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    National Economy, Circular Flow, and Economic Statistics

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    I would really appreciate help with the following multiple choice questions.

    1. Which is true of leakages and injections in the circular flow?
    a. Leakages minus injections equal GDP.
    b. Injections minus leakages equal GDP.
    c. Leakages minus injections equal zero in equilibrium.
    d. Domestic leakages must equal domestic injections.

    2. The consumer price index measures changes in
    a. the prices of all goods and services
    b. the prices of goods that are sold
    c. the total cost of a specific market basket of consumer goods
    and services
    d. the total costs of all goods and services

    3. The unemployment rate is the
    a. percentage of people in the economy who do not hold jobs
    b. percentage of the labor force that does not have a job
    c. number of people in the economy who have given up looking for
    employment
    d. number of people in the labor force without jobs

    4. Which of the following people would be classified as unemployed?
    a. a person who wants a job as a fashion model but cannot find
    work in that field
    b. someone who quits a part-time job to attend school full-time
    c. someone who gives up looking for a job
    d. a person who works at a job that underemploys his or her
    skills

    5. Frictional unemployment refers to unemployment that results from
    a. a mismatch of skills
    b. being in the wrong geographical location
    c. taking the time to find the best job
    d. seasonal decreases in demand for labor

    6. If the aggregate demand curve shifts rightward,
    a. the price level increases and output decreases
    b. the resulting increase in the price level is usually called
    cost-push inflation
    c. the resulting increase in the price level is usually called
    demand-pull inflation
    d. the price level increases only if there is also a leftward
    shift of the aggregate supply curve

    7. The Consumer Price Index measures the cost of
    a. all goods and services produced in the U.S. economy
    b. all goods produced in the U.S. economy
    c. a fixed market basket of consumer goods and services produced
    in the U.S. economy
    d. a fixed market basket of producer goods and services

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    Solution Preview

    1. Which is true of leakages and injections in the circular flow?
    c. Leakages minus injections equal zero in equilibrium.

    Leakages from the income stream are savings, taxes, and imports. Injections into the income stream are investment, government purchases, transfer payments and exports. If they do not equal, the economy is not balanced in terms of expenditures and income.

    2. The consumer price ...

    Solution Summary

    Multiple choice questions related to economic statistics are each briefly discussed in this solution.

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