Question 1

In the contemporary United States, labor productivity has been growing at approximately

Accepted Answer

A)  1.5 percent per year 
B)  2.0 percent per year. 
C)  2.6 percent per year. 
D)  3.9 percent per year. 
A)  1.5 percent per year 
B)  2.0 percent per year. 
C)  2.6 percent per year. 
D)  3.9 percent per year.

Question 2

If you purchased shares of common stock in 1990 for $1,000 and sold them for $2,000 in 2001 you would be liable for taxes on

Accepted Answer

A)  $2,000. 
B)  $1,000 less the rate of inflation. 
C)  $1,000. 
D)  $2,000 less the rate of inflation. 
A)  $2,000. 
B)  $1,000 less the rate of inflation. 
C)  $1,000. 
D)  $2,000 less the rate of inflation.

Question 3

Economists oppose limiting economic growth possibilities because such limits would inevitably involve

Accepted Answer

A)  some expansion of private sector production. 
B)  an increase in government spending. 
C)  some form of mandatory controls on economic activity. 
D)  mandated balanced federal budgets. 
A)  some expansion of private sector production. 
B)  an increase in government spending. 
C)  some form of mandatory controls on economic activity. 
D)  mandated balanced federal budgets.

Question 4

The most likely group of the following that would be eligible for unemployment insurance benefits is

Accepted Answer

A)  new college graduates looking for their first job. 
B)  mothers returning to the labor force after caring for young children. 
C)  workers who quit their jobs. 
D)  experienced workers recently laid off. 
A)  new college graduates looking for their first job. 
B)  mothers returning to the labor force after caring for young children. 
C)  workers who quit their jobs. 
D)  experienced workers recently laid off.

Question 5

If both borrowers and lenders anticipate the rate of inflation correctly, then

Accepted Answer

A)  borrowers will lose real income. 
B)  lenders will lose real income. 
C)  both borrowers and lenders will lose real income. 
D)  neither borrowers nor lenders will lose real income. 
A)  borrowers will lose real income. 
B)  lenders will lose real income. 
C)  both borrowers and lenders will lose real income. 
D)  neither borrowers nor lenders will lose real income.

Question 6

Someone who is out of work because they are between jobs is experiencing

Accepted Answer

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

Question 7

Paying into a pension fund while you are earning wages and salaries is equivalent to

Accepted Answer

A)  borrowing money. 
B)  lending money. 
C)  withdrawing from a savings account. 
D)  paying off debt. 
A)  borrowing money. 
B)  lending money. 
C)  withdrawing from a savings account. 
D)  paying off debt.

Question 8

Faster economic growth imposes an opportunity cost in the form of

Accepted Answer

A)  reduced current consumption. 
B)  a larger capital stock. 
C)  increased investment. 
D)  increased future income. 
A)  reduced current consumption. 
B)  a larger capital stock. 
C)  increased investment. 
D)  increased future income.

Question 9

Inflation is a serious problem because inflation causes real wages to decline.

Accepted Answer

A) True 
 B)False

Question 10

The growth of the labor force and the growth of labor productivity help determine the rate of GDP growth.

Accepted Answer

A) True 
 B)False

Question 11

The unemployment rate that many economists believe represents full employment is

Accepted Answer

A)  0 percent. 
B)  0-4 percent. 
C)  4-6 percent. 
D)  6-8 percent. 
E)  8-10 percent 
A)  0 percent. 
B)  0-4 percent. 
C)  4-6 percent. 
D)  6-8 percent. 
E)  8-10 percent

Question 12

Explain how the current U.S.tax system levies taxes on capital gains and earned interest.What does this mean for the costs of inflation?

Accepted Answer

The U.S.tax system levies taxes on nomin

Question 13

Older Americans living on a pension and therefore on a fixed income, tend to be made

Accepted Answer

A)  better off when prices rise. 
B)  better off when inflation rates rise. 
C)  worse off when prices rise. 
D)  worse off when prices fall. 
A)  better off when prices rise. 
B)  better off when inflation rates rise. 
C)  worse off when prices rise. 
D)  worse off when prices fall.

Question 14

Workers are generally in a better position to protect themselves from inflation in comparison to retired persons because workers' incomes

Accepted Answer

A)  are more likely to be fixed. 
B)  are more likely to be variable. 
C)  always rise during inflation. 
D)  are guaranteed by the federal government. 
A)  are more likely to be fixed. 
B)  are more likely to be variable. 
C)  always rise during inflation. 
D)  are guaranteed by the federal government.

Question 15

If the capital stock increases, then the economy can produce ____ output with the ____ amount of labor.

Accepted Answer

A)  same, same 
B)  less, same 
C)  more, same 
D)  less, less 
A)  same, same 
B)  less, same 
C)  more, same 
D)  less, less

Question 16

Technological change or the effects of automation cause

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 17

After a particular loan has been paid off, neither the borrower nor the lender has lost purchasing power.Therefore, it must be true that actual inflation was

Accepted Answer

A)  greater than expected inflation. 
B)  equal to expected inflation. 
C)  less than expected inflation. 
D)  greater than the nominal rate of interest. 
A)  greater than expected inflation. 
B)  equal to expected inflation. 
C)  less than expected inflation. 
D)  greater than the nominal rate of interest.

Question 18

Policy should create an environment in which the economy can expand its productive capacity rapidly, because that is the ultimate source of higher living standards.This task is the realm of

Accepted Answer

A)  growth policy. 
B)  stabilization policy. 
C)  labor policy. 
D)  inflation policy. 
A)  growth policy. 
B)  stabilization policy. 
C)  labor policy. 
D)  inflation policy.

Question 19

Last year your job at the university cafeteria paid you $9 an hour and the price of a music download was $1.00.This year your cafeteria job pays $9.90 per hour and download costs $1.10.You are clearly

Accepted Answer

A)  worse off because of inflation. 
B)  worse off because the download is now relatively more expensive. 
C)  better off because your wage rate went up. 
D)  better off because the download now costs less work. 
A)  worse off because of inflation. 
B)  worse off because the download is now relatively more expensive. 
C)  better off because your wage rate went up. 
D)  better off because the download now costs less work.

Question 20

As inflation rates increase, borrowing and lending contracts tend to

Accepted Answer

A)  increase in size. 
B)  decrease in size. 
C)  decrease in length of time. 
D)  increase in length of time. 
A)  increase in size. 
B)  decrease in size. 
C)  decrease in length of time. 
D)  increase in length of time.

Exam 23: The Goals of Macroeconomic Policy

In the contemporary United States, labor productivity has been growing at approximately

If you purchased shares of common stock in 1990 for $1,000 and sold them for $2,000 in 2001 you would be liable for taxes on

Economists oppose limiting economic growth possibilities because such limits would inevitably involve

The most likely group of the following that would be eligible for unemployment insurance benefits is

If both borrowers and lenders anticipate the rate of inflation correctly, then

Someone who is out of work because they are between jobs is experiencing

Paying into a pension fund while you are earning wages and salaries is equivalent to

Faster economic growth imposes an opportunity cost in the form of

Inflation is a serious problem because inflation causes real wages to decline.

The growth of the labor force and the growth of labor productivity help determine the rate of GDP growth.

The unemployment rate that many economists believe represents full employment is

Explain how the current U.S.tax system levies taxes on capital gains and earned interest.What does this mean for the costs of inflation?

Older Americans living on a pension and therefore on a fixed income, tend to be made

Workers are generally in a better position to protect themselves from inflation in comparison to retired persons because workers' incomes

If the capital stock increases, then the economy can produce ____ output with the ____ amount of labor.

Technological change or the effects of automation cause

After a particular loan has been paid off, neither the borrower nor the lender has lost purchasing power.Therefore, it must be true that actual inflation was

Policy should create an environment in which the economy can expand its productive capacity rapidly, because that is the ultimate source of higher living standards.This task is the realm of

Last year your job at the university cafeteria paid you $9 an hour and the price of a music download was $1.00.This year your cafeteria job pays $9.90 per hour and download costs $1.10.You are clearly

As inflation rates increase, borrowing and lending contracts tend to

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

Filters

If the capital stock increases, then the economy can produce output with the amount of labor.