Question 1

Americans would probably be supportive of

Accepted Answer

A)  strict controls on hours of work. 
B)  limits on income potential. 
C)  mandatory work limits. 
D)  loose controls on economic activities. 
A)  strict controls on hours of work. 
B)  limits on income potential. 
C)  mandatory work limits. 
D)  loose controls on economic activities.

Question 2

The growth of the labor force and the growth of labor productivity help determine the rate of GDP growth.

Accepted Answer

A) True 
 B)False

Question 3

To protect themselves from the effects of inflation,lenders try to estimate the expected rate of inflation.

Accepted Answer

A) True 
 B)False

Question 4

When a lender underestimates the rate of inflation,

Accepted Answer

A)  purchasing power is redistributed to the lender. 
B)  purchasing power is redistributed to the borrower. 
C)  the real rate of interest will be higher than expected. 
D)  the nominal interest rate was set too low. 
A)  purchasing power is redistributed to the lender. 
B)  purchasing power is redistributed to the borrower. 
C)  the real rate of interest will be higher than expected. 
D)  the nominal interest rate was set too low.

Question 5

Adding together the growth rate of labor input and the growth rate of labor productivity yields the growth rate of

Accepted Answer

A)  nominal GDP. 
B)  actual GDP. 
C)  potential GDP. 
D)  final GDP. 
A)  nominal GDP. 
B)  actual GDP. 
C)  potential GDP. 
D)  final GDP.

Question 6

The nominal rate of interest is the difference between the real rate and the expected rate of inflation.

Accepted Answer

A) True 
 B)False

Question 7

Discouraged workers are included in the

Accepted Answer

A)  labor force category. 
B)  unemployed category. 
C)  not in the labor force category. 
D)  employed category. 
A)  labor force category. 
B)  unemployed category. 
C)  not in the labor force category. 
D)  employed category.

Question 8

The program of unemployment insurance in the United States was created during the

Accepted Answer

A)  Great Depression. 
B)  Reagan recession. 
C)  Kennedy administration. 
D)  Great Society. 
A)  Great Depression. 
B)  Reagan recession. 
C)  Kennedy administration. 
D)  Great Society.

Question 9

Which of the following groups would most likely to benefit from inflation?

Accepted Answer

A)  borrowers 
B)  lenders 
C)  creditors 
D)  pensioners 
A)  borrowers 
B)  lenders 
C)  creditors 
D)  pensioners

Question 10

Technological change or the effects of automation cause

Accepted Answer

A)  structural unemployment. 
B)  frictional unemployment. 
C)  seasonal unemployment. 
D)  cyclical unemployment. 
A)  structural unemployment. 
B)  frictional unemployment. 
C)  seasonal unemployment. 
D)  cyclical unemployment.

Question 11

From 1991 to 2007,the rate of inflation in the U.S.has been

Accepted Answer

A)  zero. 
B)  between zero and 2.1%. 
C)  between 1.6% and 4.1%. 
D)  between 3.2% and 7.2%. 
A)  zero. 
B)  between zero and 2.1%. 
C)  between 1.6% and 4.1%. 
D)  between 3.2% and 7.2%.

Question 12

Potential GDP is an estimate of the economy's ability to produce goods and services if the

Accepted Answer

A)  labor force is fully employed. 
B)  price level is stable. 
C)  trade balance is zero. 
D)  federal budget is balanced. 
A)  labor force is fully employed. 
B)  price level is stable. 
C)  trade balance is zero. 
D)  federal budget is balanced.

Question 13

Sharon buys some common stock in 1990 for $10,000 and sells it in 2000 for $15,000.During the same period,prices have risen by 75 percent.The net result of Sharon's stock purchases is that she will

Accepted Answer

A)  pay no taxes because she earned negative real capital gains. 
B)  lose purchasing power and have to pay taxes anyway. 
C)  earn a real capital gain of $5,000 plus 75 percent. 
D)  earn a real capital gain of $15,000 minus 75 percent. 
A)  pay no taxes because she earned negative real capital gains. 
B)  lose purchasing power and have to pay taxes anyway. 
C)  earn a real capital gain of $5,000 plus 75 percent. 
D)  earn a real capital gain of $15,000 minus 75 percent.

Question 14

If actual inflation is less than the expected rate of inflation,then probably

Accepted Answer

A)  the borrower gains at the expense of the lender. 
B)  neither the borrower nor the lender gains. 
C)  the lender gains at the expense of the borrower. 
D)  the purchasing power of the borrower is increased. 
A)  the borrower gains at the expense of the lender. 
B)  neither the borrower nor the lender gains. 
C)  the lender gains at the expense of the borrower. 
D)  the purchasing power of the borrower is increased.

Question 15

If the price of pizzas has risen from $4 to $5 at the same time that the price of an hour of spinning class has risen from $20 to $30,then

Accepted Answer

A)  pizzas have become relatively more expensive. 
B)  spinning classes have become relatively more expensive. 
C)  the relative prices of pizzas and spinning classes have remained constant. 
D)  workers' real income must have decreased. 
A)  pizzas have become relatively more expensive. 
B)  spinning classes have become relatively more expensive. 
C)  the relative prices of pizzas and spinning classes have remained constant. 
D)  workers' real income must have decreased.

Question 16

Unemployment insurance cannot eliminate the national costs of lost output due to unemployed labor.

Accepted Answer

A) True 
 B)False

Question 17

Persons who have given up looking for work are classified as

Accepted Answer

A)  unemployed. 
B)  discouraged workers. 
C)  in the labor force. 
D)  temporarily unemployed. 
A)  unemployed. 
B)  discouraged workers. 
C)  in the labor force. 
D)  temporarily unemployed.

Question 18

Compared to the unemployed during the Great Depression,persons unemployed in today's economy are

Accepted Answer

A)  worse off due to higher price levels. 
B)  worse off due to higher rates of unemployment in the 1990s. 
C)  better off due to unemployment insurance. 
D)  better off due to lower price levels. 
A)  worse off due to higher price levels. 
B)  worse off due to higher rates of unemployment in the 1990s. 
C)  better off due to unemployment insurance. 
D)  better off due to lower price levels.

Question 19

An increase in the capital stock would be expected to

Accepted Answer

A)  decrease the labor force. 
B)  increase the level of output. 
C)  decrease real GDP per capita. 
D)  increase real GDP per capita. 
A)  decrease the labor force. 
B)  increase the level of output. 
C)  decrease real GDP per capita. 
D)  increase real GDP per capita.

Question 20

Why do environmentalists worry about faster economic growth? Economists concede that faster growth is not always better.Why?

Accepted Answer

Environmentalists worry that the sheer i

Americans would probably be supportive of

The growth of the labor force and the growth of labor productivity help determine the rate of GDP growth.

To protect themselves from the effects of inflation,lenders try to estimate the expected rate of inflation.

When a lender underestimates the rate of inflation,

Adding together the growth rate of labor input and the growth rate of labor productivity yields the growth rate of

The nominal rate of interest is the difference between the real rate and the expected rate of inflation.

Discouraged workers are included in the

The program of unemployment insurance in the United States was created during the

Which of the following groups would most likely to benefit from inflation?

Technological change or the effects of automation cause

From 1991 to 2007,the rate of inflation in the U.S.has been

Potential GDP is an estimate of the economy's ability to produce goods and services if the

Sharon buys some common stock in 1990 for $10,000 and sells it in 2000 for $15,000.During the same period,prices have risen by 75 percent.The net result of Sharon's stock purchases is that she will

If actual inflation is less than the expected rate of inflation,then probably

If the price of pizzas has risen from $4 to $5 at the same time that the price of an hour of spinning class has risen from $20 to $30,then

Unemployment insurance cannot eliminate the national costs of lost output due to unemployed labor.

Persons who have given up looking for work are classified as

Compared to the unemployed during the Great Depression,persons unemployed in today's economy are

An increase in the capital stock would be expected to

Why do environmentalists worry about faster economic growth? Economists concede that faster growth is not always better.Why?

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

Americans would probably be supportive of

The growth of the labor force and the growth of labor productivity help determine the rate of GDP growth.

To protect themselves from the effects of inflation,lenders try to estimate the expected rate of inflation.

When a lender underestimates the rate of inflation,

Adding together the growth rate of labor input and the growth rate of labor productivity yields the growth rate of

The nominal rate of interest is the difference between the real rate and the expected rate of inflation.

Discouraged workers are included in the

The program of unemployment insurance in the United States was created during the

Which of the following groups would most likely to benefit from inflation?

Technological change or the effects of automation cause

From 1991 to 2007,the rate of inflation in the U.S.has been

Potential GDP is an estimate of the economy's ability to produce goods and services if the

Sharon buys some common stock in 1990 for $10,000 and sells it in 2000 for $15,000.During the same period,prices have risen by 75 percent.The net result of Sharon's stock purchases is that she will

If actual inflation is less than the expected rate of inflation,then probably

If the price of pizzas has risen from $4 to $5 at the same time that the price of an hour of spinning class has risen from $20 to $30,then

Unemployment insurance cannot eliminate the national costs of lost output due to unemployed labor.

Persons who have given up looking for work are classified as

Compared to the unemployed during the Great Depression,persons unemployed in today's economy are

An increase in the capital stock would be expected to

Why do environmentalists worry about faster economic growth? Economists concede that faster growth is not always better.Why?

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