Question 1

Which of the following about unemployment is true?

Accepted Answer

A) The unemployment rates of the major European economies have been lower than the United States during the last decade. 
B) The natural rate of unemployment is unaffected by labor market regulations and other dimensions of public policy. 
C) High unemployment rates over lengthy time periods are indicative of structural factors that are adversely affecting the natural rate of unemployment. 
D) The unemployment rates of Spain and Italy were among the lowest in the world during the past two decades. 
A) The unemployment rates of the major European economies have been lower than the United States during the last decade. 
B) The natural rate of unemployment is unaffected by labor market regulations and other dimensions of public policy. 
C) High unemployment rates over lengthy time periods are indicative of structural factors that are adversely affecting the natural rate of unemployment. 
D) The unemployment rates of Spain and Italy were among the lowest in the world during the past two decades.

Question 2

Discuss the dangers of inflation; that is, why may it hurt an economy?

Accepted Answer

The three biggest dangers of inflation a

Question 3

Which of the following will most likely cause a decrease the natural rate of unemployment?

Accepted Answer

A) an increase in the minimum wage 
B) an increase in unemployment benefits 
C) an increase in experienced workers aged 25 and over as proportion of the labor force 
D) an increase in the labor force participation rate of teenagers 
A) an increase in the minimum wage 
B) an increase in unemployment benefits 
C) an increase in experienced workers aged 25 and over as proportion of the labor force 
D) an increase in the labor force participation rate of teenagers

Question 4

The economy's potential output is

Accepted Answer

A) the maximum output that could be achieved temporarily during a time of economic boom. 
B) the minimum output that could be achieved during a recession. 
C) present when 100 percent of the labor force is employed. 
D) the maximum sustainable output of the economy given its resources. 
A) the maximum output that could be achieved temporarily during a time of economic boom. 
B) the minimum output that could be achieved during a recession. 
C) present when 100 percent of the labor force is employed. 
D) the maximum sustainable output of the economy given its resources.

Question 5

Which of the following will most likely increase the natural rate of unemployment?

Accepted Answer

A) a decrease in the minimum wage 
B) an increase in unemployment benefits 
C) an increase in the number of people who stop looking for a job 
D) an increase in the proportion of prime-age workers as a share of the labor force 
A) a decrease in the minimum wage 
B) an increase in unemployment benefits 
C) an increase in the number of people who stop looking for a job 
D) an increase in the proportion of prime-age workers as a share of the labor force

Question 6

Which of the following is true?

Accepted Answer

A) Anticipated inflation is an increase in the price level that comes as a surprise, at least to most individuals. 
B) Unanticipated inflation is a change in the price level that is widely expected. 
C) Decision makers are generally able to anticipate slow steady rates of inflation with a fairly high degree of accuracy. 
D) Inflation will increase the prices of goods and services that households purchase but not the wage rates of workers. 
A) Anticipated inflation is an increase in the price level that comes as a surprise, at least to most individuals. 
B) Unanticipated inflation is a change in the price level that is widely expected. 
C) Decision makers are generally able to anticipate slow steady rates of inflation with a fairly high degree of accuracy. 
D) Inflation will increase the prices of goods and services that households purchase but not the wage rates of workers.

Question 7

The natural rate of unemployment

Accepted Answer

A) is due to cyclical business conditions. 
B) results from normal dynamic changes given the institutional arrangements of the economy. 
C) results from both frictional and cyclical economic conditions. 
D) is present when the economy is at the peak of an economic boom. 
A) is due to cyclical business conditions. 
B) results from normal dynamic changes given the institutional arrangements of the economy. 
C) results from both frictional and cyclical economic conditions. 
D) is present when the economy is at the peak of an economic boom.

Question 8

Which of the following is true?

Accepted Answer

A) Anticipated inflation is an increase in the price level that comes as a surprise, at least to most individuals. 
B) Unanticipated inflation is a change in the price level that is widely expected. 
C) When the inflation rate is high and variable, decision makers will generally be able to anticipate year-to-year changes in inflation quite accurately. 
D) Inflation will tend to increase the nominal values of both prices and wages. 
A) Anticipated inflation is an increase in the price level that comes as a surprise, at least to most individuals. 
B) Unanticipated inflation is a change in the price level that is widely expected. 
C) When the inflation rate is high and variable, decision makers will generally be able to anticipate year-to-year changes in inflation quite accurately. 
D) Inflation will tend to increase the nominal values of both prices and wages.

Question 9

Which of the following is a true statement?

Accepted Answer

A) Unanticipated inflation is a change in the general level of prices that catches most decision makers by surprise. 
B) High and variable rates of inflation are easy for decision makers to forecast accurately. 
C) High and variable rates of inflation can increase GDP by reducing investment. 
D) When decision-makers are able to anticipate slow, steady rates of inflation, prices become more unstable and there is a negative impact on the level of prosperity. 
A) Unanticipated inflation is a change in the general level of prices that catches most decision makers by surprise. 
B) High and variable rates of inflation are easy for decision makers to forecast accurately. 
C) High and variable rates of inflation can increase GDP by reducing investment. 
D) When decision-makers are able to anticipate slow, steady rates of inflation, prices become more unstable and there is a negative impact on the level of prosperity.

Question 10

Andrea would be considered unemployed if she is

Accepted Answer

A) working at a part-time job but is looking for a full-time job. 
B) absent from her regular job as the result of illness. 
C) working at a full-time job but is looking for a part-time job. 
D) not working and is looking for a part-time job. 
A) working at a part-time job but is looking for a full-time job. 
B) absent from her regular job as the result of illness. 
C) working at a full-time job but is looking for a part-time job. 
D) not working and is looking for a part-time job.

Question 11

Higher unemployment insurance benefits tend to increase unemployment because they

Accepted Answer

A) reduce the opportunity cost of job search and, hence, increase the search time. 
B) increase the opportunity cost of job search and, hence, increase the search time. 
C) reduce the opportunity cost of job search and, hence, decrease the search time. 
D) increase the opportunity cost of job search and, hence, decrease the search time. 
A) reduce the opportunity cost of job search and, hence, increase the search time. 
B) increase the opportunity cost of job search and, hence, increase the search time. 
C) reduce the opportunity cost of job search and, hence, decrease the search time. 
D) increase the opportunity cost of job search and, hence, decrease the search time.

Question 12

If Trevon voluntarily quits one job, possesses marketable skills, and expects to find a new job in a few weeks, then Trevon is considered

Accepted Answer

A) frictionally unemployed. 
B) cyclically unemployed. 
C) seasonally unemployed. 
D) structurally unemployed. 
E) unwise to quit his job without already having another one. 
A) frictionally unemployed. 
B) cyclically unemployed. 
C) seasonally unemployed. 
D) structurally unemployed. 
E) unwise to quit his job without already having another one.

Question 13

The distinguishing characteristics of business cycles are

Accepted Answer

A) periods of inflation followed by periods of deflation. 
B) high rates of economic growth coupled with high rates of unemployment. 
C) a constant rate of economic growth coupled with ups and downs in the general level of prices. 
D) periods of growth in real output followed by periods of decline. 
A) periods of inflation followed by periods of deflation. 
B) high rates of economic growth coupled with high rates of unemployment. 
C) a constant rate of economic growth coupled with ups and downs in the general level of prices. 
D) periods of growth in real output followed by periods of decline.

Question 14

The period of growth in real GDP between the trough of the business cycle and the next peak is called the

Accepted Answer

A) recessionary phase. 
B) expansionary phase. 
C) contractionary phase. 
D) cyclical phase. 
A) recessionary phase. 
B) expansionary phase. 
C) contractionary phase. 
D) cyclical phase.

Question 15

The economy is considered to be at full employment when

Accepted Answer

A) the actual rate of unemployment is less than the natural rate. 
B) the leading economic indicators are unchanged for two consecutive quarters. 
C) structural unemployment is zero. 
D) frictional plus structural unemployment is less than the natural rate. 
E) the rate of cyclical unemployment is zero. 
A) the actual rate of unemployment is less than the natural rate. 
B) the leading economic indicators are unchanged for two consecutive quarters. 
C) structural unemployment is zero. 
D) frictional plus structural unemployment is less than the natural rate. 
E) the rate of cyclical unemployment is zero.

Question 16

Economists use the phrase "business cycle" when referring to fluctuations in

Accepted Answer

A) the rate of real output and employment. 
B) interest rates. 
C) the consumer price index. 
D) the general level of prices. 
A) the rate of real output and employment. 
B) interest rates. 
C) the consumer price index. 
D) the general level of prices.

Question 17

Answer the following questions:
a.What are the three types of unemployment, and which two compose the natural rate?
b.Give an example of a person who would be counted in each type.
c.Would an economy with 2 percent actual unemployment be in a recession? Why or why not?

Accepted Answer

a.
Cyclical, structural, and frictional

Question 18

Cyclical unemployment

Accepted Answer

A) is caused by changes in the business cycle. 
B) results from imperfect search activities in matching qualified employees with employers. 
C) results from institutional factors that make it difficult for some workers to find jobs. 
D) will probably go up as a result of improvements in online job searching. 
A) is caused by changes in the business cycle. 
B) results from imperfect search activities in matching qualified employees with employers. 
C) results from institutional factors that make it difficult for some workers to find jobs. 
D) will probably go up as a result of improvements in online job searching.

Question 19

The current U.S. unemployment insurance program tends to

Accepted Answer

A) increase the incentive to switch occupations. 
B) reduce the time workers stay unemployed. 
C) make it more costly for unemployed workers to turn down available jobs. 
D) raise the unemployment rate. 
A) increase the incentive to switch occupations. 
B) reduce the time workers stay unemployed. 
C) make it more costly for unemployed workers to turn down available jobs. 
D) raise the unemployment rate.

Question 20

Full employment means which of the following is zero?

Accepted Answer

A) structural unemployment 
B) cyclical unemployment 
C) frictional unemployment 
D) aggregate unemployment 
A) structural unemployment 
B) cyclical unemployment 
C) frictional unemployment 
D) aggregate unemployment

Which of the following about unemployment is true?

Discuss the dangers of inflation; that is, why may it hurt an economy?

Which of the following will most likely cause a decrease the natural rate of unemployment?

The economy's potential output is

Which of the following will most likely increase the natural rate of unemployment?

Which of the following is true?

The natural rate of unemployment

Which of the following is true?

Which of the following is a true statement?

Andrea would be considered unemployed if she is

Higher unemployment insurance benefits tend to increase unemployment because they

If Trevon voluntarily quits one job, possesses marketable skills, and expects to find a new job in a few weeks, then Trevon is considered

The distinguishing characteristics of business cycles are

The period of growth in real GDP between the trough of the business cycle and the next peak is called the

The economy is considered to be at full employment when

Economists use the phrase "business cycle" when referring to fluctuations in

Answer the following questions: a.What are the three types of unemployment, and which two compose the natural rate? b.Give an example of a person who would be counted in each type. c.Would an economy with 2 percent actual unemployment be in a recession? Why or why not?

Cyclical unemployment

The current U.S. unemployment insurance program tends to

Full employment means which of the following is zero?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Taking the Nations Economic Pulse

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy, Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Filters

Exam 8: Economic Fluctuations, Unemployment, and Inflation

Which of the following about unemployment is true?

Discuss the dangers of inflation; that is, why may it hurt an economy?

Which of the following will most likely cause a decrease the natural rate of unemployment?

The economy's potential output is

Which of the following will most likely increase the natural rate of unemployment?

Which of the following is true?

The natural rate of unemployment

Which of the following is true?

Which of the following is a true statement?

Andrea would be considered unemployed if she is

Higher unemployment insurance benefits tend to increase unemployment because they

If Trevon voluntarily quits one job, possesses marketable skills, and expects to find a new job in a few weeks, then Trevon is considered

The distinguishing characteristics of business cycles are

The period of growth in real GDP between the trough of the business cycle and the next peak is called the

The economy is considered to be at full employment when

Economists use the phrase "business cycle" when referring to fluctuations in

Answer the following questions: a.What are the three types of unemployment, and which two compose the natural rate? b.Give an example of a person who would be counted in each type. c.Would an economy with 2 percent actual unemployment be in a recession? Why or why not?

Cyclical unemployment

The current U.S. unemployment insurance program tends to

Full employment means which of the following is zero?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Taking the Nations Economic Pulse

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy, Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Filters