Question 1

Both binding minimum wages and union wages may cause structural unemployment.

Accepted Answer

A) True 
 B)False

Question 2

Menu 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)  revenue 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)  revenue the government gets from printing money.

Question 3

The natural rate of unemployment:

Accepted Answer

A)  would increase if a larger percentage of the labor force were over 25 years old. 
B)  would increase if union membership fell. 
C)  would increase if unemployment benefits were increased. 
D)  will always remain fixed. 
A)  would increase if a larger percentage of the labor force were over 25 years old. 
B)  would increase if union membership fell. 
C)  would increase if unemployment benefits were increased. 
D)  will always remain fixed.

Question 4

If the nominal interest rate is 4% and the inflation rate is 1%, then the real interest rate is 5%.

Accepted Answer

A) True 
 B)False

Question 5

If there are 100 million people in the total population, a labor force of 50 million, and 47 million employed workers, the unemployment rate is _____%.

Accepted Answer

A)  3 
B)  6 
C)  8 
D)  10 
A)  3 
B)  6 
C)  8 
D)  10

Question 6

If the growth rate of GDP is above its historical average, then there is a tendency for the unemployment rate to:

Accepted Answer

A)  fall to zero. 
B)  rise. 
C)  fall. 
D)  stabilize. 
A)  fall to zero. 
B)  rise. 
C)  fall. 
D)  stabilize.

Question 7

Cyclical unemployment:

Accepted Answer

A)  occurs when people are between jobs. 
B)  is a lack of good matches between available jobs and skills. 
C)  is the normal unemployment around which the actual unemployment rate fluctuates. 
D)  is the deviation from the natural rate in the actual rate of unemployment. 
A)  occurs when people are between jobs. 
B)  is a lack of good matches between available jobs and skills. 
C)  is the normal unemployment around which the actual unemployment rate fluctuates. 
D)  is the deviation from the natural rate in the actual rate of unemployment.

Question 8

If Jenny's income is $120,000 and the price level is 4, then Jenny's real income is $30,000.

Accepted Answer

A) True 
 B)False

Question 9

The deviations from the natural rate of unemployment in the actual rate of unemployment are:

Accepted Answer

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

Question 10

Between 1921 and 1923, Germany underwent:

Accepted Answer

A)  deflation. 
B)  disinflation. 
C)  an increase in the purchasing power of its currency. 
D)  hyperinflation. 
A)  deflation. 
B)  disinflation. 
C)  an increase in the purchasing power of its currency. 
D)  hyperinflation.

Question 11

In 2002, France replaced its national currency, the franc, with the:

Accepted Answer

A)  euro. 
B)  U.S. dollar. 
C)  British pound. 
D)  Chinese yuan. 
A)  euro. 
B)  U.S. dollar. 
C)  British pound. 
D)  Chinese yuan.

Question 12

In February 2012, the Bureau of Labor Statistics calculated the unemployment rate to be 8.3%. If frictional unemployment was 2% and structural unemployment was 3.2%, then cyclical unemployment was _____%.

Accepted Answer

A)  2.5 
B)  3.1 
C)  12.5 
D)  5.5 
A)  2.5 
B)  3.1 
C)  12.5 
D)  5.5

Question 13

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. The quantity of labor supplied may_____, resulting in structural unemployment.

Accepted Answer

A)  decrease to QD 
B)  stay at QE 
C)  increase to QS 
D)  stay at WE 
A)  decrease to QD 
B)  stay at QE 
C)  increase to QS 
D)  stay at WE

Question 14

If the price level at the end of year 1 is 150 and the price level at the end of year 2 is 160, the inflation rate in year 2 is 10%.

Accepted Answer

A) True 
 B)False

Question 15

When hyperinflation forces Pedro to change the price stickers on the books in his bookstore very frequently to keep up with the aggregate price level, economists say that Pedro has a:

Accepted Answer

A)  shoe-leather cost. 
B)  menu cost. 
C)  unit-of-account cost. 
D)  debt deflation. 
A)  shoe-leather cost. 
B)  menu cost. 
C)  unit-of-account cost. 
D)  debt deflation.

Question 16

Use the following to answer questions:  
-(Table: Employment Data) Use Table: Employment Data. If marginally attached workers are included in the labor force, the labor force is _____ million.

Accepted Answer

A)  1 
B)  11 
C)  32 
D)  33 
A)  1 
B)  11 
C)  32 
D)  33

Question 17

Which annual rate of inflation is hyperinflation?

Accepted Answer

A)  5% 
B)  13% 
C)  25% 
D)  2,000% 
A)  5% 
B)  13% 
C)  25% 
D)  2,000%

Question 18

If the price level at the end of year 1 is 150 and the price level at the end of year 2 is 160, the inflation rate in year 2 is 6.67%.

Accepted Answer

A) True 
 B)False

Question 19

Use the following to answer questions:  
-(Figure: The Labor Market) Use Figure: The Labor Market. What is the unemployment rate at an efficiency wage of $16, assuming all workers without a job are searching?

Accepted Answer

A)  10% 
B)  20% 
C)  27% 
D)  73% 
A)  10% 
B)  20% 
C)  27% 
D)  73%

Question 20

If a country has a working-age population of 200 million, 120 million people with jobs, and 30 million people unemployed and seeking employment, then its unemployment rate is:

Accepted Answer

A)  5%. 
B)  7.5%. 
C)  15%. 
D)  20%. 
A)  5%. 
B)  7.5%. 
C)  15%. 
D)  20%.

Both binding minimum wages and union wages may cause structural unemployment.

Menu costs of inflation are the:

The natural rate of unemployment:

If the nominal interest rate is 4% and the inflation rate is 1%, then the real interest rate is 5%.

If there are 100 million people in the total population, a labor force of 50 million, and 47 million employed workers, the unemployment rate is _____%.

If the growth rate of GDP is above its historical average, then there is a tendency for the unemployment rate to:

Cyclical unemployment:

If Jenny's income is $120,000 and the price level is 4, then Jenny's real income is $30,000.

The deviations from the natural rate of unemployment in the actual rate of unemployment are:

Between 1921 and 1923, Germany underwent:

In 2002, France replaced its national currency, the franc, with the:

In February 2012, the Bureau of Labor Statistics calculated the unemployment rate to be 8.3%. If frictional unemployment was 2% and structural unemployment was 3.2%, then cyclical unemployment was _____%.

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 W_F. The quantity of labor supplied may_____, resulting in structural unemployment.

If the price level at the end of year 1 is 150 and the price level at the end of year 2 is 160, the inflation rate in year 2 is 10%.

When hyperinflation forces Pedro to change the price stickers on the books in his bookstore very frequently to keep up with the aggregate price level, economists say that Pedro has a:

Use the following to answer questions: -(Table: Employment Data) Use Table: Employment Data. If marginally attached workers are included in the labor force, the labor force is _____ million.

Which annual rate of inflation is hyperinflation?

If the price level at the end of year 1 is 150 and the price level at the end of year 2 is 160, the inflation rate in year 2 is 6.67%.

Use the following to answer questions: -(Figure: The Labor Market) Use Figure: The Labor Market. What is the unemployment rate at an efficiency wage of $16, assuming all workers without a job are searching?

If a country has a working-age population of 200 million, 120 million people with jobs, and 30 million people unemployed and seeking employment, then its unemployment rate 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

Both binding minimum wages and union wages may cause structural unemployment.

Menu costs of inflation are the:

The natural rate of unemployment:

If the nominal interest rate is 4% and the inflation rate is 1%, then the real interest rate is 5%.

If there are 100 million people in the total population, a labor force of 50 million, and 47 million employed workers, the unemployment rate is _____%.

If the growth rate of GDP is above its historical average, then there is a tendency for the unemployment rate to:

Cyclical unemployment:

If Jenny's income is $120,000 and the price level is 4, then Jenny's real income is $30,000.

The deviations from the natural rate of unemployment in the actual rate of unemployment are:

Between 1921 and 1923, Germany underwent:

In 2002, France replaced its national currency, the franc, with the:

In February 2012, the Bureau of Labor Statistics calculated the unemployment rate to be 8.3%. If frictional unemployment was 2% and structural unemployment was 3.2%, then cyclical unemployment was _____%.

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. The quantity of labor supplied may_____, resulting in structural unemployment.

If the price level at the end of year 1 is 150 and the price level at the end of year 2 is 160, the inflation rate in year 2 is 10%.

When hyperinflation forces Pedro to change the price stickers on the books in his bookstore very frequently to keep up with the aggregate price level, economists say that Pedro has a:

Use the following to answer questions: -(Table: Employment Data) Use Table: Employment Data. If marginally attached workers are included in the labor force, the labor force is _____ million.

Which annual rate of inflation is hyperinflation?

If the price level at the end of year 1 is 150 and the price level at the end of year 2 is 160, the inflation rate in year 2 is 6.67%.

Use the following to answer questions: -(Figure: The Labor Market) Use Figure: The Labor Market. What is the unemployment rate at an efficiency wage of $16, assuming all workers without a job are searching?

If a country has a working-age population of 200 million, 120 million people with jobs, and 30 million people unemployed and seeking employment, then its unemployment rate 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 the labor market is in equilibrium at E when the government imposes a minimum wage of W_F. The quantity of labor supplied may_____, resulting in structural unemployment.