Economics concepts worksheet with answers

A common rule of thumb defines a recession as:

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

Unemployment caused by people moving between jobs is called:

1. AStructural unemployment
2. BFrictional unemployment
3. CSeasonal unemployment
4. DCyclical unemployment

A progressive tax is one where:

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

A public good is:

1. ARival and excludable
2. BAny good bought by the government
3. CProvided only by private firms
4. DNon-rival and non-excludable

A Gini coefficient of 0 indicates:

1. APerfect inequality of income
2. BZero economic growth
3. CZero unemployment
4. DPerfect equality of income

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

1. A2%
2. B1.5%
3. C10%
4. D24%

The "convergence hypothesis" from the Solow model predicts that:

1. AAll countries will eventually have the same population
2. BExchange rates converge to a fixed value
3. CRich countries always grow faster than poor ones, because they have more capital
4. DPoorer countries with similar fundamentals tend to grow faster than richer ones

In the Solow growth model, sustained long-run growth in output per worker comes from:

1. ATechnological progress
2. BGovernment budget deficits
3. CPopulation growth
4. DA higher saving rate alone