Question 1

Increases in the average level of prices are called:

Accepted Answer

A)  depreciation. 
B)  deflation. 
C)  inflation. 
D)  expectations. 
A)  depreciation. 
B)  deflation. 
C)  inflation. 
D)  expectations.

Question 2

The increased availability of automatic teller machines has decreased the shoe-leather costs of high inflation.

Accepted Answer

A) True 
 B)False

Question 3

If the labor force totals 100 million workers and 90 million are working, then the unemployment rate is _____%.

Accepted Answer

A)  1 
B)  5 
C)  10 
D)  90 
A)  1 
B)  5 
C)  10 
D)  90

Question 4

A worker classified as frictionally unemployed is one who is:

Accepted Answer

A)  laid off during a recession. 
B)  discouraged and has dropped out of the labor force. 
C)  unemployed while looking for a job that demands his or her skills. 
D)  working part time but would prefer to work full time. 
A)  laid off during a recession. 
B)  discouraged and has dropped out of the labor force. 
C)  unemployed while looking for a job that demands his or her skills. 
D)  working part time but would prefer to work full time.

Question 5

In 2017, 10 million people did not have a job but were actively looking for employment, and 85 million people had either a full-time or a part-time job. The unemployment rate in 2017 was _____%.

Accepted Answer

A)  10 
B)  9.5 
C)  10.5 
D)  8.5 
A)  10 
B)  9.5 
C)  10.5 
D)  8.5

Question 6

When the price level increases, everyone becomes poorer.

Accepted Answer

A) True 
 B)False

Question 7

The unemployment rate is the:

Accepted Answer

A)  percent of the labor force that is unemployed. 
B)  number of people unemployed. 
C)  the labor force minus the number of people unemployed. 
D)  average length of time someone is unemployed. 
A)  percent of the labor force that is unemployed. 
B)  number of people unemployed. 
C)  the labor force minus the number of people unemployed. 
D)  average length of time someone is unemployed.

Question 8

Suppose that roughly 8 million people in the United States were actively seeking jobs but had not found them this month, the same number as last month. Suppose that 2 million of the people who were unemployed last month gave up their search this month and stopped looking for work. What will happen to the official unemployment rate this month, all other things unchanged?

Accepted Answer

A)  It will rise because 2 million people are not in the labor force this month and are not counted as unemployed. 
B)  It will fall because 2 million people are not in the labor force this month and are not counted as unemployed. 
C)  It will be unaffected because the same number of people is unemployed. 
D)  The unemployment rate will decrease by 25%. 
A)  It will rise because 2 million people are not in the labor force this month and are not counted as unemployed. 
B)  It will fall because 2 million people are not in the labor force this month and are not counted as unemployed. 
C)  It will be unaffected because the same number of people is unemployed. 
D)  The unemployment rate will decrease by 25%.

Question 9

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

Accepted Answer

A)  banking 
B)  transportation 
C)  government 
D)  manufacturing 
A)  banking 
B)  transportation 
C)  government 
D)  manufacturing

Question 10

The use of online banking would _____ the _____ cost of a high inflation rate.

Accepted Answer

A)  increase; menu 
B)  decrease; shoe-leather 
C)  increase; unit-of-account 
D)  decrease; unit-of-account 
A)  increase; menu 
B)  decrease; shoe-leather 
C)  increase; unit-of-account 
D)  decrease; unit-of-account

Question 11

Use the following to answer questions:  
-(Table: Population Data for Estill County) Use Table: Population Data for Estill County. How many people are in the labor force?

Accepted Answer

A)  6,000 
B)  9,400 
C)  7,400 
D)  6,500 
A)  6,000 
B)  9,400 
C)  7,400 
D)  6,500

Question 12

Employment is the total:

Accepted Answer

A)  labor force. 
B)  population of working age. 
C)  number of people actively working, either full time or part time. 
D)  number of people not unemployed. 
A)  labor force. 
B)  population of working age. 
C)  number of people actively working, either full time or part time. 
D)  number of people not unemployed.

Question 13

An example of structural unemployment is a(n):

Accepted Answer

A)  autoworker who is temporarily laid off because of a decline in sales. 
B)  geologist who is permanently laid off because of an increase in wages won by labor unions. 
C)  worker at a fast-food restaurant who quits work and attends college. 
D)  real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California. 
A)  autoworker who is temporarily laid off because of a decline in sales. 
B)  geologist who is permanently laid off because of an increase in wages won by labor unions. 
C)  worker at a fast-food restaurant who quits work and attends college. 
D)  real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California.

Question 14

Use the following to answer questions:  
-(Table: Price Levels) Use Table: Price Levels. What is the rate of inflation from 2013 to 2014?

Accepted Answer

A)  1.1% 
B)  2.6% 
C)  2.9% 
D)  2.0% 
A)  1.1% 
B)  2.6% 
C)  2.9% 
D)  2.0%

Question 15

If deflation occurs and your income is fixed, your real income:

Accepted Answer

A)  will fall. 
B)  will go up. 
C)  will still be equal to your nominal income. 
D)  is constant. 
A)  will fall. 
B)  will go up. 
C)  will still be equal to your nominal income. 
D)  is constant.

Question 16

The U.S. inflation rate was lower in the 2000s than it was in the 1970s.

Accepted Answer

A) True 
 B)False

Question 17

Suppose that a country has a progressive income tax code and taxable income is calculated in nominal terms, but the schedule of income tax rates is NOT indexed to inflation. An individual whose income keeps up with inflation over time will pay:

Accepted Answer

A)  a lower rate of the alternative minimum tax. 
B)  a lower percentage of income in taxes over time. 
C)  the same percentage of income in taxes over time. 
D)  a higher percentage of income in taxes over time. 
A)  a lower rate of the alternative minimum tax. 
B)  a lower percentage of income in taxes over time. 
C)  the same percentage of income in taxes over time. 
D)  a higher percentage of income in taxes over time.

Question 18

Unless deflation occurs, the nominal interest rate will always be greater than or equal to the real interest rate.

Accepted Answer

A) True 
 B)False

Question 19

A jobless recovery occurs when GDP is growing at a below-average rate and unemployment is rising.

Accepted Answer

A) True 
 B)False

Question 20

The labor force is considered to be:

Accepted Answer

A)  everyone who is employed. 
B)  everyone who is employed plus everyone who is unemployed. 
C)  the population of the nation. 
D)  those not frictionally unemployed plus all others who are employed. 
A)  everyone who is employed. 
B)  everyone who is employed plus everyone who is unemployed. 
C)  the population of the nation. 
D)  those not frictionally unemployed plus all others who are employed.

Increases in the average level of prices are called:

The increased availability of automatic teller machines has decreased the shoe-leather costs of high inflation.

If the labor force totals 100 million workers and 90 million are working, then the unemployment rate is _____%.

A worker classified as frictionally unemployed is one who is:

In 2017, 10 million people did not have a job but were actively looking for employment, and 85 million people had either a full-time or a part-time job. The unemployment rate in 2017 was _____%.

When the price level increases, everyone becomes poorer.

The unemployment rate is the:

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

The use of online banking would _ the _ cost of a high inflation rate.

Use the following to answer questions: -(Table: Population Data for Estill County) Use Table: Population Data for Estill County. How many people are in the labor force?

Employment is the total:

An example of structural unemployment is a(n):

Use the following to answer questions: -(Table: Price Levels) Use Table: Price Levels. What is the rate of inflation from 2013 to 2014?

If deflation occurs and your income is fixed, your real income:

The U.S. inflation rate was lower in the 2000s than it was in the 1970s.

Suppose that a country has a progressive income tax code and taxable income is calculated in nominal terms, but the schedule of income tax rates is NOT indexed to inflation. An individual whose income keeps up with inflation over time will pay:

Unless deflation occurs, the nominal interest rate will always be greater than or equal to the real interest rate.

A jobless recovery occurs when GDP is growing at a below-average rate and unemployment is rising.

The labor force is considered to be:

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

Increases in the average level of prices are called:

The increased availability of automatic teller machines has decreased the shoe-leather costs of high inflation.

If the labor force totals 100 million workers and 90 million are working, then the unemployment rate is _____%.

A worker classified as frictionally unemployed is one who is:

In 2017, 10 million people did not have a job but were actively looking for employment, and 85 million people had either a full-time or a part-time job. The unemployment rate in 2017 was _____%.

When the price level increases, everyone becomes poorer.

The unemployment rate is the:

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

The use of online banking would _____ the _____ cost of a high inflation rate.

Use the following to answer questions: -(Table: Population Data for Estill County) Use Table: Population Data for Estill County. How many people are in the labor force?

Employment is the total:

An example of structural unemployment is a(n):

Use the following to answer questions: -(Table: Price Levels) Use Table: Price Levels. What is the rate of inflation from 2013 to 2014?

If deflation occurs and your income is fixed, your real income:

The U.S. inflation rate was lower in the 2000s than it was in the 1970s.

Suppose that a country has a progressive income tax code and taxable income is calculated in nominal terms, but the schedule of income tax rates is NOT indexed to inflation. An individual whose income keeps up with inflation over time will pay:

Unless deflation occurs, the nominal interest rate will always be greater than or equal to the real interest rate.

A jobless recovery occurs when GDP is growing at a below-average rate and unemployment is rising.

The labor force is considered to be:

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

The use of online banking would _ the _ cost of a high inflation rate.