Question 1

What has been the range for the duration in months of U.S.recessions between 1950 and 2009?

Accepted Answer

A) 2 months to 5 months 
B) 6 months to 18 months 
C) 19 months to 25 months 
D) 26 months to 30 months 
A) 2 months to 5 months 
B) 6 months to 18 months 
C) 19 months to 25 months 
D) 26 months to 30 months

Question 2

In the 1920s, Germany after the First World War experienced an economic condition that can be best described as

Accepted Answer

A) hyperinflation. 
B) cost-push inflation. 
C) unanticipated inflation. 
D) anticipated inflation. 
A) hyperinflation. 
B) cost-push inflation. 
C) unanticipated inflation. 
D) anticipated inflation.

Question 3

The natural rate of unemployment is the

Accepted Answer

A) unemployment rate experienced at the depth of a depression. 
B) full-employment unemployment rate. 
C) unemployment rate experienced by the least-skilled workers in the economy. 
D) unemployment rate experienced by the most-skilled workers in the economy. 
A) unemployment rate experienced at the depth of a depression. 
B) full-employment unemployment rate. 
C) unemployment rate experienced by the least-skilled workers in the economy. 
D) unemployment rate experienced by the most-skilled workers in the economy.

Question 4

The presence of discouraged workers Learning Objective: 29-02 Illustrate how unemployment is measured and explain the different types of unemployment.Test Bank: I Topic: Unemployment

Accepted Answer

A) increases the size of the labor force but does not affect the unemployment rate. 
B) reduces the size of the labor force but does not affect the unemployment rate. 
C) may cause the official unemployment rate to understate the true amount of unemployment. 
D) may cause the official unemployment rate to overstate the true amount of unemployment. 
A) increases the size of the labor force but does not affect the unemployment rate. 
B) reduces the size of the labor force but does not affect the unemployment rate. 
C) may cause the official unemployment rate to understate the true amount of unemployment. 
D) may cause the official unemployment rate to overstate the true amount of unemployment.

Question 5

If the total population is 175 million, the labor force is 100 million, and 89 million workers are employed, then the unemployment rate is 11 percent.

Accepted Answer

A) True 
 B)False

Question 6

Unanticipated inflation helps some groups in the economy.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following groups declares the start and end of recessions in the United States?

Accepted Answer

A) the Business Cycle Monitoring Committee of the Federal Reserve System 
B) the Business Cycle Tracking Agency of the Department of Commerce 
C) the Business Cycle Dating Committee of the National Bureau of Economic Research 
D) the Committee on Business Cycles of the Council of Economic Advisers 
A) the Business Cycle Monitoring Committee of the Federal Reserve System 
B) the Business Cycle Tracking Agency of the Department of Commerce 
C) the Business Cycle Dating Committee of the National Bureau of Economic Research 
D) the Committee on Business Cycles of the Council of Economic Advisers

Question 8

If actual GDP is $340 billion and there is a positive GDP gap of $20 billion, potential GDP is

Accepted Answer

A) $360 billion. 
B) $660 billion. 
C) $320 billion. 
D) $20 billion. 
A) $360 billion. 
B) $660 billion. 
C) $320 billion. 
D) $20 billion.

Question 9

Susie has lost her job in a Vermont textile plant because of import competition.She intends to take a short course in electronics and move to Oregon, where she anticipates that a new job will be available.We can say that Susie is faced with

Accepted Answer

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

Question 10

If the Consumer Price Index for a certain year is 120, this means that the average price of consumer items in that year was

Accepted Answer

A) 20 percent higher than the average price in the base period 1982-84. 
B) about $120 per basket of consumer goods and services. 
C) 120 percent higher than the average price in the base period 1982-84. 
D) 20 percent higher than the average price of the preceding year. 
A) 20 percent higher than the average price in the base period 1982-84. 
B) about $120 per basket of consumer goods and services. 
C) 120 percent higher than the average price in the base period 1982-84. 
D) 20 percent higher than the average price of the preceding year.

Question 11

The production of durable goods is more stable than the production of nondurables over the business cycle.

Accepted Answer

A) True 
 B)False

Question 12

Recurring upswings and downswings in an economy's real GDP over time are called

Accepted Answer

A) recessions. 
B) business cycles. 
C) output yo-yos. 
D) total product oscillations. 
A) recessions. 
B) business cycles. 
C) output yo-yos. 
D) total product oscillations.

Question 13

During a period of hyperinflation,

Accepted Answer

A) creditors gain because their loans are repaid with dollars of higher value. 
B) people tend to hold goods rather than money. 
C) income is redistributed away from borrowers. 
D) the real value of the national currency rises. 
A) creditors gain because their loans are repaid with dollars of higher value. 
B) people tend to hold goods rather than money. 
C) income is redistributed away from borrowers. 
D) the real value of the national currency rises.

Question 14

A concern about negative nominal interest rates is that they will encourage more saving by people trying to compensate for the negative return on their money saved.

Accepted Answer

A) True 
 B)False

Question 15

Suppose that a person's nominal income rises by 5 percent and the price level rises from 125 to 130.The person's real income will

Accepted Answer

A) fall by about 1 percent. 
B) remain constant. 
C) rise by about 4 percent. 
D) rise by about 1 percent. 
A) fall by about 1 percent. 
B) remain constant. 
C) rise by about 4 percent. 
D) rise by about 1 percent.

Question 16

If the GDP gap is positive, then

Accepted Answer

A) the inflation rate is falling. 
B) the unemployment rate is rising. 
C) potential GDP is greater than actual GDP. 
D) actual GDP is greater than potential GDP. 
A) the inflation rate is falling. 
B) the unemployment rate is rising. 
C) potential GDP is greater than actual GDP. 
D) actual GDP is greater than potential GDP.

Question 17

Core inflation refers to the inflation picture after stripping away the

Accepted Answer

A) capital goods prices. 
B) food and energy prices. 
C) government-regulated prices. 
D) service-sector prices. 
A) capital goods prices. 
B) food and energy prices. 
C) government-regulated prices. 
D) service-sector prices.

Question 18

A recession is defined as a period in which

Accepted Answer

A) cost-push inflation is present. 
B) nominal domestic output falls. 
C) demand-pull inflation is present. 
D) real domestic output falls. 
A) cost-push inflation is present. 
B) nominal domestic output falls. 
C) demand-pull inflation is present. 
D) real domestic output falls.

Question 19

A college graduate using the summer following graduation to search for a job would best be classified as

Accepted Answer

A) not officially a member of the labor force. 
B) structurally unemployed. 
C) cyclically unemployed. 
D) frictionally unemployed. 
A) not officially a member of the labor force. 
B) structurally unemployed. 
C) cyclically unemployed. 
D) frictionally unemployed.

Question 20

Which measure of inflation would include consumer goods and capital goods?

Accepted Answer

A) the GDP Price Index 
B) the Consumer Price Index 
C) the Retail Trade Survey 
D) the Employment Cost Index 
A) the GDP Price Index 
B) the Consumer Price Index 
C) the Retail Trade Survey 
D) the Employment Cost Index

Exam 29: Business Cycles, Unemployment, and Inflation

What has been the range for the duration in months of U.S.recessions between 1950 and 2009?

In the 1920s, Germany after the First World War experienced an economic condition that can be best described as

The natural rate of unemployment is the

The presence of discouraged workers Learning Objective: 29-02 Illustrate how unemployment is measured and explain the different types of unemployment.Test Bank: I Topic: Unemployment

If the total population is 175 million, the labor force is 100 million, and 89 million workers are employed, then the unemployment rate is 11 percent.

Unanticipated inflation helps some groups in the economy.

Which of the following groups declares the start and end of recessions in the United States?

If actual GDP is $340 billion and there is a positive GDP gap of $20 billion, potential GDP is

Susie has lost her job in a Vermont textile plant because of import competition.She intends to take a short course in electronics and move to Oregon, where she anticipates that a new job will be available.We can say that Susie is faced with

If the Consumer Price Index for a certain year is 120, this means that the average price of consumer items in that year was

The production of durable goods is more stable than the production of nondurables over the business cycle.

Recurring upswings and downswings in an economy's real GDP over time are called

During a period of hyperinflation,

A concern about negative nominal interest rates is that they will encourage more saving by people trying to compensate for the negative return on their money saved.

Suppose that a person's nominal income rises by 5 percent and the price level rises from 125 to 130.The person's real income will

If the GDP gap is positive, then

Core inflation refers to the inflation picture after stripping away the

A recession is defined as a period in which

A college graduate using the summer following graduation to search for a job would best be classified as

Which measure of inflation would include consumer goods and capital goods?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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