Question 1

The unemployment rate is equal to

Accepted Answer

A)  the number unemployed divided by the labor force. 
B)  the number unemployed divided by the population. 
C)  the number unemployed divided by the number employed. 
D)  the labor force divided by the population. 
A)  the number unemployed divided by the labor force. 
B)  the number unemployed divided by the population. 
C)  the number unemployed divided by the number employed. 
D)  the labor force divided by the population.

Question 2

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 3

The estimate of potential GDP would decrease if

Accepted Answer

A)  the rate of capital depreciation increased. 
B)  the labor force decreased. 
C)  the price level grew. 
D)  All of the above would increase potential GDP. 
A)  the rate of capital depreciation increased. 
B)  the labor force decreased. 
C)  the price level grew. 
D)  All of the above would increase potential GDP.

Question 4

Americans would probably be supportive of

Accepted Answer

A)  strict controls on hours of work. 
B)  limits on income potential. 
C)  mandatory work limits. 
D)  loose controls on economic activities. 
A)  strict controls on hours of work. 
B)  limits on income potential. 
C)  mandatory work limits. 
D)  loose controls on economic activities.

Question 5

Businesses will want to borrow more funds as the real rate of interest decreases.

Accepted Answer

A) True 
 B)False

Question 6

If ten years ago the price of a movie ticket was $5 and the average hourly wage was $10,and today the price of a movie ticket is $8 and the average hourly wage is $20,then

Accepted Answer

A)  movies are now relatively cheaper in terms of work hours. 
B)  movies are now relatively more expensive in terms of work hours. 
C)  the relative price of movies has remained constant. 
D)  workers now need to work longer hours to earn one movie ticket. 
A)  movies are now relatively cheaper in terms of work hours. 
B)  movies are now relatively more expensive in terms of work hours. 
C)  the relative price of movies has remained constant. 
D)  workers now need to work longer hours to earn one movie ticket.

Question 7

During periods of high inflation,such as the 1979-1980 period,the existence of usury laws may cause

Accepted Answer

A)  nominal rates of interest to be above real rates. 
B)  negative nominal rates of interest. 
C)  negative real rates of interest. 
D)  real rates of interest to be above nominal rates. 
A)  nominal rates of interest to be above real rates. 
B)  negative nominal rates of interest. 
C)  negative real rates of interest. 
D)  real rates of interest to be above nominal rates.

Question 8

Richard loses his job at the railroad due to a downturn in general business conditions.He is experiencing

Accepted Answer

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

Question 9

Given the labor force,either more capital or better technology will shift the production function downward.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following scenarios best illustrates the concept of cyclical unemployment?

Accepted Answer

A)  Grace loses her job because of new automated machinery. 
B)  Sean quits his job to look for work that is more fun. 
C)  Ellen quits looking for work because she doesn't think she can find a suitable job. 
D)  Marian loses her job because of a recession. 
A)  Grace loses her job because of new automated machinery. 
B)  Sean quits his job to look for work that is more fun. 
C)  Ellen quits looking for work because she doesn't think she can find a suitable job. 
D)  Marian loses her job because of a recession.

Question 11

Low inflation rates tend to accelerate into higher and higher rates of inflation.

Accepted Answer

A) True 
 B)False

Question 12

The growth rate of potential GDP depends on

Accepted Answer

A)  the rate of technical progress. 
B)  the growth rate of the capital stock. 
C)  the growth rate of the labor force. 
D)  all of the above. 
A)  the rate of technical progress. 
B)  the growth rate of the capital stock. 
C)  the growth rate of the labor force. 
D)  all of the above.

Question 13

The unemployment rate for married men is usually higher than the rate for teenagers.

Accepted Answer

A) True 
 B)False

Question 14

During inflationary periods

Accepted Answer

A)  all prices rise at the rate of inflation. 
B)  real wages must necessarily decline. 
C)  some prices may fall. 
D)  relative prices do not change. 
A)  all prices rise at the rate of inflation. 
B)  real wages must necessarily decline. 
C)  some prices may fall. 
D)  relative prices do not change.

Question 15

Inflation affects borrowers and lenders differently.After signing a contract with a fixed nominal interest rate,it can be expected that

Accepted Answer

A)  borrowers will hope that prices fall. 
B)  lenders will hope that prices rise. 
C)  lenders will hope that the purchasing power of money will fall. 
D)  borrowers will hope that prices rise. 
A)  borrowers will hope that prices fall. 
B)  lenders will hope that prices rise. 
C)  lenders will hope that the purchasing power of money will fall. 
D)  borrowers will hope that prices rise.

Question 16

The amount of goods and services the economy could produce if the labor force is fully employed is called

Accepted Answer

A)  nominal GDP. 
B)  real GDP. 
C)  actual GDP. 
D)  potential GDP. 
A)  nominal GDP. 
B)  real GDP. 
C)  actual GDP. 
D)  potential GDP.

Question 17

If the labor force grows faster than the number employed,the

Accepted Answer

A)  unemployment rate will fall. 
B)  unemployment rate will rise. 
C)  labor force rate will rise. 
D)  employment rate will rise. 
A)  unemployment rate will fall. 
B)  unemployment rate will rise. 
C)  labor force rate will rise. 
D)  employment rate will rise.

Question 18

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 19

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 20

When various firms fail because their output is not demanded by society,workers may suffer

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.

The unemployment rate is equal to

During inflationary periods

The estimate of potential GDP would decrease if

Americans would probably be supportive of

Businesses will want to borrow more funds as the real rate of interest decreases.

If ten years ago the price of a movie ticket was $5 and the average hourly wage was $10,and today the price of a movie ticket is $8 and the average hourly wage is $20,then

During periods of high inflation,such as the 1979-1980 period,the existence of usury laws may cause

Richard loses his job at the railroad due to a downturn in general business conditions.He is experiencing

Given the labor force,either more capital or better technology will shift the production function downward.

Which of the following scenarios best illustrates the concept of cyclical unemployment?

Low inflation rates tend to accelerate into higher and higher rates of inflation.

The growth rate of potential GDP depends on

The unemployment rate for married men is usually higher than the rate for teenagers.

During inflationary periods

Inflation affects borrowers and lenders differently.After signing a contract with a fixed nominal interest rate,it can be expected that

The amount of goods and services the economy could produce if the labor force is fully employed is called

If the labor force grows faster than the number employed,the

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

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

When various firms fail because their output is not demanded by society,workers may suffer

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

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Exam 6: The Goals of Macroeconomic Policy

The unemployment rate is equal to

During inflationary periods

The estimate of potential GDP would decrease if

Americans would probably be supportive of

Businesses will want to borrow more funds as the real rate of interest decreases.

If ten years ago the price of a movie ticket was $5 and the average hourly wage was $10,and today the price of a movie ticket is $8 and the average hourly wage is $20,then

During periods of high inflation,such as the 1979-1980 period,the existence of usury laws may cause

Richard loses his job at the railroad due to a downturn in general business conditions.He is experiencing

Given the labor force,either more capital or better technology will shift the production function downward.

Which of the following scenarios best illustrates the concept of cyclical unemployment?

Low inflation rates tend to accelerate into higher and higher rates of inflation.

The growth rate of potential GDP depends on

The unemployment rate for married men is usually higher than the rate for teenagers.

During inflationary periods

Inflation affects borrowers and lenders differently.After signing a contract with a fixed nominal interest rate,it can be expected that

The amount of goods and services the economy could produce if the labor force is fully employed is called

If the labor force grows faster than the number employed,the

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

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

When various firms fail because their output is not demanded by society,workers may suffer

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

Filters