Growth is advantageous to a nation because it:

1.   ?    promotes faster population growth.
2.   ?    lessens the burden of scarcity.
3.   ?    eliminates the economizing problem.
4.   ?    slows the growth of wants.

The immediate determinant of the volume of output and employment is the:

1.   ?    composition of consumer spending.
2.   ?    ratio of public goods to private goods production.
3.   ?    level of total spending.
4.   ?    size of the labor force.

The phase of the business cycle in which real GDP declines is called:

1.   ?    the peak.
2.   ?    a recovery.
3.   ?    a recession.
4.   ?    the trough.

The natural rate of unemployment is:

1.   ?    higher than the full-employment rate of unemployment.
2.   ?    lower than the full-employment rate of unemployment.
3.   ?    that rate of unemployment occurring when the economy is at its potential output.
4.   ?    found by dividing total unemployment by the size of the labor force.

During periods of "full employment" the:

1.   ?    burden of unemployment is quite evenly distributed among males and females, blacks and whites, and young and old workers.
2.   ?    unemployment rate for teenagers is below the rate for the labor force as a whole.
3.   ?    unemployment rate for women is considerably lower than that for men.
4.   ?    unemployment rate for blacks is about twice the rate for whites.

The relationship between the size of the GDP gap and the unemployment rate is:

1.   ?    direct.
2.   ?    inverse.
3.   ?    undefined.
4.   ?    direct during recession, but inverse during expansion.

Okun's law:

1.   ?    measures the tradeoff between the rate of inflation and the rate of unemployment.
2.   ?    indicates the number of years it will take for a constant rate of inflation to cause the price level to double.
3.   ?    quantifies the relationship between nominal and real incomes.
4.   ?    shows the relationship between the unemployment rate and the size of the GDP gap.

Demand-pull inflation:

1.   ?    occurs when prices of resources rise, pushing up costs and the price level.
2.   ?    occurs when total spending exceeds the economy's ability to provide output at the existing price level.
3.   ?    occurs only when the economy has reached its absolute production capacity.
4.   ?    is also called cost-push inflation.

Cost-push inflation may be caused by:

1.   ?    a decline in per unit production costs.
2.   ?    a decrease in wage rates.
3.   ?    a negative supply shock.
4.   ?    an increase in resource availability.

Inflation initiated by increases in wages or other resource prices is labeled:

1.   ?    demand-pull inflation.
2.   ?    demand-push inflation.
3.   ?    cost-push inflation.
4.   ?    cost-pull inflation.