1. There is an output gap when
- productivity is continuously higher in one country than in another.
- national output is higher or lower than it would have been if the country had grown continuously at its trend rate of growth.
- unemployment occurs because the rate of economic growth increase above its trend rate of growth.
- the economy is continuously producing more capital goods than consumer goods over a period of time.
1 of 20
Other questions in this quiz
2. Which one of the following is a measure of productivity?
- the total amount of output produced each month.
- output divided by employment.
- the annual percentage increase in production.
- the quantity of capital equipment used divided by its price.
3. What are goods provided by the government for people who are deemed to need them called?
- Negative externalities.
- Demerit goods.
- Merit goods.
- Positive externalities.
4. An increase in imports of consumer goods is most likely to have been caused by a
- fall in the exchange rate.
- rise in household saving.
- rise in household disposable income.
- rise in direct taxation.
5. A decision by the government to introduce and expansionary fiscal policy would be less likely to succeed in reducing unemployment if a country had
- a high marginal propensity to import.
- a fixed exchange rate.
- a high level of business and consumer confidence.
- a high level of cyclical unemployment and spare capacity.