Question 1

The unemployment rate will increase whenever there is a(n):

Accepted Answer

A) increase in the number of unemployed persons. 
B) increase in the number of unemployed persons relative to the size of the labor force. 
C) increase in the size of the U.S.population but no change in the number of unemployed persons. 
D) increase in the size of the labor force. 
E) increase in the size of the U.S.population and a decrease in the number of unemployed persons. 
A) increase in the number of unemployed persons. 
B) increase in the number of unemployed persons relative to the size of the labor force. 
C) increase in the size of the U.S.population but no change in the number of unemployed persons. 
D) increase in the size of the labor force. 
E) increase in the size of the U.S.population and a decrease in the number of unemployed persons.

Question 2

A person whose skills do not match available job openings is considered frictionally unemployed.

Accepted Answer

A) True 
 B)False

Question 3

The official unemployment rate would be higher if it included the existence of hidden unemployment or individuals who are:

Accepted Answer

A) on unemployment compensation. 
B) not working. 
C) working part time but prefer full-time work. 
D) voluntarily retired. 
E) unemployed and looking for work. 
A) on unemployment compensation. 
B) not working. 
C) working part time but prefer full-time work. 
D) voluntarily retired. 
E) unemployed and looking for work.

Question 4

The type of unemployment most likely to be experienced by a touring professional golfer is:

Accepted Answer

A) frictional unemployment. 
B) structural unemployment. 
C) seasonal unemployment. 
D) cyclical unemployment. 
E) discouraged-worker unemployment. 
A) frictional unemployment. 
B) structural unemployment. 
C) seasonal unemployment. 
D) cyclical unemployment. 
E) discouraged-worker unemployment.

Question 5

Since World War II,the consumer price index has increased by an average of _____.

Accepted Answer

A) 1.4 percent per year 
B) 2.1 percent per year 
C) 6.4 percent per year 
D) 5.6 percent per year 
E) 3.5 percent per year 
A) 1.4 percent per year 
B) 2.1 percent per year 
C) 6.4 percent per year 
D) 5.6 percent per year 
E) 3.5 percent per year

Question 6

_____ unemployment is experienced by a customer service representative who is laid off from a job because new technology reduces the need for people to handle customer service inquiries.

Accepted Answer

A) Seasonal 
B) Cyclical 
C) Voluntary 
D) Structural 
E) Frictional 
A) Seasonal 
B) Cyclical 
C) Voluntary 
D) Structural 
E) Frictional

Question 7

Suppose there is a 3 percent increase in the nominal wages of workers in an economy.The annual rate of inflation in the economy is about 6 percent.Which of the following is true in this case?

Accepted Answer

A) Real wages would fall by about 3 percent. 
B) Real wages would increase by about 20 percent. 
C) Real wages would fall by about 25 percent. 
D) Real wages would increase by about 50 percent. 
E) Real wages would increase by about 10 percent. 
A) Real wages would fall by about 3 percent. 
B) Real wages would increase by about 20 percent. 
C) Real wages would fall by about 25 percent. 
D) Real wages would increase by about 50 percent. 
E) Real wages would increase by about 10 percent.

Question 8

If the nominal interest rate is 5 percent and there is no inflation,_____.

Accepted Answer

A) the real interest rate exceeds 5 percent 
B) the real interest rate is less than 5 percent 
C) the real interest rate is 5 percent 
D) there is not enough information to determine the real interest rate 
E) the real interest rate is zero 
A) the real interest rate exceeds 5 percent 
B) the real interest rate is less than 5 percent 
C) the real interest rate is 5 percent 
D) there is not enough information to determine the real interest rate 
E) the real interest rate is zero

Question 9

An increase in the demand for loanable funds,other things constant,will increase the interest rate.

Accepted Answer

A) True 
 B)False

Question 10

If the official unemployment rate increases from February to March because of sluggish sales in the automobile industry,then the increase can be blamed on:

Accepted Answer

A) seasonal unemployment. 
B) cyclical unemployment. 
C) structural unemployment. 
D) frictional unemployment. 
E) underemployment. 
A) seasonal unemployment. 
B) cyclical unemployment. 
C) structural unemployment. 
D) frictional unemployment. 
E) underemployment.

Question 11

A decrease in a person's real wage necessarily means:

Accepted Answer

A) lower purchasing power. 
B) a lower nominal wage. 
C) a lower personal disposable income. 
D) a higher nominal wage. 
E) a higher personal disposable income. 
A) lower purchasing power. 
B) a lower nominal wage. 
C) a lower personal disposable income. 
D) a higher nominal wage. 
E) a higher personal disposable income.

Question 12

Which of the following is true of labor force participation rates in the United States since the 1950s?

Accepted Answer

A) The rates for both men and women have risen. 
B) The rate for women has fallen;the rate for men has risen. 
C) The rate for men has fallen;the rate for women has increased. 
D) The rates for both men and women have fallen. 
E) The rates for both men and women have remained fairly constant. 
A) The rates for both men and women have risen. 
B) The rate for women has fallen;the rate for men has risen. 
C) The rate for men has fallen;the rate for women has increased. 
D) The rates for both men and women have fallen. 
E) The rates for both men and women have remained fairly constant.

Question 13

Frictional unemployment refers to unemployment that is a result of:

Accepted Answer

A) a mismatch of skills. 
B) being out of work 27 weeks or longer. 
C) job search. 
D) seasonal decreases in demand for labor. 
E) a recession in the economy. 
A) a mismatch of skills. 
B) being out of work 27 weeks or longer. 
C) job search. 
D) seasonal decreases in demand for labor. 
E) a recession in the economy.

Question 14

Which of the following people is least likely to be hurt by inflation?

Accepted Answer

A) A salesperson who works on commission 
B) A retired couple living on a pension 
C) An individual who enters into a fixed-wage contract for the next three years 
D) An individual who agrees to lend money at a fixed rate of interest for the next three years 
E) An individual working at the minimum wage which seldom changes 
A) A salesperson who works on commission 
B) A retired couple living on a pension 
C) An individual who enters into a fixed-wage contract for the next three years 
D) An individual who agrees to lend money at a fixed rate of interest for the next three years 
E) An individual working at the minimum wage which seldom changes

Question 15

Which of the following is likely to happen if people suddenly become more willing to lend money?

Accepted Answer

A) An increase in demand for loanable funds will increase the interest rate. 
B) An increase in the supply of loanable funds will increase the interest rate. 
C) An increase in the supply of loanable funds will decrease the interest rate. 
D) An increase in demand for loanable funds will decrease the interest rate. 
E) A simultaneous increase in both the supply of and demand for loanable funds makes it impossible to predict what will happen to the rate of interest. 
A) An increase in demand for loanable funds will increase the interest rate. 
B) An increase in the supply of loanable funds will increase the interest rate. 
C) An increase in the supply of loanable funds will decrease the interest rate. 
D) An increase in demand for loanable funds will decrease the interest rate. 
E) A simultaneous increase in both the supply of and demand for loanable funds makes it impossible to predict what will happen to the rate of interest.

Question 16

Raul borrowed $1,000 from Marta for a year and agreed to repay her $1,050 at the end of the year.If the inflation rate was 3 percent,which of the following is the real rate of interest Marta received?

Accepted Answer

A) 10 percent 
B) 5 percent 
C) 3 percent 
D) 2 percent 
E) −2 percent 
A) 10 percent 
B) 5 percent 
C) 3 percent 
D) 2 percent 
E) −2 percent

Question 17

Underemployment refers to:

Accepted Answer

A) seasonal unemployment. 
B) people working full time though they would rather work part time. 
C) the unemployment that occurs when the actual level of employment is less than the full employment level. 
D) people working in jobs that do not fully use their skills. 
E) people working part time. 
A) seasonal unemployment. 
B) people working full time though they would rather work part time. 
C) the unemployment that occurs when the actual level of employment is less than the full employment level. 
D) people working in jobs that do not fully use their skills. 
E) people working part time.

Question 18

The nominal interest rate:

Accepted Answer

A) varies directly with the rate of expected inflation in an economy. 
B) is the interest rate expressed in dollars of constant purchasing power. 
C) equals the difference between the real interest rate and the inflation rate. 
D) is the basis for decisions taken by the lenders and the borrowers in an economy. 
E) is the percentage increase in the average price level from one year to the next. 
A) varies directly with the rate of expected inflation in an economy. 
B) is the interest rate expressed in dollars of constant purchasing power. 
C) equals the difference between the real interest rate and the inflation rate. 
D) is the basis for decisions taken by the lenders and the borrowers in an economy. 
E) is the percentage increase in the average price level from one year to the next.

Question 19

Which of the following factors makes the official unemployment rate an overstatement of the actual level of unemployment in the economy?

Accepted Answer

A) Inclusion of discouraged workers 
B) Inclusion of those only working part time 
C) Inclusion of those who are overqualified for their current jobs 
D) Inclusion of those who are marginally attached to the labor force 
E) Inclusion of those who pretend to look for work in order to qualify for welfare programs 
A) Inclusion of discouraged workers 
B) Inclusion of those only working part time 
C) Inclusion of those who are overqualified for their current jobs 
D) Inclusion of those who are marginally attached to the labor force 
E) Inclusion of those who pretend to look for work in order to qualify for welfare programs

Question 20

Discouraged workers are included in labor force figures,but not in unemployment figures.

Accepted Answer

A) True 
 B)False

The unemployment rate will increase whenever there is a(n):

A person whose skills do not match available job openings is considered frictionally unemployed.

The official unemployment rate would be higher if it included the existence of hidden unemployment or individuals who are:

The type of unemployment most likely to be experienced by a touring professional golfer is:

Since World War II,the consumer price index has increased by an average of _____.

_____ unemployment is experienced by a customer service representative who is laid off from a job because new technology reduces the need for people to handle customer service inquiries.

Suppose there is a 3 percent increase in the nominal wages of workers in an economy.The annual rate of inflation in the economy is about 6 percent.Which of the following is true in this case?

If the nominal interest rate is 5 percent and there is no inflation,_____.

An increase in the demand for loanable funds,other things constant,will increase the interest rate.

If the official unemployment rate increases from February to March because of sluggish sales in the automobile industry,then the increase can be blamed on:

A decrease in a person's real wage necessarily means:

Which of the following is true of labor force participation rates in the United States since the 1950s?

Frictional unemployment refers to unemployment that is a result of:

Which of the following people is least likely to be hurt by inflation?

Which of the following is likely to happen if people suddenly become more willing to lend money?

Raul borrowed $1,000 from Marta for a year and agreed to repay her $1,050 at the end of the year.If the inflation rate was 3 percent,which of the following is the real rate of interest Marta received?

Underemployment refers to:

The nominal interest rate:

Which of the following factors makes the official unemployment rate an overstatement of the actual level of unemployment in the economy?

Discouraged workers are included in labor force figures,but not in unemployment figures.

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

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Exam 7: Unemployment and Inflation

The unemployment rate will increase whenever there is a(n):

A person whose skills do not match available job openings is considered frictionally unemployed.

The official unemployment rate would be higher if it included the existence of hidden unemployment or individuals who are:

The type of unemployment most likely to be experienced by a touring professional golfer is:

Since World War II,the consumer price index has increased by an average of _____.

_____ unemployment is experienced by a customer service representative who is laid off from a job because new technology reduces the need for people to handle customer service inquiries.

Suppose there is a 3 percent increase in the nominal wages of workers in an economy.The annual rate of inflation in the economy is about 6 percent.Which of the following is true in this case?

If the nominal interest rate is 5 percent and there is no inflation,_____.

An increase in the demand for loanable funds,other things constant,will increase the interest rate.

If the official unemployment rate increases from February to March because of sluggish sales in the automobile industry,then the increase can be blamed on:

A decrease in a person's real wage necessarily means:

Which of the following is true of labor force participation rates in the United States since the 1950s?

Frictional unemployment refers to unemployment that is a result of:

Which of the following people is least likely to be hurt by inflation?

Which of the following is likely to happen if people suddenly become more willing to lend money?

Raul borrowed $1,000 from Marta for a year and agreed to repay her $1,050 at the end of the year.If the inflation rate was 3 percent,which of the following is the real rate of interest Marta received?

Underemployment refers to:

The nominal interest rate:

Which of the following factors makes the official unemployment rate an overstatement of the actual level of unemployment in the economy?

Discouraged workers are included in labor force figures,but not in unemployment figures.

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters