Question 1

Labor productivity measures output per hour of work.

Accepted Answer

A) True 
 B)False

Question 2

Unemployment rates differ widely among various groups in the population.

Accepted Answer

A) True 
 B)False

Question 3

Over the past few decades,nominal interest rates have been higher than real rates of interest.This means that

Accepted Answer

A)  lenders must have expected inflation. 
B)  borrowers must have expected deflation. 
C)  lenders must have expected prices to fall. 
D)  borrowers must have expected prices to fall. 
A)  lenders must have expected inflation. 
B)  borrowers must have expected deflation. 
C)  lenders must have expected prices to fall. 
D)  borrowers must have expected prices to fall.

Question 4

If expected inflation is 12 percent and the publicly regulated electric utility company is legally limited to a 10 percent rate of return,then we should expect

Accepted Answer

A)  increased investment by the utility. 
B)  expansion of electric power generating capacity. 
C)  future power shortages. 
D)  excess investment by the electric utility. 
A)  increased investment by the utility. 
B)  expansion of electric power generating capacity. 
C)  future power shortages. 
D)  excess investment by the electric utility.

Question 5

The term frictional unemployment refers to persons who are out of work

Accepted Answer

A)  due to technological change. 
B)  due to strikes or lockouts. 
C)  and have given up looking for work. 
D)  because they are between jobs. 
A)  due to technological change. 
B)  due to strikes or lockouts. 
C)  and have given up looking for work. 
D)  because they are between jobs.

Question 6

To measure how productive workers in the economy are,the best measure to use would be

Accepted Answer

A)  real GDP. 
B)  GDP divided by the population. 
C)  GDP divided by the nation's capital stock. 
D)  GDP divided by hours worked. 
A)  real GDP. 
B)  GDP divided by the population. 
C)  GDP divided by the nation's capital stock. 
D)  GDP divided by hours worked.

Question 7

Growth in potential GDP depends on

Accepted Answer

A)  the labor force growth rate,capital stock growth rate,and rate of technical progress. 
B)  government spending,growth in prices,and labor productivity. 
C)  cyclical fluctuations and growth in the capital stock. 
D)  growth in real GDP,nominal GDP,and the population. 
A)  the labor force growth rate,capital stock growth rate,and rate of technical progress. 
B)  government spending,growth in prices,and labor productivity. 
C)  cyclical fluctuations and growth in the capital stock. 
D)  growth in real GDP,nominal GDP,and the population.

Question 8

Which of the following would impose the greatest costs to society?

Accepted Answer

A)  high levels of expected inflation 
B)  low levels of expected inflation 
C)  variable rates of inflation 
D)  stable rates of inflation 
A)  high levels of expected inflation 
B)  low levels of expected inflation 
C)  variable rates of inflation 
D)  stable rates of inflation

Question 9

The amount of goods and services the economy could produce if the labor force is fully employed is called

Accepted Answer

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

Question 10

The reason that inflation rarely harms workers is that

Accepted Answer

A)  wages rise at the same time prices rise. 
B)  wages fall when prices rise. 
C)  nominal income falls as prices rise. 
D)  the minimum wage rate automatically rises when the price level rises. 
A)  wages rise at the same time prices rise. 
B)  wages fall when prices rise. 
C)  nominal income falls as prices rise. 
D)  the minimum wage rate automatically rises when the price level rises.

Question 11

If part of the labor force is unemployed,the foregone goods and services are

Accepted Answer

A)  lost until the unemployed find jobs. 
B)  are replaced by unemployment insurance. 
C)  are lost forever. 
D)  are replaced by an equal amount of imports. 
A)  lost until the unemployed find jobs. 
B)  are replaced by unemployment insurance. 
C)  are lost forever. 
D)  are replaced by an equal amount of imports.

Question 12

An economy can increase its total output of goods and services if it

Accepted Answer

A)  increases the hours of work or output per hour. 
B)  increases the hours of work or decreases output per hour. 
C)  decreases hours of work or decreases output per hour. 
D)  decreases hours of work and decreases output per hour. 
A)  increases the hours of work or output per hour. 
B)  increases the hours of work or decreases output per hour. 
C)  decreases hours of work or decreases output per hour. 
D)  decreases hours of work and decreases output per hour.

Question 13

A nation's standard of living depends on its population and labor productivity.

Accepted Answer

A) True 
 B)False

Question 14

During inflationary periods

Accepted Answer

A)  the real value of money rises. 
B)  the real value of money remains constant. 
C)  the real value of money falls. 
D)  the purchasing power of money rises. 
A)  the real value of money rises. 
B)  the real value of money remains constant. 
C)  the real value of money falls. 
D)  the purchasing power of money rises.

Question 15

Economists oppose limiting economic growth possibilities because such limits would inevitably involve

Accepted Answer

A)  some expansion of private sector production. 
B)  an increase in government spending. 
C)  some form of mandatory controls on economic activity. 
D)  mandated balanced federal budgets. 
A)  some expansion of private sector production. 
B)  an increase in government spending. 
C)  some form of mandatory controls on economic activity. 
D)  mandated balanced federal budgets.

Question 16

The most likely group of the following that would be eligible for unemployment insurance benefits is

Accepted Answer

A)  new college graduates looking for their first job. 
B)  mothers returning to the labor force after caring for young children. 
C)  workers who quit their jobs. 
D)  experienced workers recently laid off. 
A)  new college graduates looking for their first job. 
B)  mothers returning to the labor force after caring for young children. 
C)  workers who quit their jobs. 
D)  experienced workers recently laid off.

Question 17

The costs of unemployment to an individual out of work are larger now than in the 1930s.

Accepted Answer

A) True 
 B)False

Question 18

When prices rise

Accepted Answer

A)  the rich benefit at the expense of the poor. 
B)  the poor benefit at the expense of the rich. 
C)  both the rich and poor lose real income. 
D)  the effect in the rich and poor is uncertain. 
A)  the rich benefit at the expense of the poor. 
B)  the poor benefit at the expense of the rich. 
C)  both the rich and poor lose real income. 
D)  the effect in the rich and poor is uncertain.

Question 19

The term "unemployed" includes all people who want a job,but don't have one.

Accepted Answer

A) True 
 B)False

Question 20

Changes in relative prices usually lead to increases in real income because prices have changed.

Accepted Answer

A) True 
 B)False

Labor productivity measures output per hour of work.

Unemployment rates differ widely among various groups in the population.

Over the past few decades,nominal interest rates have been higher than real rates of interest.This means that

If expected inflation is 12 percent and the publicly regulated electric utility company is legally limited to a 10 percent rate of return,then we should expect

The term frictional unemployment refers to persons who are out of work

To measure how productive workers in the economy are,the best measure to use would be

Growth in potential GDP depends on

Which of the following would impose the greatest costs to society?

The amount of goods and services the economy could produce if the labor force is fully employed is called

The reason that inflation rarely harms workers is that

If part of the labor force is unemployed,the foregone goods and services are

An economy can increase its total output of goods and services if it

A nation's standard of living depends on its population and labor productivity.

During inflationary periods

Economists oppose limiting economic growth possibilities because such limits would inevitably involve

The most likely group of the following that would be eligible for unemployment insurance benefits is

The costs of unemployment to an individual out of work are larger now than in the 1930s.

When prices rise

The term "unemployed" includes all people who want a job,but don't have one.

Changes in relative prices usually lead to increases in real income because prices have changed.

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

Labor productivity measures output per hour of work.

Unemployment rates differ widely among various groups in the population.

Over the past few decades,nominal interest rates have been higher than real rates of interest.This means that

If expected inflation is 12 percent and the publicly regulated electric utility company is legally limited to a 10 percent rate of return,then we should expect

The term frictional unemployment refers to persons who are out of work

To measure how productive workers in the economy are,the best measure to use would be

Growth in potential GDP depends on

Which of the following would impose the greatest costs to society?

The amount of goods and services the economy could produce if the labor force is fully employed is called

The reason that inflation rarely harms workers is that

If part of the labor force is unemployed,the foregone goods and services are

An economy can increase its total output of goods and services if it

A nation's standard of living depends on its population and labor productivity.

During inflationary periods

Economists oppose limiting economic growth possibilities because such limits would inevitably involve

The most likely group of the following that would be eligible for unemployment insurance benefits is

The costs of unemployment to an individual out of work are larger now than in the 1930s.

When prices rise

The term "unemployed" includes all people who want a job,but don't have one.

Changes in relative prices usually lead to increases in real income because prices have changed.

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