Question 1

According to the U.S. Bureau of Labor Statistics, the term "employed" includes all full time workers and part-time workers.

Accepted Answer

A) True 
 B)False

Question 2

Labor productivity is defined as

Accepted Answer

A)  the amount of output a typical worker turns out in an hour of work. 
B)  the amount of output the best worker turns out in a day of work. 
C)  the amount of output improvement in a year of work. 
D)  the amount of average output improvement for a team in a year of work. 
A)  the amount of output a typical worker turns out in an hour of work. 
B)  the amount of output the best worker turns out in a day of work. 
C)  the amount of output improvement in a year of work. 
D)  the amount of average output improvement for a team in a year of work.

Question 3

Unemployment insurance cannot eliminate the national costs of lost output due to unemployed labor.

Accepted Answer

A) True 
 B)False

Question 4

The major impact unemployment insurance has on the U.S. economy is that it

Accepted Answer

A)  incentivizes people to work. 
B)  spreads the cost of unemployment. 
C)  eliminates the social cost of job loss. 
D)  prevents the emotional impact of job loss. 
A)  incentivizes people to work. 
B)  spreads the cost of unemployment. 
C)  eliminates the social cost of job loss. 
D)  prevents the emotional impact of job loss.

Question 5

Which of the following groups would have the lowest unemployment rates?

Accepted Answer

A)  High-school dropouts 
B)  Married men 
C)  Nonwhite teenagers 
D)  Nonwhite women 
A)  High-school dropouts 
B)  Married men 
C)  Nonwhite teenagers 
D)  Nonwhite women

Question 6

Over the past few decades, nominal interest rates have been higher than real rates of interest. This means that

Accepted Answer

A)  lenders must have expected inflation. 
B)  borrowers must have expected deflation. 
C)  lenders must have expected prices to fall. 
D)  borrowers must have expected prices to fall. 
A)  lenders must have expected inflation. 
B)  borrowers must have expected deflation. 
C)  lenders must have expected prices to fall. 
D)  borrowers must have expected prices to fall.

Question 7

The shortfall between actual real GDP and potential GDP

Accepted Answer

A)  decreases as the unemployment rate rises. 
B)  increases as the unemployment rate rises. 
C)  increases as the employment rate rises. 
D)  decreases as the labor force increases. 
A)  decreases as the unemployment rate rises. 
B)  increases as the unemployment rate rises. 
C)  increases as the employment rate rises. 
D)  decreases as the labor force increases.

Question 8

If prices rise, then persons living on fixed incomes will

Accepted Answer

A)  see their real incomes rising. 
B)  see the purchasing power of their dollars go further. 
C)  need to spend more to maintain their standard of living. 
D)  see the value of their savings accounts increase. 
A)  see their real incomes rising. 
B)  see the purchasing power of their dollars go further. 
C)  need to spend more to maintain their standard of living. 
D)  see the value of their savings accounts increase.

Question 9

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 10

If actual inflation is greater than the expected rate of inflation, then probably

Accepted Answer

A)  the borrowers are made better off than lenders. 
B)  the borrowers are made worse off than lenders. 
C)  creditors gain at the expense of borrowers. 
D)  savings accounts have increased in real terms. 
A)  the borrowers are made better off than lenders. 
B)  the borrowers are made worse off than lenders. 
C)  creditors gain at the expense of borrowers. 
D)  savings accounts have increased in real terms.

Question 11

Unemployment insurance benefits the macroeconomy by supporting purchasing power.

Accepted Answer

A) True 
 B)False

Question 12

During inflationary periods,

Accepted Answer

A)  the real value of money rises. 
B)  the real value of money remains constant. 
C)  the real value of money falls. 
D)  the purchasing power of money rises. 
A)  the real value of money rises. 
B)  the real value of money remains constant. 
C)  the real value of money falls. 
D)  the purchasing power of money rises.

Question 13

Are there key differences between an increase in the capital stock and an improvement in the level of technology?

Accepted Answer

There is no significant difference to an

Question 14

Someone who is out of work because he or she is 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 15

is caused by drops in total production.

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 16

The most important determinant of the decisions to lend or borrow is the real rate of interest.

Accepted Answer

A) True 
 B)False

Question 17

The economic benefits of owning a home are greater when home prices are

Accepted Answer

A)  falling and interest rates are high. 
B)  rising and interest rates are low. 
C)  rising and interest rates are high. 
D)  falling and interest rates are low. 
A)  falling and interest rates are high. 
B)  rising and interest rates are low. 
C)  rising and interest rates are high. 
D)  falling and interest rates are low.

Question 18

Some economists believe that one of the following improvements in the tax code could lead to more technological progress.

Accepted Answer

A)  A tax on nominal rather than real capital gains 
B)  A tax on real rather than nominal capital gains 
C)  A tax on capital rather than labor 
D)  investment A tax on labor rather than capital 
A)  A tax on nominal rather than real capital gains 
B)  A tax on real rather than nominal capital gains 
C)  A tax on capital rather than labor 
D)  investment A tax on labor rather than capital

Question 19

Persons who have given up looking for work are classified as

Accepted Answer

A)  unemployed. 
B)  discouraged workers. 
C)  in the labor force. 
D)  temporarily unemployed. 
A)  unemployed. 
B)  discouraged workers. 
C)  in the labor force. 
D)  temporarily unemployed.

Question 20

Economists and psychologists are often on opposite sides of the economic growth debate. The nature of the debate is such that

Accepted Answer

A)  economists emphasize the benefits of growth to finance valuable programs, and psychologists question whether more goods make people happier. 
B)  economists emphasize that more money means more income for the government, and psychologists believe poorer people are happier. 
C)  economists believe that economic growth imposes no serious costs on the economy, and psychologists question the statistical reliability of GDP numbers. 
D)  economists stress the importance of money relative to leisure, and psychologists stress the importance of an unstructured life. 
A)  economists emphasize the benefits of growth to finance valuable programs, and psychologists question whether more goods make people happier. 
B)  economists emphasize that more money means more income for the government, and psychologists believe poorer people are happier. 
C)  economists believe that economic growth imposes no serious costs on the economy, and psychologists question the statistical reliability of GDP numbers. 
D)  economists stress the importance of money relative to leisure, and psychologists stress the importance of an unstructured life.

Exam 22: The Goals of Macroeconomic Policy

According to the U.S. Bureau of Labor Statistics, the term "employed" includes all full time workers and part-time workers.

Labor productivity is defined as

Unemployment insurance cannot eliminate the national costs of lost output due to unemployed labor.

The major impact unemployment insurance has on the U.S. economy is that it

Which of the following groups would have the lowest unemployment rates?

Over the past few decades, nominal interest rates have been higher than real rates of interest. This means that

The shortfall between actual real GDP and potential GDP

If prices rise, then persons living on fixed incomes will

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

If actual inflation is greater than the expected rate of inflation, then probably

Unemployment insurance benefits the macroeconomy by supporting purchasing power.

During inflationary periods,

Are there key differences between an increase in the capital stock and an improvement in the level of technology?

Someone who is out of work because he or she is between jobs is experiencing

is caused by drops in total production.

The most important determinant of the decisions to lend or borrow is the real rate of interest.

The economic benefits of owning a home are greater when home prices are

Some economists believe that one of the following improvements in the tax code could lead to more technological progress.

Persons who have given up looking for work are classified as

Economists and psychologists are often on opposite sides of the economic growth debate. The nature of the debate is such that

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

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

Contemporary Issues in the Us Economy

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