Question 1

Rachel agrees to lend Phoebe $100 for six months and charges her interest of 2 percent.At the end of the six-month period, prices have risen by 4 percent.

Accepted Answer

A)  Purchasing power has been redistributed to Rachel. 
B)  No purchasing power has been redistributed. 
C)  Purchasing power has been redistributed to Phoebe. 
D)  Both Rachel and Phoebe received extra purchasing power. 
A)  Purchasing power has been redistributed to Rachel. 
B)  No purchasing power has been redistributed. 
C)  Purchasing power has been redistributed to Phoebe. 
D)  Both Rachel and Phoebe received extra purchasing power.

Question 2

As inflation rates increase, shoppers will be forced to

Accepted Answer

A)  shop more at a particular store. 
B)  spend less time comparing prices. 
C)  spend less time visiting other stores. 
D)  spend more time comparing prices. 
A)  shop more at a particular store. 
B)  spend less time comparing prices. 
C)  spend less time visiting other stores. 
D)  spend more time comparing prices.

Question 3

The relationship between industrial capacity percentage and

Accepted Answer

A)  the unemployment rate is indirect. 
B)  the unemployment rate is direct. 
C)  real GDP is indirect. 
D)  nominal GDP is indirect. 
A)  the unemployment rate is indirect. 
B)  the unemployment rate is direct. 
C)  real GDP is indirect. 
D)  nominal GDP is indirect.

Question 4

Changes in relative prices during inflationary periods usually lead to

Accepted Answer

A)  decreases in real income. 
B)  some people gaining real income. 
C)  increases in the purchasing power of money. 
D)  increases in real income. 
A)  decreases in real income. 
B)  some people gaining real income. 
C)  increases in the purchasing power of money. 
D)  increases in real income.

Question 5

The use of automated teller machines (ATMs) has caused some bank tellers to lose their jobs.This is an example of

Accepted Answer

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

Question 6

When various firms fail because their output is not demanded by society, workers may suffer

Accepted Answer

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

Question 7

The arithmetic difference between the nominal rate of interest and the expected rate of inflation is the

Accepted Answer

A)  expected interest rate. 
B)  real interest rate. 
C)  implied interest rate. 
D)  contractual interest rate. 
A)  expected interest rate. 
B)  real interest rate. 
C)  implied interest rate. 
D)  contractual interest rate.

Exam 23: The Goals of Macroeconomic Policy

Rachel agrees to lend Phoebe $100 for six months and charges her interest of 2 percent.At the end of the six-month period, prices have risen by 4 percent.

As inflation rates increase, shoppers will be forced to

The relationship between industrial capacity percentage and

Changes in relative prices during inflationary periods usually lead to

The use of automated teller machines (ATMs) has caused some bank tellers to lose their jobs.This is an example of

When various firms fail because their output is not demanded by society, workers may suffer

The arithmetic difference between the nominal rate of interest and the expected rate of inflation is the

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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