Question 1

Deflation means a decrease in:

Accepted Answer

A) the rate of inflation. 
B) the prices of all products in the economy. 
C) homes, cars and basic resources. 
D) the general level of prices in the economy. 
A) the rate of inflation. 
B) the prices of all products in the economy. 
C) homes, cars and basic resources. 
D) the general level of prices in the economy.

Question 2

When the inflation rate rises,the purchasing power of nominal income:

Accepted Answer

A) remains unchanged. 
B) decreases. 
C) increases. 
D) changes by the inflation rate minus one. 
A) remains unchanged. 
B) decreases. 
C) increases. 
D) changes by the inflation rate minus one.

Question 3

Structural unemployment is unemployment caused by:

Accepted Answer

A) temporary changes in jobs. 
B) seasonal differences. 
C) the time required to match employers and workers. 
D) a mismatch between worker skills and employer requirements. 
A) temporary changes in jobs. 
B) seasonal differences. 
C) the time required to match employers and workers. 
D) a mismatch between worker skills and employer requirements.

Question 4

When OPEC raised the price of oil,it created:

Accepted Answer

A) demand-pull inflation. 
B) cost-push inflation. 
C) demand-push inflation. 
D) cost-pull inflation. 
E) cost-push deflation. 
A) demand-pull inflation. 
B) cost-push inflation. 
C) demand-push inflation. 
D) cost-pull inflation. 
E) cost-push deflation.

Question 5

The CPI measures:

Accepted Answer

A) changes in the prices of imported goods and services. 
B) changes in the prices of exported goods and services. 
C) changes in the production of imported goods and services. 
D) changes in the production of exported goods and services. 
A) changes in the prices of imported goods and services. 
B) changes in the prices of exported goods and services. 
C) changes in the production of imported goods and services. 
D) changes in the production of exported goods and services.

Question 6

Exhibit 13-1 Consumer price index
  
-As shown in Exhibit 13-1,the rate of inflation for Year 2 is:

Accepted Answer

A) 5 per cent. 
B) 10 per cent. 
C) 20 per cent. 
D) 25 per cent. 
A) 5 per cent. 
B) 10 per cent. 
C) 20 per cent. 
D) 25 per cent.

Question 7

The real interest rate is the annual percentage amount of money that is earned on a sum loaned or deposited in a bank.

Accepted Answer

A) True 
 B)False

Question 8

During periods of hyperinflation,which of the following is the most likely response of consumers?

Accepted Answer

A) Save as much as possible. 
B) Spend money as fast as possible. 
C) Invest as much as possible. 
D) Lend money. 
E) Work harder. 
A) Save as much as possible. 
B) Spend money as fast as possible. 
C) Invest as much as possible. 
D) Lend money. 
E) Work harder.

Question 9

Martin Malick lost his job when Holden closed down its local plant.He has been visiting the personnel offices of the other factories in the area,looking for a new job.He is:

Accepted Answer

A) a member of the civilian labour force who is employed. 
B) a member of the civilian labour force who is unemployed. 
C) a member of the civilian labour force who is underemployed. 
D) a discouraged worker who is not a member of the labour force. 
E) not a member of the labour force. 
A) a member of the civilian labour force who is employed. 
B) a member of the civilian labour force who is unemployed. 
C) a member of the civilian labour force who is underemployed. 
D) a discouraged worker who is not a member of the labour force. 
E) not a member of the labour force.

Question 10

Consider borrowers and lenders who agree to loans with fixed nominal interest rates.If inflation is higher than what the borrowers and lenders expected,then who benefits from lower real interest rates?

Accepted Answer

A) Only the borrowers benefit. 
B) Only the lenders benefit. 
C) Both borrowers and lenders benefit. 
D) Neither borrowers nor lenders benefit. 
A) Only the borrowers benefit. 
B) Only the lenders benefit. 
C) Both borrowers and lenders benefit. 
D) Neither borrowers nor lenders benefit.

Question 11

Last year the Jones family earned $40 000.This year their income is $42 000.In an economy with an inflation rate of 10 per cent,which of the following is correct?

Accepted Answer

A) The Jones' nominal income and real income have both fallen. 
B) The Jones' nominal income and real income have both risen. 
C) The Jones' nominal income has increased and their real income has fallen. 
D) The Jones' nominal income has decreased and their real income has risen. 
A) The Jones' nominal income and real income have both fallen. 
B) The Jones' nominal income and real income have both risen. 
C) The Jones' nominal income has increased and their real income has fallen. 
D) The Jones' nominal income has decreased and their real income has risen.

Question 12

The CPI is called a fixed-weight price index because:

Accepted Answer

A) people do not change their purchasing preferences over time. 
B) the composition of the market basket changes from one period to the next. 
C) the composition of the market basket remains unchanged from one period to the next. 
D) the CPI does not change over time. 
A) people do not change their purchasing preferences over time. 
B) the composition of the market basket changes from one period to the next. 
C) the composition of the market basket remains unchanged from one period to the next. 
D) the CPI does not change over time.

Question 13

People who are not currently employed,but say they want a job,are counted as unemployed only if they:

Accepted Answer

A) have previously held a job. 
B) are actively seeking employment. 
C) are willing to accept a reasonable offer. 
D) are between 16 and 65 years of age. 
E) are willing to accept any offer of employment. 
A) have previously held a job. 
B) are actively seeking employment. 
C) are willing to accept a reasonable offer. 
D) are between 16 and 65 years of age. 
E) are willing to accept any offer of employment.

Question 14

Full employment,which is always expected to occur,consists of the frictionally and cyclically unemployed

Accepted Answer

A) True 
 B)False

Question 15

Since the recession in the early 1990s,inflation in Australia has been:

Accepted Answer

A) volatile. 
B) low and stable. 
C) high but stable. 
D) zero. 
E) steadily rising. 
A) volatile. 
B) low and stable. 
C) high but stable. 
D) zero. 
E) steadily rising.

Question 16

An example of structural unemployment includes:

Accepted Answer

A) a textile worker who quits one job and waits for the new job to begin. 
B) the worker of the factory that has closed and he lacks the skills to obtain a new job. 
C) a computer programmer who becomes rich and leaves the labour force. 
D) a construction worker who was temporarily laid off due to the end of the construction contract. 
A) a textile worker who quits one job and waits for the new job to begin. 
B) the worker of the factory that has closed and he lacks the skills to obtain a new job. 
C) a computer programmer who becomes rich and leaves the labour force. 
D) a construction worker who was temporarily laid off due to the end of the construction contract.

Question 17

Frictional unemployment is:

Accepted Answer

A) long-term unemployment. 
B) a rare type of unemployment. 
C) the largest type of unemployment. 
D) short-term unemployment. 
A) long-term unemployment. 
B) a rare type of unemployment. 
C) the largest type of unemployment. 
D) short-term unemployment.

Question 18

The highest unemployment rate in the 20th century was:

Accepted Answer

A) over 5 per cent. 
B) over 15 per cent. 
C) over 25 per cent. 
D) less than 20 per cent. 
E) around 12 per cent. 
A) over 5 per cent. 
B) over 15 per cent. 
C) over 25 per cent. 
D) less than 20 per cent. 
E) around 12 per cent.

Question 19

The unemployment rate might be understating unemployment because of:

Accepted Answer

A) a variable interest rate. 
B) overexploited workers. 
C) underemployed workers. 
D) disinterested workers. 
A) a variable interest rate. 
B) overexploited workers. 
C) underemployed workers. 
D) disinterested workers.

Question 20

Which of the following is correct?

Accepted Answer

A) People whose nominal incomes rise slower than the rate of inflation gain purchasing power. 
B) Real income equals nominal income multiplied by the CPI as a decimal. 
C) The percentage change in real income equals the percentage change in nominal income plus the percentage change in CPI. 
D) The actual number of dollars received is called a nominal income. 
A) People whose nominal incomes rise slower than the rate of inflation gain purchasing power. 
B) Real income equals nominal income multiplied by the CPI as a decimal. 
C) The percentage change in real income equals the percentage change in nominal income plus the percentage change in CPI. 
D) The actual number of dollars received is called a nominal income.

Deflation means a decrease in:

When the inflation rate rises,the purchasing power of nominal income:

Structural unemployment is unemployment caused by:

When OPEC raised the price of oil,it created:

The CPI measures:

Exhibit 13-1 Consumer price index -As shown in Exhibit 13-1,the rate of inflation for Year 2 is:

The real interest rate is the annual percentage amount of money that is earned on a sum loaned or deposited in a bank.

During periods of hyperinflation,which of the following is the most likely response of consumers?

Martin Malick lost his job when Holden closed down its local plant.He has been visiting the personnel offices of the other factories in the area,looking for a new job.He is:

Consider borrowers and lenders who agree to loans with fixed nominal interest rates.If inflation is higher than what the borrowers and lenders expected,then who benefits from lower real interest rates?

Last year the Jones family earned $40 000.This year their income is $42 000.In an economy with an inflation rate of 10 per cent,which of the following is correct?

The CPI is called a fixed-weight price index because:

People who are not currently employed,but say they want a job,are counted as unemployed only if they:

Full employment,which is always expected to occur,consists of the frictionally and cyclically unemployed

Since the recession in the early 1990s,inflation in Australia has been:

An example of structural unemployment includes:

Frictional unemployment is:

The highest unemployment rate in the 20th century was:

The unemployment rate might be understating unemployment because of:

Which of the following is correct?

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters

Exam 13: Inflation and unemployment

Deflation means a decrease in:

When the inflation rate rises,the purchasing power of nominal income:

Structural unemployment is unemployment caused by:

When OPEC raised the price of oil,it created:

The CPI measures:

Exhibit 13-1 Consumer price index -As shown in Exhibit 13-1,the rate of inflation for Year 2 is:

The real interest rate is the annual percentage amount of money that is earned on a sum loaned or deposited in a bank.

During periods of hyperinflation,which of the following is the most likely response of consumers?

Martin Malick lost his job when Holden closed down its local plant.He has been visiting the personnel offices of the other factories in the area,looking for a new job.He is:

Consider borrowers and lenders who agree to loans with fixed nominal interest rates.If inflation is higher than what the borrowers and lenders expected,then who benefits from lower real interest rates?

Last year the Jones family earned $40 000.This year their income is $42 000.In an economy with an inflation rate of 10 per cent,which of the following is correct?

The CPI is called a fixed-weight price index because:

People who are not currently employed,but say they want a job,are counted as unemployed only if they:

Full employment,which is always expected to occur,consists of the frictionally and cyclically unemployed

Since the recession in the early 1990s,inflation in Australia has been:

An example of structural unemployment includes:

Frictional unemployment is:

The highest unemployment rate in the 20th century was:

The unemployment rate might be understating unemployment because of:

Which of the following is correct?

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters