Question 1

If the wage rate is $20 per hour and the price level is 2, then the real wage is $40 per hour.

Accepted Answer

A) True 
 B)False

Question 2

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 $200,000 would become a debt of 25,000 new dollars.

Accepted Answer

A) True 
 B)False

Question 3

The real wage is the wage rate _____ the price level.

Accepted Answer

A)  plus 
B)  minus 
C)  divided by 
D)  multiplied by 
A)  plus 
B)  minus 
C)  divided by 
D)  multiplied by

Question 4

Unit-of-account costs arise when inflation makes it necessary to change listed prices very often.

Accepted Answer

A) True 
 B)False

Question 5

Last month, Brent lost his job at the auto parts factory because the factory relocated to Asia. Brent and his former coworkers have been looking for similar jobs, but they have found no openings. In Brent's town, the _____ labor has _____.

Accepted Answer

A)  supply of; fallen 
B)  supply of; risen 
C)  demand for; risen 
D)  demand for; fallen 
A)  supply of; fallen 
B)  supply of; risen 
C)  demand for; risen 
D)  demand for; fallen

Question 6

Last month, Brent lost his job at the auto parts factory because the factory relocated to Asia. Brent has been looking for similar jobs in his town but has found no openings. Brent is BEST classified as:

Accepted Answer

A)  structurally unemployed. 
B)  frictionally unemployed. 
C)  a discouraged worker. 
D)  out of the labor force. 
A)  structurally unemployed. 
B)  frictionally unemployed. 
C)  a discouraged worker. 
D)  out of the labor force.

Question 7

Use the following to answer questions:  
-(Table: Population Data for Estill County) Use Table: Population Data for Estill County. What is the labor force participation rate?

Accepted Answer

A)  64% 
B)  81% 
C)  17% 
D)  79% 
A)  64% 
B)  81% 
C)  17% 
D)  79%

Question 8

Suppose that Allison has an accounting degree, but she lost her job two months ago when her company merged with another firm. Allison hasn't been able to find another accounting job, so she has taken a part-time job as a sales clerk at a clothing store. As a result, the official unemployment rate will:

Accepted Answer

A)  not change. 
B)  increase. 
C)  decrease. 
D)  increase temporarily, then fall back to its original level. 
A)  not change. 
B)  increase. 
C)  decrease. 
D)  increase temporarily, then fall back to its original level.

Question 9

Unemployment is at its natural level if there is no:

Accepted Answer

A)  unemployment. 
B)  frictional unemployment. 
C)  structural employment. 
D)  cyclical unemployment. 
A)  unemployment. 
B)  frictional unemployment. 
C)  structural employment. 
D)  cyclical unemployment.

Question 10

Which situation is likely to lead to an INCREASE in discouraged workers?

Accepted Answer

A)  The economy is expanding. 
B)  The availability of jobs falls. 
C)  The economy is undergoing inflation. 
D)  The economy is undergoing deflation. 
A)  The economy is expanding. 
B)  The availability of jobs falls. 
C)  The economy is undergoing inflation. 
D)  The economy is undergoing deflation.

Question 11

During a recession:

Accepted Answer

A)  unemployment and the growth rate of real GDP both decrease. 
B)  unemployment decreases and the growth rate of real GDP increases. 
C)  unemployment increases and the growth rate of real GDP decreases. 
D)  there is no relation between unemployment and the growth rate of real GDP. 
A)  unemployment and the growth rate of real GDP both decrease. 
B)  unemployment decreases and the growth rate of real GDP increases. 
C)  unemployment increases and the growth rate of real GDP decreases. 
D)  there is no relation between unemployment and the growth rate of real GDP.

Question 12

Efficiency wages are:

Accepted Answer

A)  above equilibrium to encourage better performance. 
B)  below equilibrium to encourage better performance to get a raise. 
C)  responsible for all structural unemployment. 
D)  above equilibrium to encourage better performance and are responsible for all structural unemployment. 
A)  above equilibrium to encourage better performance. 
B)  below equilibrium to encourage better performance to get a raise. 
C)  responsible for all structural unemployment. 
D)  above equilibrium to encourage better performance and are responsible for all structural unemployment.

Question 13

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

Accepted Answer

A)  170 
B)  103 
C)  100 
D)  98 
A)  170 
B)  103 
C)  100 
D)  98

Question 14

Unanticipated inflation does NOT:

Accepted Answer

A)  reduce the value of money. 
B)  reduce the value of debt. 
C)  cause uncertainty about the future. 
D)  cause disinflation. 
A)  reduce the value of money. 
B)  reduce the value of debt. 
C)  cause uncertainty about the future. 
D)  cause disinflation.

Question 15

A jobless recovery occurs when GDP is decreasing and unemployment is rising.

Accepted Answer

A) True 
 B)False

Question 16

During the mid-1980s, Israel had a high rate of inflation, and prices often rose by more than 10% per month.

Accepted Answer

A) True 
 B)False

Question 17

When the rate of inflation is high, people usually transfer money from interest-bearing accounts into checking accounts more often than when inflation is low. This is an example of a menu cost.

Accepted Answer

A) True 
 B)False

Question 18

A survey reveals that, on a small island, initially 1,000 people have jobs, 250 people are not working but are looking for jobs, and 450 people are neither working nor looking for work. Suppose that 150 of the 450 people who weren't looking for work now begin looking for work. There are now 400 people looking for work and 1,000 people working. The unemployment rate:

Accepted Answer

A)  falls to 20%. 
B)  rises to 28.6%. 
C)  rises to 50%. 
D)  Nothing happens to the unemployment rate because these people weren't working before and they aren't working now. 
A)  falls to 20%. 
B)  rises to 28.6%. 
C)  rises to 50%. 
D)  Nothing happens to the unemployment rate because these people weren't working before and they aren't working now.

Question 19

If the actual unemployment rate is 7% and the natural rate is 5%, then the cyclical rate is:

Accepted Answer

A)  2%. 
B)  5%. 
C)  7%. 
D)  9%. 
A)  2%. 
B)  5%. 
C)  7%. 
D)  9%.

Question 20

Suppose that the real interest rate is 2.1% and the nominal interest rate is 5.4%. The inflation rate is _____%.

Accepted Answer

A)  7.5 
B)  3.3 
C)  -3.3 
D)  2.1 
A)  7.5 
B)  3.3 
C)  -3.3 
D)  2.1

If the wage rate is $20 per hour and the price level is 2, then the real wage is $40 per hour.

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 $200,000 would become a debt of 25,000 new dollars.

The real wage is the wage rate _____ the price level.

Unit-of-account costs arise when inflation makes it necessary to change listed prices very often.

Last month, Brent lost his job at the auto parts factory because the factory relocated to Asia. Brent and his former coworkers have been looking for similar jobs, but they have found no openings. In Brent's town, the _ labor has _.

Last month, Brent lost his job at the auto parts factory because the factory relocated to Asia. Brent has been looking for similar jobs in his town but has found no openings. Brent is BEST classified as:

Use the following to answer questions: -(Table: Population Data for Estill County) Use Table: Population Data for Estill County. What is the labor force participation rate?

Unemployment is at its natural level if there is no:

Which situation is likely to lead to an INCREASE in discouraged workers?

During a recession:

Efficiency wages are:

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

Unanticipated inflation does NOT:

A jobless recovery occurs when GDP is decreasing and unemployment is rising.

During the mid-1980s, Israel had a high rate of inflation, and prices often rose by more than 10% per month.

When the rate of inflation is high, people usually transfer money from interest-bearing accounts into checking accounts more often than when inflation is low. This is an example of a menu cost.

If the actual unemployment rate is 7% and the natural rate is 5%, then the cyclical rate is:

Suppose that the real interest rate is 2.1% and the nominal interest rate is 5.4%. The inflation 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

If the wage rate is $20 per hour and the price level is 2, then the real wage is $40 per hour.

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 $200,000 would become a debt of 25,000 new dollars.

The real wage is the wage rate _____ the price level.

Unit-of-account costs arise when inflation makes it necessary to change listed prices very often.

Last month, Brent lost his job at the auto parts factory because the factory relocated to Asia. Brent and his former coworkers have been looking for similar jobs, but they have found no openings. In Brent's town, the _____ labor has _____.

Last month, Brent lost his job at the auto parts factory because the factory relocated to Asia. Brent has been looking for similar jobs in his town but has found no openings. Brent is BEST classified as:

Use the following to answer questions: -(Table: Population Data for Estill County) Use Table: Population Data for Estill County. What is the labor force participation rate?

Unemployment is at its natural level if there is no:

Which situation is likely to lead to an INCREASE in discouraged workers?

During a recession:

Efficiency wages are:

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

Unanticipated inflation does NOT:

A jobless recovery occurs when GDP is decreasing and unemployment is rising.

During the mid-1980s, Israel had a high rate of inflation, and prices often rose by more than 10% per month.

When the rate of inflation is high, people usually transfer money from interest-bearing accounts into checking accounts more often than when inflation is low. This is an example of a menu cost.

If the actual unemployment rate is 7% and the natural rate is 5%, then the cyclical rate is:

Suppose that the real interest rate is 2.1% and the nominal interest rate is 5.4%. The inflation 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

Last month, Brent lost his job at the auto parts factory because the factory relocated to Asia. Brent and his former coworkers have been looking for similar jobs, but they have found no openings. In Brent's town, the _ labor has _.