Question 1

During periods of inflation:

Accepted Answer

A)  everyone's real income rises. 
B)  those people who have fixed incomes benefit. 
C)  those people whose nominal income rises faster than the general price level benefit. 
D)  those people who enter long-term wage agreements benefit. 
E)  those people who hold a lot of cash benefit. 
A)  everyone's real income rises. 
B)  those people who have fixed incomes benefit. 
C)  those people whose nominal income rises faster than the general price level benefit. 
D)  those people who enter long-term wage agreements benefit. 
E)  those people who hold a lot of cash benefit.

Question 2

The inflation rate is a:

Accepted Answer

A)  change in price level. 
B)  percentage increase in price level. 
C)  sustained increase in relative prices. 
D)  sustained increase in price level. 
E)  sudden increase in the weighted average of all prices. 
A)  change in price level. 
B)  percentage increase in price level. 
C)  sustained increase in relative prices. 
D)  sustained increase in price level. 
E)  sudden increase in the weighted average of all prices.

Question 3

Institutionalized adults are not considered to be a part of the labor force by the Bureau of Labor Statistics.

Accepted Answer

A) True 
 B)False

Question 4

The official dating of recessions in the United States is the responsibility of the:

Accepted Answer

A)  Bureau of Labor Statistics (BLS). 
B)  Internal Revenue Service (IRS). 
C)  Federal Reserve. 
D)  Congress. 
E)  National Bureau of Economic Research (NBER). 
A)  Bureau of Labor Statistics (BLS). 
B)  Internal Revenue Service (IRS). 
C)  Federal Reserve. 
D)  Congress. 
E)  National Bureau of Economic Research (NBER).

Question 5

Which of the following persons would be considered unemployed?

Accepted Answer

A)  A house wife 
B)  A 15-year-old looking for summer employment 
C)  A person who worked more than 20 hours in a family-owned business 
D)  A recent college graduate looking for her first job 
E)  A full-time student 
A)  A house wife 
B)  A 15-year-old looking for summer employment 
C)  A person who worked more than 20 hours in a family-owned business 
D)  A recent college graduate looking for her first job 
E)  A full-time student

Question 6

Looking at the labor statistics of the United States from 1951 to 2002, we find that the unemployment rate for women is higher than that for men in most years.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following factors may lead to a decline in the real value of money?

Accepted Answer

A)  Increase in the rate of interest 
B)  Decline in aggregate demand in the economy 
C)  Decrease in money supply 
D)  Increase in the average price level 
E)  Decrease in aggregate output 
A)  Increase in the rate of interest 
B)  Decline in aggregate demand in the economy 
C)  Decrease in money supply 
D)  Increase in the average price level 
E)  Decrease in aggregate output

Question 8

The table given below lists the average price level in a country for four consecutive years.
Table 7.2
 $\begin{array}{c}
\text { Price Data }\
\begin{array}{|c|c|}
\hline \text { Year } & \text { Average Price Level } \
\hline 1992 & 1.000 \
1993 & 1.039 \
1994 & 1.064 \
1995 & 1.093 \
\hline
\end{array}
\end{array}$
-Refer to Table 7.2. Between 1993 and 1994, the annual inflation rate was _____ percent.

Accepted Answer

A)  2.4 
B)  2.7 
C)  3.8 
D)  6.0 
E)  8.5 
A)  2.4 
B)  2.7 
C)  3.8 
D)  6.0 
E)  8.5

Question 9

Countries that have policies that encourage unemployment should be expected to have more unemployed workers.

Accepted Answer

A) True 
 B)False

Question 10

When there is an upward rise in the volume of economic activity, the economy is said to be in a recession.

Accepted Answer

A) True 
 B)False

Question 11

During a period of economic expansion, we would expect increasing levels of employment.

Accepted Answer

A) True 
 B)False

Question 12

Scenario 7.2
Suppose it has been recently predicted that in the year 2020, the total number of residents in the United States will be 315.5 million, the number of residents under 16 years of age will be 85 million, the number of institutionalized adults will be 17 million, the number of adults not actively looking for work will be 39 million, and the number of unemployed will be 21.5 million.
-Refer to the data in Scenario 7.2. What is the predicted unemployment rate in the United States for the year 2020?

Accepted Answer

A)  6.8 percent 
B)  8.3 percent 
C)  11.5 percent 
D)  12.3 percent 
E)  16.5 percent 
A)  6.8 percent 
B)  8.3 percent 
C)  11.5 percent 
D)  12.3 percent 
E)  16.5 percent

Question 13

According to the labor statistics of the United States, the _____ reported the highest unemployment rate between 1960 and 2008.

Accepted Answer

A)  Whites 
B)  Asians 
C)  African Americans 
D)  Hispanics 
E)  Latinos 
A)  Whites 
B)  Asians 
C)  African Americans 
D)  Hispanics 
E)  Latinos

Question 14

Which of the following statements about frictional unemployment is true?

Accepted Answer

A)  It can be eliminated only in a free society. 
B)  It is a long-term unemployment. 
C)  It does not exists in developed economies. 
D)  It is also called structural unemployment. 
E)  It arises when people elect to change jobs. 
A)  It can be eliminated only in a free society. 
B)  It is a long-term unemployment. 
C)  It does not exists in developed economies. 
D)  It is also called structural unemployment. 
E)  It arises when people elect to change jobs.

Question 15

The cost-of-living adjustments that are included in the wage contracts protect:

Accepted Answer

A)  businesses from unexpected inflation. 
B)  workers from unexpected inflation. 
C)  workers from expected inflation. 
D)  employers from unexpected inflation. 
E)  consumers from expected inflation. 
A)  businesses from unexpected inflation. 
B)  workers from unexpected inflation. 
C)  workers from expected inflation. 
D)  employers from unexpected inflation. 
E)  consumers from expected inflation.

Question 16

Which of the following led to an introduction of a new currency in Argentina in mid 1980s?

Accepted Answer

A)  An economic depression 
B)  A misguided political situation 
C)  Social instability 
D)  Hyperinflation 
E)  A prolonged deflation 
A)  An economic depression 
B)  A misguided political situation 
C)  Social instability 
D)  Hyperinflation 
E)  A prolonged deflation

Question 17

Which of the following countries did not experience hyperinflation in the past 20 years?

Accepted Answer

A)  South Korea 
B)  Nicaragua 
C)  Ukraine 
D)  Bolivia 
E)  Argentina 
A)  South Korea 
B)  Nicaragua 
C)  Ukraine 
D)  Bolivia 
E)  Argentina

Question 18

Indonesia experienced hyperinflation in the 1990s.

Accepted Answer

A) True 
 B)False

Question 19

When the real interest rate is less than zero, then:

Accepted Answer

A)  a creditor will gain purchasing power. 
B)  a creditor will just break even on his or her real loan return. 
C)  a creditor will lose purchasing power. 
D)  a creditor will benefit from inflation. 
E)  a creditor's purchasing power will not be affected, because the nominal interest rate is greater than zero. 
A)  a creditor will gain purchasing power. 
B)  a creditor will just break even on his or her real loan return. 
C)  a creditor will lose purchasing power. 
D)  a creditor will benefit from inflation. 
E)  a creditor's purchasing power will not be affected, because the nominal interest rate is greater than zero.

Question 20

Which of the following will be considered a lagging indicator of the business cycle?

Accepted Answer

A)  Money supply 
B)  New building permits 
C)  Unemployment duration 
D)  Unemployment claims 
E)  New plant and equipment orders 
A)  Money supply 
B)  New building permits 
C)  Unemployment duration 
D)  Unemployment claims 
E)  New plant and equipment orders

During periods of inflation:

The inflation rate is a:

Institutionalized adults are not considered to be a part of the labor force by the Bureau of Labor Statistics.

The official dating of recessions in the United States is the responsibility of the:

Which of the following persons would be considered unemployed?

Looking at the labor statistics of the United States from 1951 to 2002, we find that the unemployment rate for women is higher than that for men in most years.

Which of the following factors may lead to a decline in the real value of money?

The table given below lists the average price level in a country for four consecutive years. Table 7.2 Price Data Year Average Price Level 1992 1.000 1993 1.039 1994 1.064 1995 1.093 -Refer to Table 7.2. Between 1993 and 1994, the annual inflation rate was _____ percent.

Countries that have policies that encourage unemployment should be expected to have more unemployed workers.

When there is an upward rise in the volume of economic activity, the economy is said to be in a recession.

During a period of economic expansion, we would expect increasing levels of employment.

According to the labor statistics of the United States, the _____ reported the highest unemployment rate between 1960 and 2008.

Which of the following statements about frictional unemployment is true?

The cost-of-living adjustments that are included in the wage contracts protect:

Which of the following led to an introduction of a new currency in Argentina in mid 1980s?

Which of the following countries did not experience hyperinflation in the past 20 years?

Indonesia experienced hyperinflation in the 1990s.

When the real interest rate is less than zero, then:

Which of the following will be considered a lagging indicator of the business cycle?

Economics: the World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

National Income Accounting

An Introduction to the Foreign Exchange Market and the Balance of Payments

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

Exam 7: Unemployment and Inflation

During periods of inflation:

The inflation rate is a:

Institutionalized adults are not considered to be a part of the labor force by the Bureau of Labor Statistics.

The official dating of recessions in the United States is the responsibility of the:

Which of the following persons would be considered unemployed?

Looking at the labor statistics of the United States from 1951 to 2002, we find that the unemployment rate for women is higher than that for men in most years.

Which of the following factors may lead to a decline in the real value of money?

The table given below lists the average price level in a country for four consecutive years. Table 7.2 Price Data Year Average Price Level 1992 1.000 1993 1.039 1994 1.064 1995 1.093 -Refer to Table 7.2. Between 1993 and 1994, the annual inflation rate was _____ percent.

Countries that have policies that encourage unemployment should be expected to have more unemployed workers.

When there is an upward rise in the volume of economic activity, the economy is said to be in a recession.

During a period of economic expansion, we would expect increasing levels of employment.

According to the labor statistics of the United States, the _____ reported the highest unemployment rate between 1960 and 2008.

Which of the following statements about frictional unemployment is true?

The cost-of-living adjustments that are included in the wage contracts protect:

Which of the following led to an introduction of a new currency in Argentina in mid 1980s?

Which of the following countries did not experience hyperinflation in the past 20 years?

Indonesia experienced hyperinflation in the 1990s.

When the real interest rate is less than zero, then:

Which of the following will be considered a lagging indicator of the business cycle?

Economics: the World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

National Income Accounting

An Introduction to the Foreign Exchange Market and the Balance of Payments

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters