Two Americans win Nobel economics prize for research on boom-and-bust cycles

Study the questions and tasks

Work through the material below, or start the interactive practice above to complete an attempt. Try the exercises before opening any answer or transcript sections, then use them to review your work.

Practice level

B2. Try this level if you can follow the instructions and understand most of the language; choose an earlier level if you need more support.

Question formats

Single choice

How to approach this practice

Read the passage for its main idea, then return to the relevant sentence or paragraph for each question. Base answers on the passage.

1. Question 1 · Single choice

   Choose one answer.

   What is the article mainly about?

   Return to the passage, recording or visual
   1. A new theory about international trade
   2. Research explaining how economies can become more stable
   3. The history of the five original Nobel Prizes
   4. Recent changes at two American universities
   Check answers and explanations

   Answer

   Research explaining how economies can become more stable

   It explains the prizewinning economists’ contributions to economic stability.

   Two U.S. economists have won the 2026 Nobel Memorial Prize in Economic Sciences for research on how to reduce boom-and-bust cycles and limit both inflation and unemployment.

2. Question 2 · Single choice

   Choose one answer.

   What relationship does the article establish between expectations and spending?

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   1. Expectations can influence spending before problems arrive
   2. Spending always increases when incomes become uncertain
   3. Consumers ignore predictions about future economic conditions
   4. Purchasing power has no connection with household decisions
   Check answers and explanations

   Answer

   Expectations can influence spending before problems arrive

   Expected future difficulties can cause consumers to cut spending early.

   If consumers believe that economic conditions may worsen, they may reduce their spending before problems fully appear.

3. Question 3 · Single choice

   Choose one answer.

   What does “These decisions” refer to in paragraph four?

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   1. Businesses’ decisions about long-term costs
   2. Governments’ decisions about central banks
   3. Households’ decisions about what to purchase
   4. Academies’ decisions about prize winners
   Check answers and explanations

   Answer

   Households’ decisions about what to purchase

   The phrase refers to households’ choices about what to buy.

   These decisions depend not only on people’s current purchasing power but also on what they expect their future incomes to be.

4. Question 4 · Single choice

   Choose one answer.

   Why does the article mention the pandemic and supply problems?

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   1. To explain why Nobel ceremonies changed location
   2. To provide recent examples of difficult economic conditions
   3. To compare two different university research programs
   4. To show that businesses set prices without forecasting
   Check answers and explanations

   Answer

   To provide recent examples of difficult economic conditions

   These examples show why economic instability research remains relevant.

   The pandemic forced millions of people out of work, while later supply problems pushed up the cost of living.

5. Question 5 · Single choice

   Choose one answer.

   How is Hall’s work different from Woodford’s work?

   Return to the passage, recording or visual
   1. Hall studied demand; Woodford studied supply and prices
   2. Hall studied unemployment; Woodford studied Nobel history
   3. Hall studied central banks; Woodford studied household incomes
   4. Hall studied inflation; Woodford studied consumer purchasing power
   Check answers and explanations

   Answer

   Hall studied demand; Woodford studied supply and prices

   Hall studied demand, while Woodford examined supply and business pricing.

   Hall studied demand and the way households decide what to buy.

6. Question 6 · Single choice

   Choose one answer.

   What conclusion about businesses is supported by the article?

   Return to the passage, recording or visual
   1. Businesses change prices whenever consumers request it
   2. Businesses use forecasts partly to manage pricing costs
   3. Businesses cannot predict economic conditions at all
   4. Businesses focus only on current purchasing power
   Check answers and explanations

   Answer

   Businesses use forecasts partly to manage pricing costs

   Businesses may avoid frequent price changes because changing prices costs money.

   Changing prices has traditionally been costly, so companies often try to predict future conditions and set prices that will cover their costs over a longer period.

7. Question 7 · Single choice

   Choose one answer.

   How does the final sentence qualify the award’s description?

   Return to the passage, recording or visual
   1. It says the award is given only to governments
   2. It explains that the award is not one of the five original prizes
   3. It suggests Alfred Nobel personally selected the winners
   4. It states that economics was the first Nobel category
   Check answers and explanations

   Answer

   It explains that the award is not one of the five original prizes

   It clarifies that this memorial prize differs from five original prizes.

   The prize is a memorial award honoring Alfred Nobel rather than one of the five original Nobel Prizes.

What to review next

Find the words that support each answer. For a mistake, compare the question with the evidence and identify the detail or inference you missed.

A focused practice result shows how you did on these tasks. Use several activities across skills to decide what to study next; one practice score does not certify an overall CEFR level.

Before you practise: a worked example

Look for evidence in the text. Separate what the writer says from what you already know about the topic.

The library normally closes at six, but on Fridays it stays open until eight. When does it close on Friday?

The answer is eight. But introduces an exception to the normal closing time, so the first time mentioned is not the answer.

This teaching example is separate from the scored questions. After your test, compare any mistakes with the explanation and revisit the topic before trying again.