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BUSINESS ECONOMICS CEC2 532-751 & 761
PRACTICE MACROECONOMICS MULTIPLE CHOICE QUESTIONS

Warning: These questions have been posted to give you an opportunity to practice with the multiple choice format of questioning and to help you review and understand more deeply the material taught. In no way should you assume that the level of difficulty of the multiple- choice questions shown here is the same as that of the questions to be given in the exam.

1. Expansionary monetary policy (a) tends to lead to an appreciation of a nation's currency. (b) usually has no effect on a currency's exchange value. (c) tends to lead to a depreciation of the currencies of other nations. (d) tends to lead to a depreciation of a nation's currency. 2. If the number of people classified as unemployed is 20,000 and the number of people classified as employed is 230,000, what is the unemployment rate? (a) 8% (b) 8.7% (c) 9.2% (d) 11.5% 3. It is often true that as the economy begins to recover from a recession the unemployment rate rises. Which of the following statements would be the best explanation for this? (a) The unemployment rate would rise because as the economy initially recovers from a recession the demand for goods and services falls, so the demand for workers falls. (b) As the economy begins to recover from a recession, workers who were previously discouraged about their chances of finding a job begin to look for work again. (c) The unemployment rate seems to rise as the economy begins to recover from a recession because of errors in the way the data are collected. (d) As the economy initially recovers from a recession, firms do not immediately increase the number of workers they hire. Firms wait to hire more individuals until they are convinced that the recovery is strong. 4. If an individual who cannot find a job because his or her job skills have become obsolete this

is…...

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