Question 1

What is a "cost-of-living" adjustment?

Accepted Answer

Increases in nominal

Question 2

What is frictional unemployment?

Accepted Answer

Frictional unemployment is unemployment

Question 3

Economists consider the economy to be at "full employment" when there is no cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 4

In November 2008, the MONTHLY rate of inflation in Zimbabwe approached 79 BILLION percent. An inflation rate such as this would

Accepted Answer

A)  seriously disrupt normal commerce. 
B)  decrease the natural rate of unemployment. 
C)  be too high to calculate using the CPI. 
D)  all of the above 
A)  seriously disrupt normal commerce. 
B)  decrease the natural rate of unemployment. 
C)  be too high to calculate using the CPI. 
D)  all of the above

Question 5

Since the 1930s the United States has experienced continuous deflation.

Accepted Answer

A) True 
 B)False

Question 6

Actual unemployment can exceed the natural rate of unemployment due to

Accepted Answer

A)  structural unemployment. 
B)  cyclical unemployment. 
C)  frictional unemployment. 
D)  all of the above 
A)  structural unemployment. 
B)  cyclical unemployment. 
C)  frictional unemployment. 
D)  all of the above

Question 7

Explain what is meant by the terms "labor force," "unemployment rate," and "labor force participation rate."

Accepted Answer

The labor force comprises all workers wh

Question 8

One cost of unanticipated inflation is

Accepted Answer

A)  both lenders and borrowers lose. 
B)  arbitrary redistributions of income. 
C)  nominal income falls below real income. 
D)  people cannot repay their debts. 
A)  both lenders and borrowers lose. 
B)  arbitrary redistributions of income. 
C)  nominal income falls below real income. 
D)  people cannot repay their debts.

Question 9

Marginally attached workers are discouraged workers who have stopped their job search for reasons other than the lack of jobs.

Accepted Answer

A) True 
 B)False

Question 10

Cyclical unemployment occurs

Accepted Answer

A)  because the government labels some people who aren't really in the labor force as unemployed. 
B)  with economic fluctuations; it increases during bad times and decreases during good times. 
C)  naturally during the normal workings of an economy, as people change jobs, move across the country, etc. 
D)  because of a mismatch between the jobs that are available in the economy and the skills of workers seeking jobs. 
A)  because the government labels some people who aren't really in the labor force as unemployed. 
B)  with economic fluctuations; it increases during bad times and decreases during good times. 
C)  naturally during the normal workings of an economy, as people change jobs, move across the country, etc. 
D)  because of a mismatch between the jobs that are available in the economy and the skills of workers seeking jobs.

Question 11

Inflation must be high in Moscow because it is very expensive to live there.

Accepted Answer

A) True 
 B)False

Question 12

At full employment there is no

Accepted Answer

A)  structural unemployment. 
B)  cyclical unemployment. 
C)  frictional unemployment. 
D)  all of the above 
A)  structural unemployment. 
B)  cyclical unemployment. 
C)  frictional unemployment. 
D)  all of the above

Question 13

Steel workers laid off from their jobs as the result of a recession are considered

Accepted Answer

A)  structurally unemployed. 
B)  cyclically unemployed. 
C)  frictionally unemployed. 
D)  seasonally unemployed. 
A)  structurally unemployed. 
B)  cyclically unemployed. 
C)  frictionally unemployed. 
D)  seasonally unemployed.

Question 14

Most economists believe that the CPI overstates the actual changes in prices while the chain index for GDP understates them.

Accepted Answer

A) True 
 B)False

Question 15

Economic expansions might lead to inflation because an expansion leads to

Accepted Answer

A)  a decrease in the unemployment rate, which increases wages. 
B)  an increase in the unemployment rate, which increases wages. 
C)  a decrease in the unemployment rate, which decreases wages. 
D)  an increase in the unemployment rate, which decreases wages. 
A)  a decrease in the unemployment rate, which increases wages. 
B)  an increase in the unemployment rate, which increases wages. 
C)  a decrease in the unemployment rate, which decreases wages. 
D)  an increase in the unemployment rate, which decreases wages.

Question 16

If you take out a bank loan prior to unanticipated inflation

Accepted Answer

A)  it will be harder for you to repay the loan because of the inflated dollar. 
B)  you will gain at the expense of your bank. 
C)  your bank will gain at your expense. 
D)  neither you nor your bank will be affected, because the loan was made prior to the inflation. 
A)  it will be harder for you to repay the loan because of the inflated dollar. 
B)  you will gain at the expense of your bank. 
C)  your bank will gain at your expense. 
D)  neither you nor your bank will be affected, because the loan was made prior to the inflation.

Question 17

The fraction of the working-age population that is in the labor force is called the

Accepted Answer

A)  employment rate. 
B)  unemployment rate. 
C)  labor force participation rate. 
D)  nonresponse rate. 
A)  employment rate. 
B)  unemployment rate. 
C)  labor force participation rate. 
D)  nonresponse rate.

Question 18

People who stopped looking for work because they could not find jobs are called discouraged workers.

Accepted Answer

A) True 
 B)False

Question 19

Which one of the following statements is true of the Consumer Price Index?

Accepted Answer

A)  It does not take account of the price of imported goods and services. 
B)  It measures changes in prices of a fixed basket of goods. 
C)  It does not take into account the price of used goods. 
D)  It understates the true rate of inflation. 
A)  It does not take account of the price of imported goods and services. 
B)  It measures changes in prices of a fixed basket of goods. 
C)  It does not take into account the price of used goods. 
D)  It understates the true rate of inflation.

Question 20

Name two types of jobs most likely affected by "seasonal unemployment."

Accepted Answer

farming, c

What is a "cost-of-living" adjustment?

What is frictional unemployment?

Economists consider the economy to be at "full employment" when there is no cyclical unemployment.

In November 2008, the MONTHLY rate of inflation in Zimbabwe approached 79 BILLION percent. An inflation rate such as this would

Since the 1930s the United States has experienced continuous deflation.

Actual unemployment can exceed the natural rate of unemployment due to

Explain what is meant by the terms "labor force," "unemployment rate," and "labor force participation rate."

One cost of unanticipated inflation is

Marginally attached workers are discouraged workers who have stopped their job search for reasons other than the lack of jobs.

Cyclical unemployment occurs

Inflation must be high in Moscow because it is very expensive to live there.

At full employment there is no

Steel workers laid off from their jobs as the result of a recession are considered

Most economists believe that the CPI overstates the actual changes in prices while the chain index for GDP understates them.

Economic expansions might lead to inflation because an expansion leads to

If you take out a bank loan prior to unanticipated inflation

The fraction of the working-age population that is in the labor force is called the

People who stopped looking for work because they could not find jobs are called discouraged workers.

Which one of the following statements is true of the Consumer Price Index?

Name two types of jobs most likely affected by "seasonal unemployment."

Introduction: What Is Economics?

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Measuring a Nation's Production and Income

The Economy at Full Employment

Why Do Economies Grow?

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters

Exam 6:Unemployment and Inflation

What is a "cost-of-living" adjustment?

What is frictional unemployment?

Economists consider the economy to be at "full employment" when there is no cyclical unemployment.

In November 2008, the MONTHLY rate of inflation in Zimbabwe approached 79 BILLION percent. An inflation rate such as this would

Since the 1930s the United States has experienced continuous deflation.

Actual unemployment can exceed the natural rate of unemployment due to

Explain what is meant by the terms "labor force," "unemployment rate," and "labor force participation rate."

One cost of unanticipated inflation is

Marginally attached workers are discouraged workers who have stopped their job search for reasons other than the lack of jobs.

Cyclical unemployment occurs

Inflation must be high in Moscow because it is very expensive to live there.

At full employment there is no

Steel workers laid off from their jobs as the result of a recession are considered

Most economists believe that the CPI overstates the actual changes in prices while the chain index for GDP understates them.

Economic expansions might lead to inflation because an expansion leads to

If you take out a bank loan prior to unanticipated inflation

The fraction of the working-age population that is in the labor force is called the

People who stopped looking for work because they could not find jobs are called discouraged workers.

Which one of the following statements is true of the Consumer Price Index?

Name two types of jobs most likely affected by "seasonal unemployment."

Introduction: What Is Economics?

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Measuring a Nation's Production and Income

The Economy at Full Employment

Why Do Economies Grow?

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters