Question 1

Which one of the following would be classified as employed?

Accepted Answer

A) a parent who works 50 to 60 hours per week caring for family members 
B) an construction worker vacationing in Florida who is on layoff due to bad weather conditions in his home state 
C) a 21-year-old full-time college student 
D) a 17-year-old high school student who works a newspaper route six hours per week 
A) a parent who works 50 to 60 hours per week caring for family members 
B) an construction worker vacationing in Florida who is on layoff due to bad weather conditions in his home state 
C) a 21-year-old full-time college student 
D) a 17-year-old high school student who works a newspaper route six hours per week

Question 2

Which of the following is true of high and variable rates of inflation?

Accepted Answer

A) When such rates are present, it will be difficult for people to accurately forecast next year's rate of inflation. 
B) Inflation of this type will help promote economic growth and the efficient use of resources. 
C) People will respond to such rates by spending more time producing and less time trying to protect their wealth and income from the uncertainty created by the inflation. 
D) Inflation of this type will improve the information content delivered by market prices. 
A) When such rates are present, it will be difficult for people to accurately forecast next year's rate of inflation. 
B) Inflation of this type will help promote economic growth and the efficient use of resources. 
C) People will respond to such rates by spending more time producing and less time trying to protect their wealth and income from the uncertainty created by the inflation. 
D) Inflation of this type will improve the information content delivered by market prices.

Question 3

When people become unemployed because of a higher minimum wage, this type of unemployment is called

Accepted Answer

A) frictional. 
B) structural. 
C) cyclical. 
D) abnormal. 
A) frictional. 
B) structural. 
C) cyclical. 
D) abnormal.

Question 4

Which scenario will most likely happen as employers and employees increase their usage of the Internet in the job search process?

Accepted Answer

A) Job-related information will become more costly and cyclical unemployment will go up. 
B) Job-related information will become less costly and frictional unemployment will go up. 
C) Job-related information will become more costly and structural unemployment will go down. 
D) Job-related information will become less costly and frictional unemployment will go down. 
A) Job-related information will become more costly and cyclical unemployment will go up. 
B) Job-related information will become less costly and frictional unemployment will go up. 
C) Job-related information will become more costly and structural unemployment will go down. 
D) Job-related information will become less costly and frictional unemployment will go down.

Question 5

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

Accepted Answer

A) an increase in the minimum wage 
B) an increase in unemployment benefits 
C) an increase in the proportion of prime-age workers (35-54) as a share 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 the proportion of prime-age workers (35-54) as a share of the labor force 
D) an increase in the labor force participation rate of teenagers

Question 6

Which of the following about business cycles is true?

Accepted Answer

A) A "depression" is a recession that is mild and relatively brief. 
B) The expansions and contractions of real world business cycles last varying lengths of time. 
C) The timing of business fluctuations is regular and, therefore, easily predictable. 
D) During the recessionary phase of the business cycle, the rate of unemployment is generally quite low. 
A) A "depression" is a recession that is mild and relatively brief. 
B) The expansions and contractions of real world business cycles last varying lengths of time. 
C) The timing of business fluctuations is regular and, therefore, easily predictable. 
D) During the recessionary phase of the business cycle, the rate of unemployment is generally quite low.

Question 7

Full employment

Accepted Answer

A) exists when everyone in the economy has a job 
B) exists when everyone who wants a job has one 
C) exists when the unemployment rate is zero 
D) exists when everyone in the labor force has a job 
E) will always include some unemployment 
A) exists when everyone in the economy has a job 
B) exists when everyone who wants a job has one 
C) exists when the unemployment rate is zero 
D) exists when everyone in the labor force has a job 
E) will always include some unemployment

Question 8

The unemployment rate is defined as the number of

Accepted Answer

A) unemployed individuals divided by the number of employed individuals. 
B) employed individuals divided by the number of individuals in the working-age population. 
C) unemployed individuals divided by the number of individuals in the working-age population. 
D) unemployed individuals divided by the number of individuals employed plus the number of unemployed. 
A) unemployed individuals divided by the number of employed individuals. 
B) employed individuals divided by the number of individuals in the working-age population. 
C) unemployed individuals divided by the number of individuals in the working-age population. 
D) unemployed individuals divided by the number of individuals employed plus the number of unemployed.

Question 9

Ashley was being treated unfairly by her boss, so she stormed off the job and two days later found another position. For two days, Ashley experienced

Accepted Answer

A) cyclical unemployment. 
B) structural unemployment. 
C) seasonal unemployment. 
D) frictional unemployment. 
E) being out of the labor force. 
A) cyclical unemployment. 
B) structural unemployment. 
C) seasonal unemployment. 
D) frictional unemployment. 
E) being out of the labor force.

Question 10

Which of the following is an example of someone with inflationary expectations taking a step designed to insulate themselves from the higher expected rates of inflation?

Accepted Answer

A) a consumer deciding to delay the purchase of a new home or automobile 
B) a consumer who borrows money at a fixed interest rate in order to purchase a new home or automobile 
C) an investor who borrows funds at an adjustable money interest rate (one that automatically increases with higher inflation) 
D) a home buyer who borrows funds at a variable interest rate 
A) a consumer deciding to delay the purchase of a new home or automobile 
B) a consumer who borrows money at a fixed interest rate in order to purchase a new home or automobile 
C) an investor who borrows funds at an adjustable money interest rate (one that automatically increases with higher inflation) 
D) a home buyer who borrows funds at a variable interest rate

Question 11

Virtually all economists and policy makers agree that, within limits, higher employment is better. If this is true, couldn't the government create more employment by hiring people to dig holes and fill them in again? Is this good economic policy?

Accepted Answer

The fallacy in this policy is in believi

Question 12

Full employment is the situation in which the economy operates at an unemployment rate equal to the sum of

Accepted Answer

A) structural and frictional unemployment. 
B) cyclical and frictional unemployment. 
C) structural and cyclical unemployment. 
D) structural, frictional, and cyclical unemployment. 
A) structural and frictional unemployment. 
B) cyclical and frictional unemployment. 
C) structural and cyclical unemployment. 
D) structural, frictional, and cyclical unemployment.

Question 13

Xavier is on layoff from his assembly-line job in Detroit, and he expects to return in about four weeks. During this time, he is vacationing in Florida. The Bureau of Labor Statistics would classify Xavier as

Accepted Answer

A) employed. 
B) unemployed. 
C) not part of the labor force. 
D) a temporary retiree. 
A) employed. 
B) unemployed. 
C) not part of the labor force. 
D) a temporary retiree.

Question 14

Which of the following will most likely occur during the contractionary phase of a business cycle?

Accepted Answer

A) Real GDP rises, and the unemployment rate falls. 
B) Real GDP declines, and the rate of inflation rises. 
C) The sales of most businesses decline, and the unemployment rate rises. 
D) Inflation rises, and employment/population ratio falls. 
A) Real GDP rises, and the unemployment rate falls. 
B) Real GDP declines, and the rate of inflation rises. 
C) The sales of most businesses decline, and the unemployment rate rises. 
D) Inflation rises, and employment/population ratio falls.

Question 15

Suppose there was a country with an adult (age 16 and over) population of 1,000, of which 100 were unemployed and 700 were employed. Which of the following is true?

Accepted Answer

A) The employment population ratio is 87.5 percent. 
B) The labor force participation rate is 70 percent. 
C) The unemployment rate is 12.5 percent. 
D) There are 700 individuals in this country's labor force. 
A) The employment population ratio is 87.5 percent. 
B) The labor force participation rate is 70 percent. 
C) The unemployment rate is 12.5 percent. 
D) There are 700 individuals in this country's labor force.

Question 16

If the official unemployment rate increases in March from its February level because of sluggish sales in the auto industry, we can conclude that ____ unemployment is responsible for the increase.

Accepted Answer

A) seasonal 
B) cyclical 
C) structural 
D) frictional 
E) any one of the causes of 
A) seasonal 
B) cyclical 
C) structural 
D) frictional 
E) any one of the causes of

Question 17

A decrease in aggregate demand and the subsequent cutbacks in production lead to

Accepted Answer

A) frictional unemployment. 
B) cyclical unemployment. 
C) cost-push unemployment. 
D) structural unemployment. 
E) transitory unemployment. 
A) frictional unemployment. 
B) cyclical unemployment. 
C) cost-push unemployment. 
D) structural unemployment. 
E) transitory unemployment.

Question 18

Which of the following best explains why the rate of unemployment is highest among individuals aged 16 through 19?

Accepted Answer

A) Teenagers do not have the skills necessary to find jobs. 
B) Teenagers change jobs more frequently than do older individuals. 
C) Teenagers have a higher labor force participation rate than other age groups. 
D) Most teenagers are in school and, for this reason, are not holding jobs. 
A) Teenagers do not have the skills necessary to find jobs. 
B) Teenagers change jobs more frequently than do older individuals. 
C) Teenagers have a higher labor force participation rate than other age groups. 
D) Most teenagers are in school and, for this reason, are not holding jobs.

Question 19

During an economic boom,

Accepted Answer

A) the actual rate of unemployment will exceed the natural rate of unemployment. 
B) the output of the economy will exceed its long-run potential output. 
C) widespread unemployment will cause inflation to increase. 
D) the actual rate of unemployment will equal the natural rate of unemployment. 
A) the actual rate of unemployment will exceed the natural rate of unemployment. 
B) the output of the economy will exceed its long-run potential output. 
C) widespread unemployment will cause inflation to increase. 
D) the actual rate of unemployment will equal the natural rate of unemployment.

Question 20

The employment/population ratio identifies the proportion of the population age 16 and over that is

Accepted Answer

A) either looking for work or on layoff waiting to be rehired. 
B) employed. 
C) in the labor force. 
D) unemployed. 
A) either looking for work or on layoff waiting to be rehired. 
B) employed. 
C) in the labor force. 
D) unemployed.

Which one of the following would be classified as employed?

Which of the following is true of high and variable rates of inflation?

When people become unemployed because of a higher minimum wage, this type of unemployment is called

Which scenario will most likely happen as employers and employees increase their usage of the Internet in the job search process?

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

Which of the following about business cycles is true?

Full employment

The unemployment rate is defined as the number of

Ashley was being treated unfairly by her boss, so she stormed off the job and two days later found another position. For two days, Ashley experienced

Which of the following is an example of someone with inflationary expectations taking a step designed to insulate themselves from the higher expected rates of inflation?

Virtually all economists and policy makers agree that, within limits, higher employment is better. If this is true, couldn't the government create more employment by hiring people to dig holes and fill them in again? Is this good economic policy?

Full employment is the situation in which the economy operates at an unemployment rate equal to the sum of

Xavier is on layoff from his assembly-line job in Detroit, and he expects to return in about four weeks. During this time, he is vacationing in Florida. The Bureau of Labor Statistics would classify Xavier as

Which of the following will most likely occur during the contractionary phase of a business cycle?

Suppose there was a country with an adult (age 16 and over) population of 1,000, of which 100 were unemployed and 700 were employed. Which of the following is true?

If the official unemployment rate increases in March from its February level because of sluggish sales in the auto industry, we can conclude that ____ unemployment is responsible for the increase.

A decrease in aggregate demand and the subsequent cutbacks in production lead to

Which of the following best explains why the rate of unemployment is highest among individuals aged 16 through 19?

During an economic boom,

The employment/population ratio identifies the proportion of the population age 16 and over that is

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 one of the following would be classified as employed?

Which of the following is true of high and variable rates of inflation?

When people become unemployed because of a higher minimum wage, this type of unemployment is called

Which scenario will most likely happen as employers and employees increase their usage of the Internet in the job search process?

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

Which of the following about business cycles is true?

Full employment

The unemployment rate is defined as the number of

Ashley was being treated unfairly by her boss, so she stormed off the job and two days later found another position. For two days, Ashley experienced

Which of the following is an example of someone with inflationary expectations taking a step designed to insulate themselves from the higher expected rates of inflation?

Virtually all economists and policy makers agree that, within limits, higher employment is better. If this is true, couldn't the government create more employment by hiring people to dig holes and fill them in again? Is this good economic policy?

Full employment is the situation in which the economy operates at an unemployment rate equal to the sum of

Xavier is on layoff from his assembly-line job in Detroit, and he expects to return in about four weeks. During this time, he is vacationing in Florida. The Bureau of Labor Statistics would classify Xavier as

Which of the following will most likely occur during the contractionary phase of a business cycle?

Suppose there was a country with an adult (age 16 and over) population of 1,000, of which 100 were unemployed and 700 were employed. Which of the following is true?

If the official unemployment rate increases in March from its February level because of sluggish sales in the auto industry, we can conclude that ____ unemployment is responsible for the increase.

A decrease in aggregate demand and the subsequent cutbacks in production lead to

Which of the following best explains why the rate of unemployment is highest among individuals aged 16 through 19?

During an economic boom,

The employment/population ratio identifies the proportion of the population age 16 and over that is

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