Question 1

The introduction of ATMs reduced the:

Accepted Answer

A)  menu costs of inflation. 
B)  shoe-leather costs of inflation. 
C)  unit-of-account costs of inflation. 
D)  amount of seigniorage. 
A)  menu costs of inflation. 
B)  shoe-leather costs of inflation. 
C)  unit-of-account costs of inflation. 
D)  amount of seigniorage.

Question 2

Long-term unemployment is usually frictional.

Accepted Answer

A) True 
 B)False

Question 3

Use the following to answer questions:  
-(Table: Employment Data) Use Table: Employment Data. The unemployment rate is _____%.

Accepted Answer

A)  6.25 
B)  6.45 
C)  9.09 
D)  9.37 
A)  6.25 
B)  6.45 
C)  9.09 
D)  9.37

Question 4

A survey reveals that, on a small island, 100 people have jobs, 25 people are not working but are looking for jobs, and 45 people are neither working nor looking for work. The unemployment rate on the island is:

Accepted Answer

A)  12.5%. 
B)  20%. 
C)  25%. 
D)  50%. 
A)  12.5%. 
B)  20%. 
C)  25%. 
D)  50%.

Question 5

When policies drop the inflation rate from 10% to 5%, the economy is undergoing disinflation.

Accepted Answer

A) True 
 B)False

Question 6

A recent college graduate with a major in economics attends a job fair but has not yet found a job. This graduate is counted as a _____ unemployed worker.

Accepted Answer

A)  structurally 
B)  seasonally 
C)  cyclically 
D)  frictionally 
A)  structurally 
B)  seasonally 
C)  cyclically 
D)  frictionally

Question 7

The consumer price index in 1979 was 72.6. In 1980, it was 82.4. What was the rate of inflation from 1979 to 1980?

Accepted Answer

A)  13.5% 
B)  11.89% 
C)  17.6% 
D)  9.8% 
A)  13.5% 
B)  11.89% 
C)  17.6% 
D)  9.8%

Question 8

A reason that does NOT explain why frictional unemployment exists is:

Accepted Answer

A)  that new jobs are continually being created. 
B)  that some old jobs are always being destroyed. 
C)  that new workers are always entering the labor market. 
D)  the minimum wage. 
A)  that new jobs are continually being created. 
B)  that some old jobs are always being destroyed. 
C)  that new workers are always entering the labor market. 
D)  the minimum wage.

Question 9

Which pair of policies is likely to reduce the natural rate of unemployment?

Accepted Answer

A)  job training and employment subsidies 
B)  high minimum wages and generous unemployment benefits 
C)  job training and higher minimum wages 
D)  employment subsidies and policies designed to strengthen labor unions 
A)  job training and employment subsidies 
B)  high minimum wages and generous unemployment benefits 
C)  job training and higher minimum wages 
D)  employment subsidies and policies designed to strengthen labor unions

Question 10

Unemployment that is due to the time workers spend in job search is _____ unemployment.

Accepted Answer

A)  frictional 
B)  structural 
C)  cyclical 
D)  natural 
A)  frictional 
B)  structural 
C)  cyclical 
D)  natural

Question 11

Since 1960 in the United States, the rate of inflation has:

Accepted Answer

A)  fluctuated. 
B)  remained the same. 
C)  decreased. 
D)  increased. 
A)  fluctuated. 
B)  remained the same. 
C)  decreased. 
D)  increased.

Question 12

People who are counted as unemployed by the Bureau of Labor Statistics are:

Accepted Answer

A)  people without a job who are actively seeking a job. 
B)  discouraged workers. 
C)  workers who are underemployed. 
D)  people without a job who are actively seeking a job, discouraged workers, and workers who are underemployed. 
A)  people without a job who are actively seeking a job. 
B)  discouraged workers. 
C)  workers who are underemployed. 
D)  people without a job who are actively seeking a job, discouraged workers, and workers who are underemployed.

Question 13

The threat of future inflation:

Accepted Answer

A)  makes people reluctant to lend money for long periods. 
B)  makes people eager to lend money for long periods. 
C)  has no effect on lending money. 
D)  increases the value of money paid back in the future. 
A)  makes people reluctant to lend money for long periods. 
B)  makes people eager to lend money for long periods. 
C)  has no effect on lending money. 
D)  increases the value of money paid back in the future.

Question 14

Use the following to answer questions:  
-(Figure: The Effect of a Minimum Wage) Use Figure: The Effect of a Minimum Wage. Suppose the labor market is in equilibrium at E when the government imposes a minimum wage of WF. Structural unemployment, assuming all workers without a job are searching, will equal:

Accepted Answer

A)  QS - QD. 
B)  QE - QD. 
C)  QS - QE. 
D)  zero. 
A)  QS - QD. 
B)  QE - QD. 
C)  QS - QE. 
D)  zero.

Question 15

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its labor force is:

Accepted Answer

A)  335 million. 
B)  200 million. 
C)  155 million. 
D)  150 million. 
A)  335 million. 
B)  200 million. 
C)  155 million. 
D)  150 million.

Question 16

A person who is NOT working or looking for work is:

Accepted Answer

A)  included in the unemployment rate. 
B)  underemployed. 
C)  a member of the labor force who is not working. 
D)  not counted in the unemployment rate. 
A)  included in the unemployment rate. 
B)  underemployed. 
C)  a member of the labor force who is not working. 
D)  not counted in the unemployment rate.

Question 17

A high unemployment rate implies a high level of GDP.

Accepted Answer

A) True 
 B)False

Question 18

Frictional unemployment is a special type of structural unemployment.

Accepted Answer

A) True 
 B)False

Question 19

Use the following to answer questions:  
-(Figure: The Minimum Wage) Use Figure: The Minimum Wage. The binding minimum wage of P3 leads to surplus of labor of:

Accepted Answer

A)  Q3 - Q1. 
B)  Q3 - Q2. 
C)  Q4 - Q1. 
D)  Q4 - Q2. 
A)  Q3 - Q1. 
B)  Q3 - Q2. 
C)  Q4 - Q1. 
D)  Q4 - Q2.

Question 20

Deviations from the natural rate of unemployment are _____ unemployment.

Accepted Answer

A)  frictional 
B)  structural 
C)  random 
D)  cyclical 
A)  frictional 
B)  structural 
C)  random 
D)  cyclical

The introduction of ATMs reduced the:

Long-term unemployment is usually frictional.

Use the following to answer questions: -(Table: Employment Data) Use Table: Employment Data. The unemployment rate is _____%.

A survey reveals that, on a small island, 100 people have jobs, 25 people are not working but are looking for jobs, and 45 people are neither working nor looking for work. The unemployment rate on the island is:

When policies drop the inflation rate from 10% to 5%, the economy is undergoing disinflation.

A recent college graduate with a major in economics attends a job fair but has not yet found a job. This graduate is counted as a _____ unemployed worker.

The consumer price index in 1979 was 72.6. In 1980, it was 82.4. What was the rate of inflation from 1979 to 1980?

A reason that does NOT explain why frictional unemployment exists is:

Which pair of policies is likely to reduce the natural rate of unemployment?

Unemployment that is due to the time workers spend in job search is _____ unemployment.

Since 1960 in the United States, the rate of inflation has:

People who are counted as unemployed by the Bureau of Labor Statistics are:

The threat of future inflation:

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its labor force is:

A person who is NOT working or looking for work is:

A high unemployment rate implies a high level of GDP.

Frictional unemployment is a special type of structural unemployment.

Use the following to answer questions: -(Figure: The Minimum Wage) Use Figure: The Minimum Wage. The binding minimum wage of P₃ leads to surplus of labor of:

Deviations from the natural rate of unemployment are _____ unemployment.

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

The introduction of ATMs reduced the:

Long-term unemployment is usually frictional.

Use the following to answer questions: -(Table: Employment Data) Use Table: Employment Data. The unemployment rate is _____%.

A survey reveals that, on a small island, 100 people have jobs, 25 people are not working but are looking for jobs, and 45 people are neither working nor looking for work. The unemployment rate on the island is:

When policies drop the inflation rate from 10% to 5%, the economy is undergoing disinflation.

A recent college graduate with a major in economics attends a job fair but has not yet found a job. This graduate is counted as a _____ unemployed worker.

The consumer price index in 1979 was 72.6. In 1980, it was 82.4. What was the rate of inflation from 1979 to 1980?

A reason that does NOT explain why frictional unemployment exists is:

Which pair of policies is likely to reduce the natural rate of unemployment?

Unemployment that is due to the time workers spend in job search is _____ unemployment.

Since 1960 in the United States, the rate of inflation has:

People who are counted as unemployed by the Bureau of Labor Statistics are:

The threat of future inflation:

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its labor force is:

A person who is NOT working or looking for work is:

A high unemployment rate implies a high level of GDP.

Frictional unemployment is a special type of structural unemployment.

Use the following to answer questions: -(Figure: The Minimum Wage) Use Figure: The Minimum Wage. The binding minimum wage of P3 leads to surplus of labor of:

Deviations from the natural rate of unemployment are _____ unemployment.

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

Use the following to answer questions: -(Figure: The Minimum Wage) Use Figure: The Minimum Wage. The binding minimum wage of P₃ leads to surplus of labor of: