Question 1

A drop in the inflation rate is called:

Accepted Answer

A)  disinflation. 
B)  deflation. 
C)  stagflation. 
D)  hyperinflation. 
A)  disinflation. 
B)  deflation. 
C)  stagflation. 
D)  hyperinflation.

Question 2

Economists generally agree that sufficiently high minimum wage laws:

Accepted Answer

A)  cause unemployment. 
B)  help lower the structural unemployment rate. 
C)  decrease the labor force participation rate. 
D)  make an opportunity for discouraged workers. 
A)  cause unemployment. 
B)  help lower the structural unemployment rate. 
C)  decrease the labor force participation rate. 
D)  make an opportunity for discouraged workers.

Question 3

According to the Bureau of Labor Statistics, the actual unemployment rate was 8.3% in February 2012 and the natural rate of unemployment was 5.2%. The _____ unemployment rate was _____%.

Accepted Answer

A)  frictional; 4 
B)  cyclical; 3.1 
C)  structural; 4 
D)  cyclical; 14 
A)  frictional; 4 
B)  cyclical; 3.1 
C)  structural; 4 
D)  cyclical; 14

Question 4

When the economy is at full employment, _____ is zero.

Accepted Answer

A)  unemployment 
B)  cyclical unemployment 
C)  frictional unemployment 
D)  the natural rate of unemployment 
A)  unemployment 
B)  cyclical unemployment 
C)  frictional unemployment 
D)  the natural rate of unemployment

Question 5

Increases in unemployment compensation:

Accepted Answer

A)  reduce unemployment. 
B)  increase unemployment. 
C)  increase the number of jobs available. 
D)  decrease the number of jobs available. 
A)  reduce unemployment. 
B)  increase unemployment. 
C)  increase the number of jobs available. 
D)  decrease the number of jobs available.

Question 6

One factor that raises the natural rate of unemployment is:

Accepted Answer

A)  a population boom that increases the number of young workers joining the labor force. 
B)  the loss of labor union membership across industries. 
C)  the loss of retirement funds so that more people in the baby-boom generation continue to work past the typical retirement age. 
D)  the use of new technology in the workplace that increases labor productivity. 
A)  a population boom that increases the number of young workers joining the labor force. 
B)  the loss of labor union membership across industries. 
C)  the loss of retirement funds so that more people in the baby-boom generation continue to work past the typical retirement age. 
D)  the use of new technology in the workplace that increases labor productivity.

Question 7

The unemployment rate in Western Europe has been higher than the unemployment rate in the United States in recent years.

Accepted Answer

A) True 
 B)False

Question 8

In general, for the U.S. economy, the relation between unemployment and economic growth is:

Accepted Answer

A)  positive. 
B)  direct. 
C)  neutral. 
D)  negative. 
A)  positive. 
B)  direct. 
C)  neutral. 
D)  negative.

Question 9

During Brazil's hyperinflation of the 1990s, the economy lost real resources when the transportation sector grew very large to cope with the consequences of the high rate of inflation.

Accepted Answer

A) True 
 B)False

Question 10

If the actual inflation rate is less than the expected inflation rate:

Accepted Answer

A)  lenders gain and borrowers lose. 
B)  borrowers gain and lenders lose. 
C)  everyone benefits. 
D)  everyone is worse off. 
A)  lenders gain and borrowers lose. 
B)  borrowers gain and lenders lose. 
C)  everyone benefits. 
D)  everyone is worse off.

Question 11

If the labor force includes 100 million workers and 5 million people are unemployed but actively seeking work, then the unemployment rate is _____%.

Accepted Answer

A)  1 
B)  5 
C)  10 
D)  95 
A)  1 
B)  5 
C)  10 
D)  95

Question 12

A bank makes a loan for one year. The nominal annual interest rate is 7.5%. The real rate is 4%. Over the course of the year, overall prices increase by 4%. This rate of inflation hurt the _____ because the actual rate of inflation was _____ than the anticipated rate.

Accepted Answer

A)  borrower; lower 
B)  borrower; higher 
C)  lender; higher 
D)  lender; lower 
A)  borrower; lower 
B)  borrower; higher 
C)  lender; higher 
D)  lender; lower

Question 13

Menu costs are the:

Accepted Answer

A)  costs of money becoming less reliable. 
B)  real costs of changing listed prices. 
C)  increase in the transaction costs caused by inflation. 
D)  adjustments to the cost of living. 
A)  costs of money becoming less reliable. 
B)  real costs of changing listed prices. 
C)  increase in the transaction costs caused by inflation. 
D)  adjustments to the cost of living.

Question 14

The natural rate of unemployment is:

Accepted Answer

A)  composed of frictional, structural, and cyclical unemployment. 
B)  equal to zero. 
C)  always greater than the actual unemployment rate. 
D)  composed of structural and frictional unemployment. 
A)  composed of frictional, structural, and cyclical unemployment. 
B)  equal to zero. 
C)  always greater than the actual unemployment rate. 
D)  composed of structural and frictional unemployment.

Question 15

Unit-of-account costs of inflation are the:

Accepted Answer

A)  costs associated with money not being a reliable unit of measurement. 
B)  costs of transactions associated with avoiding the inflation tax. 
C)  costs associated with businesses changing prices. 
D)  transfers the government gets from printing money. 
A)  costs associated with money not being a reliable unit of measurement. 
B)  costs of transactions associated with avoiding the inflation tax. 
C)  costs associated with businesses changing prices. 
D)  transfers the government gets from printing money.

Question 16

If actual unemployment is 6.2% and the natural rate is 4%, cyclical unemployment is:

Accepted Answer

A)  6.2%. 
B)  10.2%. 
C)  4%. 
D)  2.2%. 
A)  6.2%. 
B)  10.2%. 
C)  4%. 
D)  2.2%.

Question 17

Shoe-leather costs are the:

Accepted Answer

A)  effect of inflation on the prices of food, clothes, and other necessities. 
B)  increased cost of transactions due to inflation. 
C)  high price of leather goods. 
D)  effect of inflation on transportation costs. 
A)  effect of inflation on the prices of food, clothes, and other necessities. 
B)  increased cost of transactions due to inflation. 
C)  high price of leather goods. 
D)  effect of inflation on transportation costs.

Question 18

Recent declines in union membership are likely _____ the natural rate of unemployment.

Accepted Answer

A)  to increase 
B)  to decrease 
C)  not to affect 
D)  to alter unpredictably 
A)  to increase 
B)  to decrease 
C)  not to affect 
D)  to alter unpredictably

Question 19

Unemployment rates are usually HIGHEST for:

Accepted Answer

A)  white teenagers. 
B)  African American teenagers. 
C)  male workers aged 25 to 54. 
D)  female workers aged 25 to 54. 
A)  white teenagers. 
B)  African American teenagers. 
C)  male workers aged 25 to 54. 
D)  female workers aged 25 to 54.

Question 20

Which expression MOST accurately describes how to calculate the unemployment rate?

Accepted Answer

A)  (Unemployed / Population) * 100 
B)  (Unemployed / Employed) * 100 
C)  (Unemployed / Labor force) * 100 
D)  [(Unemployed - Employed) / Labor force] * 100 
A)  (Unemployed / Population) * 100 
B)  (Unemployed / Employed) * 100 
C)  (Unemployed / Labor force) * 100 
D)  [(Unemployed - Employed) / Labor force] * 100

A drop in the inflation rate is called:

Economists generally agree that sufficiently high minimum wage laws:

According to the Bureau of Labor Statistics, the actual unemployment rate was 8.3% in February 2012 and the natural rate of unemployment was 5.2%. The _ unemployment rate was _%.

When the economy is at full employment, _____ is zero.

Increases in unemployment compensation:

One factor that raises the natural rate of unemployment is:

The unemployment rate in Western Europe has been higher than the unemployment rate in the United States in recent years.

In general, for the U.S. economy, the relation between unemployment and economic growth is:

During Brazil's hyperinflation of the 1990s, the economy lost real resources when the transportation sector grew very large to cope with the consequences of the high rate of inflation.

If the actual inflation rate is less than the expected inflation rate:

If the labor force includes 100 million workers and 5 million people are unemployed but actively seeking work, then the unemployment rate is _____%.

A bank makes a loan for one year. The nominal annual interest rate is 7.5%. The real rate is 4%. Over the course of the year, overall prices increase by 4%. This rate of inflation hurt the _ because the actual rate of inflation was _ than the anticipated rate.

Menu costs are the:

The natural rate of unemployment is:

Unit-of-account costs of inflation are the:

If actual unemployment is 6.2% and the natural rate is 4%, cyclical unemployment is:

Shoe-leather costs are the:

Recent declines in union membership are likely _____ the natural rate of unemployment.

Unemployment rates are usually HIGHEST for:

Which expression MOST accurately describes how to calculate the unemployment rate?

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

GDP and the CPI: Tracking the Macroeconomy

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

Exam 8: Unemployment and Inflation

A drop in the inflation rate is called:

Economists generally agree that sufficiently high minimum wage laws:

According to the Bureau of Labor Statistics, the actual unemployment rate was 8.3% in February 2012 and the natural rate of unemployment was 5.2%. The _____ unemployment rate was _____%.

When the economy is at full employment, _____ is zero.

Increases in unemployment compensation:

One factor that raises the natural rate of unemployment is:

The unemployment rate in Western Europe has been higher than the unemployment rate in the United States in recent years.

In general, for the U.S. economy, the relation between unemployment and economic growth is:

During Brazil's hyperinflation of the 1990s, the economy lost real resources when the transportation sector grew very large to cope with the consequences of the high rate of inflation.

If the actual inflation rate is less than the expected inflation rate:

If the labor force includes 100 million workers and 5 million people are unemployed but actively seeking work, then the unemployment rate is _____%.

A bank makes a loan for one year. The nominal annual interest rate is 7.5%. The real rate is 4%. Over the course of the year, overall prices increase by 4%. This rate of inflation hurt the _____ because the actual rate of inflation was _____ than the anticipated rate.

Menu costs are the:

The natural rate of unemployment is:

Unit-of-account costs of inflation are the:

If actual unemployment is 6.2% and the natural rate is 4%, cyclical unemployment is:

Shoe-leather costs are the:

Recent declines in union membership are likely _____ the natural rate of unemployment.

Unemployment rates are usually HIGHEST for:

Which expression MOST accurately describes how to calculate the unemployment rate?

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

GDP and the CPI: Tracking the Macroeconomy

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

According to the Bureau of Labor Statistics, the actual unemployment rate was 8.3% in February 2012 and the natural rate of unemployment was 5.2%. The _ unemployment rate was _%.

A bank makes a loan for one year. The nominal annual interest rate is 7.5%. The real rate is 4%. Over the course of the year, overall prices increase by 4%. This rate of inflation hurt the _ because the actual rate of inflation was _ than the anticipated rate.