Exam 22: The Goals of Macroeconomic Policy

Cyclical unemployment occurs when real GDP falls below potential GDP.

An increase in the capital stock has the same effect on the production function as an increase in

Which of the following does not cause "hidden" or "disguised" unemployment?

How is the unemployment rate calculated? Describe the three principal types of unemployment.

Cyrus just graduated from flight school. He received multiple offers, but is waiting to hear back from all the jobs he applied to before he makes a decision. Cyrus is experiencing

When nominal interest rates are held below inflation rates, then households will have an incentive to

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

The incentive to lend increases as the real rate of interest decreases.

Growth in potential GDP depends on

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

Technological change or the effects of automation cause

Which of the following countries has not experienced hyperinflation in the twentieth century?

As inflation rates increase, borrowing and lending contracts tend to

The costs of unemployment to an individual out of work are larger now than in the 1930s.

Frictional unemployment is a "necessary" cost of a dynamic economy.

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

Faster economic growth imposes an opportunity cost in the form of

If you as a lender want an increase in purchasing power of 4 percent from making a loan and you set the nominal interest rate at 9 percent, then your

As the unemployment rate rises,

The relationship between industrial capacity percentage and