Question 1

Who among the following people will an economist consider underemployed?

Accepted Answer

A)  Someone who prefers to spend more time on leisure and less time on wage-earning activities 
B)  A person who is working part-time at wage-earning activities, but prefers a full-time employment 
C)  A rock star who voluntarily chooses to work part-time 
D)  Someone who is in prison and is willing to work from his cell 
E)  A gardener who hates plants but still does the job because he or she has no other skills 
A)  Someone who prefers to spend more time on leisure and less time on wage-earning activities 
B)  A person who is working part-time at wage-earning activities, but prefers a full-time employment 
C)  A rock star who voluntarily chooses to work part-time 
D)  Someone who is in prison and is willing to work from his cell 
E)  A gardener who hates plants but still does the job because he or she has no other skills

Question 2

Demand-pull inflation is caused:

Accepted Answer

A)  by increases in production costs. 
B)  by increases in tax rates by the government. 
C)  by trade unions' pressure for wage hike. 
D)  when spending increases in an economy producing at its maximum capacity. 
E)  when increases in the supply of goods are exactly offset by increases in spending. 
A)  by increases in production costs. 
B)  by increases in tax rates by the government. 
C)  by trade unions' pressure for wage hike. 
D)  when spending increases in an economy producing at its maximum capacity. 
E)  when increases in the supply of goods are exactly offset by increases in spending.

Question 3

The inflation rate is a:

Accepted Answer

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

Question 4

Suppose statistical surveys indicate that new orders for manufactured goods and new building permits for single-family homes are declining and that business inventories are rising. This implies economic activity is slowing down and the economy is potentially entering a recessionary period.

Accepted Answer

A) True 
 B)False

Question 5

If an economy operates on its production possibilities frontier, the natural unemployment rate must be:

Accepted Answer

A)  zero. 
B)  positive. 
C)  negative. 
D)  at 1 percent. 
E)  at 5 percent. 
A)  zero. 
B)  positive. 
C)  negative. 
D)  at 1 percent. 
E)  at 5 percent.

Question 6

Which of the following could contribute to cost-push inflation?

Accepted Answer

A)  Greater demand for exports 
B)  Lower income taxes 
C)  An increase in consumption demand 
D)  Higher government spending 
E)  Higher wage demands by trade unions 
A)  Greater demand for exports 
B)  Lower income taxes 
C)  An increase in consumption demand 
D)  Higher government spending 
E)  Higher wage demands by trade unions

Question 7

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 8

When the U.S. economy is at its full-employment level, the unemployment rate is not equal to zero because:

Accepted Answer

A)  cyclical unemployment is always present in a modern economy. 
B)  of the statistical discrepancy. 
C)  voluntary unemployment is always positive. 
D)  frictional and structural unemployment are always present in a modern economy. 
E)  there are always people who are too lazy to work. 
A)  cyclical unemployment is always present in a modern economy. 
B)  of the statistical discrepancy. 
C)  voluntary unemployment is always positive. 
D)  frictional and structural unemployment are always present in a modern economy. 
E)  there are always people who are too lazy to work.

Question 9

Assume that the U.S. labor force consists of 185 million workers and that 17.5 million are officially unemployed. Calculate the unemployment rate.

Accepted Answer

A)  11.4 percent 
B)  10.0 percent 
C)  9.5 percent 
D)  7.5 percent 
E)  10.8 percent 
A)  11.4 percent 
B)  10.0 percent 
C)  9.5 percent 
D)  7.5 percent 
E)  10.8 percent

Question 10

Which of the following refers to business cycles?

Accepted Answer

A)  Variations in the economy that are all equal in intensity 
B)  Seasonal variations in the economy that occur every year 
C)  Fluctuations in economic output that show a declining growth pattern over time 
D)  Periodic but irregular variations in economic activity 
E)  Fluctuations in the profits that businesses in an economy earn over a period of time 
A)  Variations in the economy that are all equal in intensity 
B)  Seasonal variations in the economy that occur every year 
C)  Fluctuations in economic output that show a declining growth pattern over time 
D)  Periodic but irregular variations in economic activity 
E)  Fluctuations in the profits that businesses in an economy earn over a period of time

Question 11

What does it mean if the purchasing power in 1950 was 4.15 relative to the 1982 base year?

Accepted Answer

A)  It took $4.15 in 1950 to buy what $1 bought in 1982. 
B)  The average price level in 1982 was five times as high as in 1950. 
C)  $4.15 in 1950 had the same nominal money value as $1 in 1982. 
D)  It took $4.15 in 1982 to buy what $1 bought in 1950. 
E)  Nominal prices have increased by more than 400 percent between 1950 and 1982, but the real value of money has not changed. 
A)  It took $4.15 in 1950 to buy what $1 bought in 1982. 
B)  The average price level in 1982 was five times as high as in 1950. 
C)  $4.15 in 1950 had the same nominal money value as $1 in 1982. 
D)  It took $4.15 in 1982 to buy what $1 bought in 1950. 
E)  Nominal prices have increased by more than 400 percent between 1950 and 1982, but the real value of money has not changed.

Question 12

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 13

Who among the following individuals is not an underemployed or a discouraged worker?

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 14

In a business cycle, a peak marks the end of an expansion and the beginning of a recession.

Accepted Answer

A) True 
 B)False

Question 15

How is recession defined by the National Bureau of Economic Research [NBER]?

Accepted Answer

A)  Two consecutive quarters of declining GDP 
B)  A significant decline in total output, income, employment, and trade for six months to one year 
C)  A dramatic decline in unemployment for less than six months 
D)  A sharp increase in money supply and the market rate of interest 
E)  A significant decline in stock prices over three consecutive quarters of a business year 
A)  Two consecutive quarters of declining GDP 
B)  A significant decline in total output, income, employment, and trade for six months to one year 
C)  A dramatic decline in unemployment for less than six months 
D)  A sharp increase in money supply and the market rate of interest 
E)  A significant decline in stock prices over three consecutive quarters of a business year

Question 16

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 17

Which of the following is most likely to occur during recession?

Accepted Answer

A)  Increase in wage rate 
B)  Decrease in potential real GDP 
C)  Increase in the market rate of interest 
D)  Decrease in the average price level 
E)  Decrease in the government transfer payments 
A)  Increase in wage rate 
B)  Decrease in potential real GDP 
C)  Increase in the market rate of interest 
D)  Decrease in the average price level 
E)  Decrease in the government transfer payments

Question 18

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 aged 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.

Question 19

The figure given below represents the business cycle of an economy.?Figure 7.1
  
-Refer to Figure 7.1. The movement from point A to point B in the figure is most likely to be associated with _____.

Accepted Answer

A)  negative inflation. 
B)  an increase in the aggregate demand for goods and services. 
C)  lagging economic productivity. 
D)  an increase in cyclical unemployment. 
E)  a downward trend in leading economic indicators. 
A)  negative inflation. 
B)  an increase in the aggregate demand for goods and services. 
C)  lagging economic productivity. 
D)  an increase in cyclical unemployment. 
E)  a downward trend in leading economic indicators.

Question 20

Which of the following is true about workers who experience structural unemployment?

Accepted Answer

A)  They quickly accept a much lower salary in a different industry. 
B)  They become unemployed due to the business cycle fluctuations. 
C)  They sometimes enter the pool of discouraged workers. 
D)  They tend to quit their job search very easily. 
E)  They usually have the necessary skills to maintain their level of income in another industry. 
A)  They quickly accept a much lower salary in a different industry. 
B)  They become unemployed due to the business cycle fluctuations. 
C)  They sometimes enter the pool of discouraged workers. 
D)  They tend to quit their job search very easily. 
E)  They usually have the necessary skills to maintain their level of income in another industry.

Who among the following people will an economist consider underemployed?

Demand-pull inflation is caused:

The inflation rate is a:

Suppose statistical surveys indicate that new orders for manufactured goods and new building permits for single-family homes are declining and that business inventories are rising. This implies economic activity is slowing down and the economy is potentially entering a recessionary period.

If an economy operates on its production possibilities frontier, the natural unemployment rate must be:

Which of the following could contribute to cost-push inflation?

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

When the U.S. economy is at its full-employment level, the unemployment rate is not equal to zero because:

Assume that the U.S. labor force consists of 185 million workers and that 17.5 million are officially unemployed. Calculate the unemployment rate.

Which of the following refers to business cycles?

What does it mean if the purchasing power in 1950 was 4.15 relative to the 1982 base year?

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.

Who among the following individuals is not an underemployed or a discouraged worker?

In a business cycle, a peak marks the end of an expansion and the beginning of a recession.

How is recession defined by the National Bureau of Economic Research [NBER]?

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

Which of the following is most likely to occur during recession?

The figure given below represents the business cycle of an economy.?Figure 7.1 -Refer to Figure 7.1. The movement from point A to point B in the figure is most likely to be associated with _____.

Which of the following is true about workers who experience structural unemployment?

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

The Market and Price System

The Aggregate Economy

National Income Accounting

An Introduction to the Foreign Exchapterange 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

Exchapterange Rates and Financial Links Between Countries

Filters

Exam 7: Unemployment and Inflation

Who among the following people will an economist consider underemployed?

Demand-pull inflation is caused:

The inflation rate is a:

Suppose statistical surveys indicate that new orders for manufactured goods and new building permits for single-family homes are declining and that business inventories are rising. This implies economic activity is slowing down and the economy is potentially entering a recessionary period.

If an economy operates on its production possibilities frontier, the natural unemployment rate must be:

Which of the following could contribute to cost-push inflation?

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

When the U.S. economy is at its full-employment level, the unemployment rate is not equal to zero because:

Assume that the U.S. labor force consists of 185 million workers and that 17.5 million are officially unemployed. Calculate the unemployment rate.

Which of the following refers to business cycles?

What does it mean if the purchasing power in 1950 was 4.15 relative to the 1982 base year?

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.

Who among the following individuals is not an underemployed or a discouraged worker?

In a business cycle, a peak marks the end of an expansion and the beginning of a recession.

How is recession defined by the National Bureau of Economic Research [NBER]?

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

Which of the following is most likely to occur during recession?

The figure given below represents the business cycle of an economy.?Figure 7.1 -Refer to Figure 7.1. The movement from point A to point B in the figure is most likely to be associated with _____.

Which of the following is true about workers who experience structural unemployment?

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

The Market and Price System

The Aggregate Economy

National Income Accounting

An Introduction to the Foreign Exchapterange 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

Exchapterange Rates and Financial Links Between Countries

Filters