Question 1

People who are changing jobs are counted in _____ unemployment.

Accepted Answer

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

Question 2

The minimum wage is higher in the United States than it is in most Western European countries.

Accepted Answer

A) True 
 B)False

Question 3

Use the following to answer questions:  
-(Table: Price Levels) Use Table: Price Levels. What is the rate of inflation from 2012 to 2013?

Accepted Answer

A)  6.4% 
B)  4.5% 
C)  2.9% 
D)  2.0% 
A)  6.4% 
B)  4.5% 
C)  2.9% 
D)  2.0%

Question 4

The Bureau of Labor Statistics calls a person who is out of work, would like to work, but has given up looking for work:

Accepted Answer

A)  unemployed. 
B)  employed. 
C)  a discouraged worker. 
D)  lazy. 
A)  unemployed. 
B)  employed. 
C)  a discouraged worker. 
D)  lazy.

Question 5

An increase in the price level that is extremely rapid (say 400% per year) is called:

Accepted Answer

A)  hyperinflation. 
B)  inflation. 
C)  deflation. 
D)  hyperdeflation. 
A)  hyperinflation. 
B)  inflation. 
C)  deflation. 
D)  hyperdeflation.

Question 6

Which situation is likely to increase the natural rate of unemployment?

Accepted Answer

A)  the entrance of many new people into the labor force 
B)  a decrease in unemployment compensation benefits 
C)  a decrease in job search time due to information advances like the Internet 
D)  the elimination of the minimum wage 
A)  the entrance of many new people into the labor force 
B)  a decrease in unemployment compensation benefits 
C)  a decrease in job search time due to information advances like the Internet 
D)  the elimination of the minimum wage

Question 7

One factor that reduces the natural rate of unemployment is:

Accepted Answer

A)  a binding minimum wage. 
B)  the recent proliferation of temporary employment agencies. 
C)  a slowdown in productivity growth. 
D)  government policies such as those that produced Eurosclerosis. 
A)  a binding minimum wage. 
B)  the recent proliferation of temporary employment agencies. 
C)  a slowdown in productivity growth. 
D)  government policies such as those that produced Eurosclerosis.

Question 8

Which example illustrates cyclical unemployment?

Accepted Answer

A)  An autoworker is laid off because a recession has caused a decline in sales. 
B)  A geologist is permanently laid off from an oil company because of a technological advance. 
C)  A worker at a fast-food restaurant quits work and attends college. 
D)  A real estate agent leaves a job in Texas and searches for a similar, higher-paying job in California. 
A)  An autoworker is laid off because a recession has caused a decline in sales. 
B)  A geologist is permanently laid off from an oil company because of a technological advance. 
C)  A worker at a fast-food restaurant quits work and attends college. 
D)  A real estate agent leaves a job in Texas and searches for a similar, higher-paying job in California.

Question 9

If the U.S. dollar were replaced with a "new dollar" at an exchange rate of 1 new dollar for 8 old dollars, then a mortgage of $100,000 would become a debt of _____ new dollars.

Accepted Answer

A)  12,500 
B)  99,992 
C)  100,000 
D)  800,000 
A)  12,500 
B)  99,992 
C)  100,000 
D)  800,000

Question 10

Use the following to answer questions:  
-(Figure: The Labor Market) Use Figure: The Labor Market. The level of employment at the equilibrium wage rate is:

Accepted Answer

A)  80,000. 
B)  110,000 
C)  100,000. 
D)  90,000. 
A)  80,000. 
B)  110,000 
C)  100,000. 
D)  90,000.

Question 11

If the government increases the length and amount of unemployment benefits, the unemployment rate will fall.

Accepted Answer

A) True 
 B)False

Question 12

Shoe-leather costs are the costs of:

Accepted Answer

A)  the raw material used in production. 
B)  the increased number of transactions as inflation increases. 
C)  living adjustments as inflation increases. 
D)  having to change prices as inflation increases. 
A)  the raw material used in production. 
B)  the increased number of transactions as inflation increases. 
C)  living adjustments as inflation increases. 
D)  having to change prices as inflation increases.

Question 13

Over the past year, Eli has been working very hard. His employer has taken notice and is giving Eli a 6% raise in salary. During this past year, overall prices in the economy have increased by 4%. Given this information, Eli's real wage has:

Accepted Answer

A)  stayed constant. 
B)  increased by 6%. 
C)  increased by 2%. 
D)  decreased by 4%. 
A)  stayed constant. 
B)  increased by 6%. 
C)  increased by 2%. 
D)  decreased by 4%.

Question 14

Unit-of-account costs arise from the way inflation makes money a less reliable measure of value.

Accepted Answer

A) True 
 B)False

Question 15

Donna was laid off at the beginning of 2017. She looked for a job for three months but could not find anything suitable. She then decided to volunteer for a soup kitchen and stopped looking for a job. Donna is considered to be:

Accepted Answer

A)  unemployed. 
B)  underemployed. 
C)  a discouraged worker. 
D)  a part-time worker. 
A)  unemployed. 
B)  underemployed. 
C)  a discouraged worker. 
D)  a part-time worker.

Question 16

Use the following to answer questions:  
-(Figure: The Effect of a Minimum Wage) Use Figure: The Effect of a Minimum Wage. Suppose that, after some time with a minimum wage of WF, the government abolishes the minimum wage. Employment will:

Accepted Answer

A)  decrease to QE. 
B)  increase to QE. 
C)  stay at QE. 
D)  be impossible to determine. 
A)  decrease to QE. 
B)  increase to QE. 
C)  stay at QE. 
D)  be impossible to determine.

Question 17

In 2002, the French adopted the euro as their national currency.

Accepted Answer

A) True 
 B)False

Question 18

Generous unemployment benefits are likely to cause a(n):

Accepted Answer

A)  increase in the employment level. 
B)  reduction in job search time. 
C)  decrease in the unemployment rate. 
D)  increase in the unemployment rate. 
A)  increase in the employment level. 
B)  reduction in job search time. 
C)  decrease in the unemployment rate. 
D)  increase in the unemployment rate.

Question 19

Disinflation is a drop in the price level.

Accepted Answer

A) True 
 B)False

Question 20

If a worker becomes unemployed because of an increase in the minimum wage, that worker is:

Accepted Answer

A)  frictionally unemployed. 
B)  structurally unemployed. 
C)  cyclically unemployed. 
D)  engaged in a job search. 
A)  frictionally unemployed. 
B)  structurally unemployed. 
C)  cyclically unemployed. 
D)  engaged in a job search.

People who are changing jobs are counted in _____ unemployment.

The minimum wage is higher in the United States than it is in most Western European countries.

Use the following to answer questions: -(Table: Price Levels) Use Table: Price Levels. What is the rate of inflation from 2012 to 2013?

The Bureau of Labor Statistics calls a person who is out of work, would like to work, but has given up looking for work:

An increase in the price level that is extremely rapid (say 400% per year) is called:

Which situation is likely to increase the natural rate of unemployment?

One factor that reduces the natural rate of unemployment is:

Which example illustrates cyclical unemployment?

If the U.S. dollar were replaced with a "new dollar" at an exchange rate of 1 new dollar for 8 old dollars, then a mortgage of $100,000 would become a debt of _____ new dollars.

Use the following to answer questions: -(Figure: The Labor Market) Use Figure: The Labor Market. The level of employment at the equilibrium wage rate is:

If the government increases the length and amount of unemployment benefits, the unemployment rate will fall.

Shoe-leather costs are the costs of:

Over the past year, Eli has been working very hard. His employer has taken notice and is giving Eli a 6% raise in salary. During this past year, overall prices in the economy have increased by 4%. Given this information, Eli's real wage has:

Unit-of-account costs arise from the way inflation makes money a less reliable measure of value.

Donna was laid off at the beginning of 2017. She looked for a job for three months but could not find anything suitable. She then decided to volunteer for a soup kitchen and stopped looking for a job. Donna is considered to be:

Use the following to answer questions: -(Figure: The Effect of a Minimum Wage) Use Figure: The Effect of a Minimum Wage. Suppose that, after some time with a minimum wage of W_F, the government abolishes the minimum wage. Employment will:

In 2002, the French adopted the euro as their national currency.

Generous unemployment benefits are likely to cause a(n):

Disinflation is a drop in the price level.

If a worker becomes unemployed because of an increase in the minimum wage, that worker is:

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

People who are changing jobs are counted in _____ unemployment.

The minimum wage is higher in the United States than it is in most Western European countries.

Use the following to answer questions: -(Table: Price Levels) Use Table: Price Levels. What is the rate of inflation from 2012 to 2013?

The Bureau of Labor Statistics calls a person who is out of work, would like to work, but has given up looking for work:

An increase in the price level that is extremely rapid (say 400% per year) is called:

Which situation is likely to increase the natural rate of unemployment?

One factor that reduces the natural rate of unemployment is:

Which example illustrates cyclical unemployment?

If the U.S. dollar were replaced with a "new dollar" at an exchange rate of 1 new dollar for 8 old dollars, then a mortgage of $100,000 would become a debt of _____ new dollars.

Use the following to answer questions: -(Figure: The Labor Market) Use Figure: The Labor Market. The level of employment at the equilibrium wage rate is:

If the government increases the length and amount of unemployment benefits, the unemployment rate will fall.

Shoe-leather costs are the costs of:

Over the past year, Eli has been working very hard. His employer has taken notice and is giving Eli a 6% raise in salary. During this past year, overall prices in the economy have increased by 4%. Given this information, Eli's real wage has:

Unit-of-account costs arise from the way inflation makes money a less reliable measure of value.

Donna was laid off at the beginning of 2017. She looked for a job for three months but could not find anything suitable. She then decided to volunteer for a soup kitchen and stopped looking for a job. Donna is considered to be:

Use the following to answer questions: -(Figure: The Effect of a Minimum Wage) Use Figure: The Effect of a Minimum Wage. Suppose that, after some time with a minimum wage of WF, the government abolishes the minimum wage. Employment will:

In 2002, the French adopted the euro as their national currency.

Generous unemployment benefits are likely to cause a(n):

Disinflation is a drop in the price level.

If a worker becomes unemployed because of an increase in the minimum wage, that worker is:

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 Effect of a Minimum Wage) Use Figure: The Effect of a Minimum Wage. Suppose that, after some time with a minimum wage of W_F, the government abolishes the minimum wage. Employment will: