Question 1

The growth rates of actual and potential GDP

Accepted Answer

A)  are similar in both the short and long run. 
B)  are similar in the short run but not the long run. 
C)  are similar in the long run but not the short run. 
D)  are different in both the short and long run. 
A)  are similar in both the short and long run. 
B)  are similar in the short run but not the long run. 
C)  are similar in the long run but not the short run. 
D)  are different in both the short and long run.

Question 2

Gladys agrees to lend Kay $1,000 for one year at a nominal rate of interest of 5 percent.At the end of the year prices have actually risen by 7 percent.

Accepted Answer

A)  Gladys earns extra real income. 
B)  Kay loses extra real income. 
C)  Kay receives extra real income. 
D)  Neither party gains or loses if the loan is repaid. 
A)  Gladys earns extra real income. 
B)  Kay loses extra real income. 
C)  Kay receives extra real income. 
D)  Neither party gains or loses if the loan is repaid.

Question 3

Hyperinflations are usually made possible by

Accepted Answer

A)  multinational corporations. 
B)  highly mobile international capital. 
C)  governments printing money rapidly. 
D)  higher and higher tax rates. 
A)  multinational corporations. 
B)  highly mobile international capital. 
C)  governments printing money rapidly. 
D)  higher and higher tax rates.

Question 4

Paying into a pension fund while you are earning wages and salaries is equivalent to

Accepted Answer

A)  borrowing money. 
B)  lending money. 
C)  withdrawing from a savings account. 
D)  paying off debt. 
A)  borrowing money. 
B)  lending money. 
C)  withdrawing from a savings account. 
D)  paying off debt.

Question 5

If ten years ago the price of a movie ticket was $5 and the average hourly wage was $10,and today the price of a movie ticket is $8 and the average hourly wage is $20,then

Accepted Answer

A)  movies are now relatively cheaper in terms of work hours. 
B)  movies are now relatively more expensive in terms of work hours. 
C)  the relative price of movies has remained constant. 
D)  workers now need to work longer hours to earn one movie ticket. 
A)  movies are now relatively cheaper in terms of work hours. 
B)  movies are now relatively more expensive in terms of work hours. 
C)  the relative price of movies has remained constant. 
D)  workers now need to work longer hours to earn one movie ticket.

Question 6

Does the existence of unemployment insurance eliminate the economic costs of unemployment?

Accepted Answer

While unemployment insurance reduces the

Question 7

Faster economic growth in the United States may lead to the serious macroeconomic problem of higher

Accepted Answer

A)  levels of unemployment. 
B)  federal budget deficits. 
C)  levels of inflation. 
D)  levels of poverty. 
A)  levels of unemployment. 
B)  federal budget deficits. 
C)  levels of inflation. 
D)  levels of poverty.

Question 8

In the analysis of potential GDP,labor and capital are considered

Accepted Answer

A)  inputs. 
B)  final goods and services. 
C)  byproducts of economic growth. 
D)  outputs. 
A)  inputs. 
B)  final goods and services. 
C)  byproducts of economic growth. 
D)  outputs.

Question 9

Inflation is a serious problem because inflation causes real wages to decline.

Accepted Answer

A) True 
 B)False

Question 10

If both borrowers and lenders anticipate the rate of inflation correctly,then

Accepted Answer

A)  borrowers will lose real income. 
B)  lenders will lose real income. 
C)  both borrowers and lenders will lose real income. 
D)  neither borrowers nor lenders will lose real income. 
A)  borrowers will lose real income. 
B)  lenders will lose real income. 
C)  both borrowers and lenders will lose real income. 
D)  neither borrowers nor lenders will lose real income.

Question 11

Frictional unemployment will typically be a short-term problem for someone between jobs.

Accepted Answer

A) True 
 B)False

Question 12

When you subtract the expected rate of inflation from the nominal rate of interest,you calculate the

Accepted Answer

A)  real rate of interest. 
B)  real rate of inflation. 
C)  expected rate of interest. 
D)  expected rate of price increases. 
A)  real rate of interest. 
B)  real rate of inflation. 
C)  expected rate of interest. 
D)  expected rate of price increases.

Question 13

Policy makers should manage aggregate demand so that it grows in line with the economy's capacity to produce.This task is the realm of

Accepted Answer

A)  growth policy. 
B)  stabilization policy. 
C)  labor policy. 
D)  inflation policy. 
A)  growth policy. 
B)  stabilization policy. 
C)  labor policy. 
D)  inflation policy.

Question 14

Saving is often discouraged by usury laws during inflationary periods because

Accepted Answer

A)  nominal rates of interest are kept above real rates of interest. 
B)  nominal rates of interest are kept below inflation rates. 
C)  nominal rates of interest are kept above inflation rates. 
D)  real rates of interest are kept above inflation rates. 
A)  nominal rates of interest are kept above real rates of interest. 
B)  nominal rates of interest are kept below inflation rates. 
C)  nominal rates of interest are kept above inflation rates. 
D)  real rates of interest are kept above inflation rates.

Question 15

Which of the following groups would have the highest unemployment rates?

Accepted Answer

A)  married men 
B)  white workers 
C)  college graduates 
D)  teenagers 
A)  married men 
B)  white workers 
C)  college graduates 
D)  teenagers

Question 16

Economists feel that taxing nominal capital gains imposes costs on the economy due to

Accepted Answer

A)  increased consumption. 
B)  reduced consumption. 
C)  increased investment. 
D)  reduced investment. 
A)  increased consumption. 
B)  reduced consumption. 
C)  increased investment. 
D)  reduced investment.

Question 17

An increase in the capital stock has the same effect on the production function as an increase in

Accepted Answer

A)  labor. 
B)  output. 
C)  GDP. 
D)  technology. 
A)  labor. 
B)  output. 
C)  GDP. 
D)  technology.

Question 18

Labor productivity is calculated by dividing GDP by

Accepted Answer

A)  population. 
B)  the price level. 
C)  capital stock 
D)  labor force. 
A)  population. 
B)  the price level. 
C)  capital stock 
D)  labor force.

Question 19

Inflation often bestows unearned income on

Accepted Answer

A)  homeowners. 
B)  lenders. 
C)  creditors. 
D)  fixed income receivers. 
A)  homeowners. 
B)  lenders. 
C)  creditors. 
D)  fixed income receivers.

Question 20

Recent research suggests that the federal minimum wage law

Accepted Answer

A)  clearly causes significant unemployment. 
B)  causes unemployment for teenagers. 
C)  causes unemployment for high wage workers. 
D)  may not cause much,if any,unemployment. 
A)  clearly causes significant unemployment. 
B)  causes unemployment for teenagers. 
C)  causes unemployment for high wage workers. 
D)  may not cause much,if any,unemployment.

The growth rates of actual and potential GDP

Gladys agrees to lend Kay $1,000 for one year at a nominal rate of interest of 5 percent.At the end of the year prices have actually risen by 7 percent.

Hyperinflations are usually made possible by

Paying into a pension fund while you are earning wages and salaries is equivalent to

If ten years ago the price of a movie ticket was $5 and the average hourly wage was $10,and today the price of a movie ticket is $8 and the average hourly wage is $20,then

Does the existence of unemployment insurance eliminate the economic costs of unemployment?

Faster economic growth in the United States may lead to the serious macroeconomic problem of higher

In the analysis of potential GDP,labor and capital are considered

Inflation is a serious problem because inflation causes real wages to decline.

If both borrowers and lenders anticipate the rate of inflation correctly,then

Frictional unemployment will typically be a short-term problem for someone between jobs.

When you subtract the expected rate of inflation from the nominal rate of interest,you calculate the

Policy makers should manage aggregate demand so that it grows in line with the economy's capacity to produce.This task is the realm of

Saving is often discouraged by usury laws during inflationary periods because

Which of the following groups would have the highest unemployment rates?

Economists feel that taxing nominal capital gains imposes costs on the economy due to

An increase in the capital stock has the same effect on the production function as an increase in

Labor productivity is calculated by dividing GDP by

Inflation often bestows unearned income on

Recent research suggests that the federal minimum wage law

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters

Exam 6: The Goals Of Macroeconomic Policy

The growth rates of actual and potential GDP

Gladys agrees to lend Kay $1,000 for one year at a nominal rate of interest of 5 percent.At the end of the year prices have actually risen by 7 percent.

Hyperinflations are usually made possible by

Paying into a pension fund while you are earning wages and salaries is equivalent to

If ten years ago the price of a movie ticket was $5 and the average hourly wage was $10,and today the price of a movie ticket is $8 and the average hourly wage is $20,then

Does the existence of unemployment insurance eliminate the economic costs of unemployment?

Faster economic growth in the United States may lead to the serious macroeconomic problem of higher

In the analysis of potential GDP,labor and capital are considered

Inflation is a serious problem because inflation causes real wages to decline.

If both borrowers and lenders anticipate the rate of inflation correctly,then

Frictional unemployment will typically be a short-term problem for someone between jobs.

When you subtract the expected rate of inflation from the nominal rate of interest,you calculate the

Policy makers should manage aggregate demand so that it grows in line with the economy's capacity to produce.This task is the realm of

Saving is often discouraged by usury laws during inflationary periods because

Which of the following groups would have the highest unemployment rates?

Economists feel that taxing nominal capital gains imposes costs on the economy due to

An increase in the capital stock has the same effect on the production function as an increase in

Labor productivity is calculated by dividing GDP by

Inflation often bestows unearned income on

Recent research suggests that the federal minimum wage law

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters