentage point
  4. DRaising the nominal interest rate, but by less than 1 percentage point
8.Hard

The Fisher effect predicts that, in the long run, a permanent 2 percentage point rise in expected inflation will:

  1. ALower nominal interest rates by about 2 points
  2. BRaise real interest rates by about 2 points
  3. CRaise nominal interest rates by about 2 points, leaving real rates unchanged
  4. DHave no effect on nominal interest rates, so real interest rates fall by about 2 points

Answer key

  1. 1. A · Land, labour, capital and entrepreneurship
  2. 2. A · A mismatch between workers' skills or location and the jobs available
  3. 3. B · The number of unemployed divided by the labour force
  4. 4. D · A shortage
  5. 5. C · -2, so demand is elastic
  6. 6. C · 5%
  7. 7. C · Raising the nominal interest rate by more than 1 percentage point
  8. 8. C · Raise nominal interest rates by about 2 points, leaving real rates unchanged

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