Question 1

If the nominal interest rate is less than the rate of inflation, the real interest rate:

Accepted Answer

A)  will be less than zero. 
B)  will be equal to the nominal interest rate. 
C)  will equal zero. 
D)  will be greater than zero. 
E)  will be equal to the rate of inflation. 
A)  will be less than zero. 
B)  will be equal to the nominal interest rate. 
C)  will equal zero. 
D)  will be greater than zero. 
E)  will be equal to the rate of inflation.

Question 2

If the nominal interest rate is 6.3 percent and the inflation rate is 7.2 percent, then the real interest rate equals:

Accepted Answer

A)  - 13.5 percent. 
B)  + 13.5 percent. 
C)  - 0.9 percent. 
D)  -7.2 percent. 
E)  + 1.1 percent. 
A)  - 13.5 percent. 
B)  + 13.5 percent. 
C)  - 0.9 percent. 
D)  -7.2 percent. 
E)  + 1.1 percent.

Question 3

A recent economics graduate is looking for a position as an industrial economist. During the period this individual starts looking for a job and ultimately finds one, he may be classified as:

Accepted Answer

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

Question 4

The Bureau of Labor Statistics defines a person as unemployed if he or she does not:

Accepted Answer

A)  work full time. 
B)  have a job but is actively seeking one. 
C)  earn a wage above the minimum wage rate. 
D)  earn enough income to be above the poverty level. 
E)  work as much as he or she desires. 
A)  work full time. 
B)  have a job but is actively seeking one. 
C)  earn a wage above the minimum wage rate. 
D)  earn enough income to be above the poverty level. 
E)  work as much as he or she desires.

Question 5

Which of the following would tend to increase the natural unemployment rate?

Accepted Answer

A)  The creation of national unemployment offices to increase the information about job openings 
B)  Recessionary downturns in the economy that result in massive layoffs of auto workers 
C)  Sociological changes that encourage people to seek employment 
D)  The creation of government subsidies for workers who relocate into areas where new jobs can be found 
E)  Less government money made available as unemployment compensation 
A)  The creation of national unemployment offices to increase the information about job openings 
B)  Recessionary downturns in the economy that result in massive layoffs of auto workers 
C)  Sociological changes that encourage people to seek employment 
D)  The creation of government subsidies for workers who relocate into areas where new jobs can be found 
E)  Less government money made available as unemployment compensation

Question 6

Which of the following individuals is not among the underemployed or discouraged workers?

Accepted Answer

A)  A person employed part-time but willing to work full-time 
B)  A homeless person who has not found work for a year and has given up looking for jobs 
C)  A nuclear physicist unable to work because of illness 
D)  A gourmet French chef working part-time at Burger King 
E)  A 60-year-old professor who has stopped looking for a teaching job because schools consider him too old 
A)  A person employed part-time but willing to work full-time 
B)  A homeless person who has not found work for a year and has given up looking for jobs 
C)  A nuclear physicist unable to work because of illness 
D)  A gourmet French chef working part-time at Burger King 
E)  A 60-year-old professor who has stopped looking for a teaching job because schools consider him too old

Question 7

The official unemployment rate is:

Accepted Answer

A)  the number of unemployed people divided by the number of employed people. 
B)  the number of unemployed people divided by the total size of the population. 
C)  the number of unemployed people divided by the size of the non-institutionalized population. 
D)  the number of unemployed people divided by the size of the labor force. 
E)  the number of unemployed people divided by the size of the non-institutionalized population, age 16 or older. 
A)  the number of unemployed people divided by the number of employed people. 
B)  the number of unemployed people divided by the total size of the population. 
C)  the number of unemployed people divided by the size of the non-institutionalized population. 
D)  the number of unemployed people divided by the size of the labor force. 
E)  the number of unemployed people divided by the size of the non-institutionalized population, age 16 or older.

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. What was the purchasing power of the dollar in 1995 relative to the base year 1992?

Accepted Answer

A)  0.54 
B)  0.72 
C)  0.91 
D)  0.97 
E)  1.93 
A)  0.54 
B)  0.72 
C)  0.91 
D)  0.97 
E)  1.93

Question 9

The figure given below reports the GDP gap experienced by a country for four years in billions of dollars.
Figure 7.2
  
-Refer to Figure 7.2. The difference between potential and actual GDP consistently widens between points:

Accepted Answer

A)  A and B. 
B)  B and D. 
C)  A and D. 
D)  B and C. 
E)  C and D. 
A)  A and B. 
B)  B and D. 
C)  A and D. 
D)  B and C. 
E)  C and D.

Question 10

Scenario 7.1
Of 1,350 people surveyed, 318 are not working.
The status of those not working is as follows:
122 full-time students
29 discouraged workers
18 in long-term-care facilities
21 seeking employment and age 16 or older
50 retirees
63 under age 16
15 working in the underground economy and not looking for a "real" job
Eight of those working were under 16 years of age.
-Refer to Scenario 7.1. According to the data provided, the number of workers officially unemployed is:

Accepted Answer

A) 122. 
B) 36. 
C)  40. 
D)  21. 
E) 55. 
A) 122. 
B) 36. 
C)  40. 
D)  21. 
E) 55.

If the nominal interest rate is less than the rate of inflation, the real interest rate:

If the nominal interest rate is 6.3 percent and the inflation rate is 7.2 percent, then the real interest rate equals:

A recent economics graduate is looking for a position as an industrial economist. During the period this individual starts looking for a job and ultimately finds one, he may be classified as:

The Bureau of Labor Statistics defines a person as unemployed if he or she does not:

Which of the following would tend to increase the natural unemployment rate?

Which of the following individuals is not among the underemployed or discouraged workers?

The official unemployment rate is:

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. What was the purchasing power of the dollar in 1995 relative to the base year 1992?

The figure given below reports the GDP gap experienced by a country for four years in billions of dollars. Figure 7.2 -Refer to Figure 7.2. The difference between potential and actual GDP consistently widens between points:

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

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Exam 7: Unemployment and Inflation

If the nominal interest rate is less than the rate of inflation, the real interest rate:

If the nominal interest rate is 6.3 percent and the inflation rate is 7.2 percent, then the real interest rate equals:

A recent economics graduate is looking for a position as an industrial economist. During the period this individual starts looking for a job and ultimately finds one, he may be classified as:

The Bureau of Labor Statistics defines a person as unemployed if he or she does not:

Which of the following would tend to increase the natural unemployment rate?

Which of the following individuals is not among the underemployed or discouraged workers?

The official unemployment rate is:

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. What was the purchasing power of the dollar in 1995 relative to the base year 1992?

The figure given below reports the GDP gap experienced by a country for four years in billions of dollars. Figure 7.2 -Refer to Figure 7.2. The difference between potential and actual GDP consistently widens between points:

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