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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Name: ____________________   Date: ____________

1.Easy

Which statement is a normative statement?

  1. AThe government should raise the minimum wage
  2. BUnemployment fell to 4% in June
  3. CHigher prices reduce quantity demanded
  4. DThe minimum wage rose by 3% last year
2.Easy

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
3.Easy

The current account of the balance of payments mainly records:

  1. APurchases and sales of foreign companies, shares, bonds and other assets
  2. BTrade in goods and services, primary income and current transfers
  3. CThe central bank's interest rate decisions
  4. DChanges in the government's debt
4.Medium

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

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

Rising consumer confidence would most likely:

  1. AHave no effect on the economy
  2. BShift aggregate supply to the left
  3. CShift aggregate demand to the right
  4. DShift aggregate demand to the left
6.Medium

In an oligopoly, firms are typically:

  1. AA single seller in the market
  2. BCompletely unregulated by competition law
  3. CMany and too small to affect the price
  4. DFew and interdependent in their decisions
7.Hard

The time-inconsistency problem in monetary policy (Kydland and Prescott) is a key argument for:

  1. AAbolishing central banks entirely
  2. BIndependent central banks with a credible commitment to low inflation
  3. CGovernments setting interest rates directly, especially before elections
  4. DFixing the money supply at zero growth
8.Hard

Which is a key difference between the CPI and the GDP deflator?

  1. AThe CPI covers investment goods; the GDP deflator does not
  2. BThe CPI includes prices of imported consumer goods; the GDP deflator covers only domestically produced goods
  3. CThey always give exactly the same inflation rate
  4. DThe GDP deflator includes imported goods; the CPI does not

Answer key

  1. 1. A · The government should raise the minimum wage
  2. 2. A · Two consecutive quarters of falling real GDP
  3. 3. B · Trade in goods and services, primary income and current transfers
  4. 4. A · It shifts to the left
  5. 5. C · Shift aggregate demand to the right
  6. 6. D · Few and interdependent in their decisions
  7. 7. B · Independent central banks with a credible commitment to low inflation
  8. 8. B · The CPI includes prices of imported consumer goods; the GDP deflator covers only domestically produced goods

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