Principles of Macroeconomics

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Principles of MacroeconomicsEconomics 2002.01Principles of MacroeconomicsHomeworkTwo(Chapters5 and 6)11PointsThefollowing assignment contains 11multiple choice problems.Select the best answer.1.The three macroeconomic goalsare ___.a.full employment, balanced budgets, and stable pricesb.balanced budgets, stable prices, and stable growthc.balanced budgets, full employment, and stable growthd.stable growth, full employment, and stable pricesAnswer:d. stable growth, full employment, and stable prices2.The lowest point of a business cycle is the ___.a.the expansionb.the troughc.the contractiond.the peakAnswer:b. the trough3.Use the following information to determine the value of the price index.Base YearPriceQuantityCurrent YearPriceFood$5400$4Clothing$30150$50Shelter$20025$200a.price index =14,100b.price index = .82c.price index = 1.23d.price index =1.08Answer: price index = .824.Supposefive yearsago, the price index had a value of 135 and it now has a value of 147.Based on this information, the rate of inflationover the five yearsis ___.a.8.1%b.12.3%c.11.25%d.8.9%Answer: a. 8.1%

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