Economics concepts worksheet with answers

Unemployment caused by people moving between jobs is called:

1. ASeasonal unemployment
2. BStructural unemployment
3. CFrictional unemployment
4. DCyclical unemployment

Inflation is:

1. AA fall in unemployment
2. BA sustained rise in the general price level
3. CAn increase in the money supply, whatever happens to prices
4. DA rise in the price of one product

A progressive tax is one where:

1. AEveryone pays the same amount of tax
2. BEveryone pays the same percentage of income
3. CThe proportion of income paid falls as income rises
4. DThe proportion of income paid in tax rises as income rises

A Gini coefficient of 0 indicates:

1. AZero economic growth
2. BZero unemployment
3. CPerfect equality of income
4. DPerfect inequality of income

If the ECB raises its main interest rate, the most likely short-term effect is:

1. AAn immediate rise in GDP
2. BHigher borrowing and spending, which adds to inflationary pressure
3. CA fall in the value of the euro
4. DLower borrowing and spending, reducing inflationary pressure

The price of petrol rises sharply. What happens to the demand curve for large cars?

1. AIt becomes vertical
2. BIt shifts to the left
3. CThere is a movement along it
4. DIt shifts to the right

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

1. ARaise real interest rates by about 2 points
2. BHave no effect on nominal interest rates, so real interest rates fall by about 2 points
3. CRaise nominal interest rates by about 2 points, leaving real rates unchanged
4. DLower nominal interest rates by about 2 points

Okun's law describes:

1. AA negative relationship between output growth and changes in unemployment
2. BA positive relationship between inflation and nominal interest rates over time
3. CThe relationship between tax rates and revenue
4. DThe link between money supply and prices