Multiple Choice
If an economy experiences a decrease in the money supply, what is most likely to happen to short-run unemployment?
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1. Introduction to Macroeconomics
Introduction to Economics
Multiple Choice
Consumption, investment, government spending, exports, and imports are components of which macroeconomic measure?
A
Unemployment Rate
B
Gross Domestic Product (GDP)
C
Interest Rate
D
Consumer Price Index (CPI)
Verified step by step guidance1
Identify the components listed in the problem: consumption, investment, government spending, exports, and imports.
Recall that these components are used to calculate a key macroeconomic measure that reflects the total economic output of a country.
Understand that the measure which sums consumption (C), investment (I), government spending (G), and net exports (exports (X) minus imports (M)) is the Gross Domestic Product (GDP).
Express the GDP formula as: \(GDP = C + I + G + (X - M)\).
Recognize that the other options (Unemployment Rate, Interest Rate, Consumer Price Index) do not use these components directly in their calculation.
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