Question 1

Which of the following is true about inflation?

Accepted Answer

A)  Inflation promotes social harmony by uniting people against the government. 
B)  Inflation is more damaging if it is unanticipated. 
C)  Accurate anticipation of inflation is possible for everyone who is well informed about economic events. 
D)  Those who lend money at a rate above the rate of inflation suffer economic losses. 
E)  If people accurately anticipate inflation, their actions will prevent it. 
A)  Inflation promotes social harmony by uniting people against the government. 
B)  Inflation is more damaging if it is unanticipated. 
C)  Accurate anticipation of inflation is possible for everyone who is well informed about economic events. 
D)  Those who lend money at a rate above the rate of inflation suffer economic losses. 
E)  If people accurately anticipate inflation, their actions will prevent it.

Question 2

Unanticipated inflation penalizes _____

Accepted Answer

A)  those who are saving. 
B)  those who are borrowing. 
C)  governments. 
D)  those who are in high-growth industries where wages are growing faster than prices. 
E)  those who can't find jobs at any wage rate. 
A)  those who are saving. 
B)  those who are borrowing. 
C)  governments. 
D)  those who are in high-growth industries where wages are growing faster than prices. 
E)  those who can't find jobs at any wage rate.

Question 3

If the CPI is 200, then the price level has _____ since the base year.

Accepted Answer

A)  doubled 
B)  quadrupled 
C)  tripled 
D)  increased five times 
E)  increased six times 
A)  doubled 
B)  quadrupled 
C)  tripled 
D)  increased five times 
E)  increased six times

Question 4

The real interest rate can be negative.

Accepted Answer

A) True 
 B)False

Question 5

If the economy is experiencing a sustained increase in the price level, it is called:

Accepted Answer

A)  deflation 
B)  inflation 
C)  hyperinflation 
D)  disinflation 
E)  growth 
A)  deflation 
B)  inflation 
C)  hyperinflation 
D)  disinflation 
E)  growth

Question 6

In 2004, Noah lost his job as a shipbuilder. His shipyard never reopened, and his very specialized skills as a shipbuilder were no longer in demand. Noah's unemployment is best classified as _____

Accepted Answer

A)  cyclical. 
B)  structural. 
C)  seasonal. 
D)  frictional. 
E)  voluntary. 
A)  cyclical. 
B)  structural. 
C)  seasonal. 
D)  frictional. 
E)  voluntary.

Question 7

Which of the following people is least likely to be hurt by inflation?

Accepted Answer

A)  a salesperson who works on commission 
B)  a retired couple living on a pension 
C)  an individual who enters into a fixed-wage contract for the next three years 
D)  an individual who agrees to lend money at a fixed rate of interest for the next three years 
E)  an individual working at the minimum wage, which seldom changes 
A)  a salesperson who works on commission 
B)  a retired couple living on a pension 
C)  an individual who enters into a fixed-wage contract for the next three years 
D)  an individual who agrees to lend money at a fixed rate of interest for the next three years 
E)  an individual working at the minimum wage, which seldom changes

Question 8

The labor force participation rate for men in the United States has _____

Accepted Answer

A)  stayed the same over the last 30 years. 
B)  increased significantly since the 1950s. 
C)  decreased significantly since the 1950s. 
D)  fluctuated substantially both upward and downward since the 1950s. 
E)  increased only very slightly since the 1950s. 
A)  stayed the same over the last 30 years. 
B)  increased significantly since the 1950s. 
C)  decreased significantly since the 1950s. 
D)  fluctuated substantially both upward and downward since the 1950s. 
E)  increased only very slightly since the 1950s.

Question 9

Which of the following is true of the labor force participation rates in the United States since the 1950s?

Accepted Answer

A)  The rates for both men and women have risen. 
B)  The rate for women has fallen; the rate for men has risen. 
C)  The rate for men has fallen; the rate for women has increased. 
D)  The rates for both men and women have fallen. 
E)  The rates for both men and women have remained fairly constant. 
A)  The rates for both men and women have risen. 
B)  The rate for women has fallen; the rate for men has risen. 
C)  The rate for men has fallen; the rate for women has increased. 
D)  The rates for both men and women have fallen. 
E)  The rates for both men and women have remained fairly constant.

Question 10

During periods of high inflation, people want to hold as much money as possible.

Accepted Answer

A) True 
 B)False

Question 11

The labor force participation rate for women in the United States has _____

Accepted Answer

A)  stayed the same over the last 30 years. 
B)  increased significantly since the 1950s. 
C)  decreased significantly since the 1950s. 
D)  fluctuated substantially both upward and downward since the 1950s. 
E)  increased only very slightly since the 1950s. 
A)  stayed the same over the last 30 years. 
B)  increased significantly since the 1950s. 
C)  decreased significantly since the 1950s. 
D)  fluctuated substantially both upward and downward since the 1950s. 
E)  increased only very slightly since the 1950s.

Question 12

The inflation experienced in the United States during the late 1960s as a result of the spending on the Vietnam War is an example of _____

Accepted Answer

A)  hyperinflation. 
B)  demand-pull inflation. 
C)  disinflation. 
D)  cost-push inflation. 
E)  cyclical inflation. 
A)  hyperinflation. 
B)  demand-pull inflation. 
C)  disinflation. 
D)  cost-push inflation. 
E)  cyclical inflation.

Question 13

_____ is an increase in wages or transfer payments tied to increases in the price level.

Accepted Answer

A)  U-6 
B)  COLA 
C)  NBER 
D)  CPI 
E)  GDP 
A)  U-6 
B)  COLA 
C)  NBER 
D)  CPI 
E)  GDP

Question 14

Which of the following people would be counted as employed?

Accepted Answer

A)  a retired naval officer 
B)  a high school student 
C)  a stay-at-home father 
D)  a teenager who has given up looking for work after a year of trying 
E)  a ski instructor who is working during the summer 
A)  a retired naval officer 
B)  a high school student 
C)  a stay-at-home father 
D)  a teenager who has given up looking for work after a year of trying 
E)  a ski instructor who is working during the summer

Question 15

Government fiscal policies that attempt to stimulate aggregate demand are often aimed at reducing cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 16

Juanita worked for a defense contractor in the United States. During the 2008 recession, the government cut spending and Juanita and ninety-nine others were laid off. In such a case, the unemployment Juanita is experiencing is _____.

Accepted Answer

A)  cyclical 
B)  structural 
C)  seasonal 
D)  frictional 
E)  voluntary 
A)  cyclical 
B)  structural 
C)  seasonal 
D)  frictional 
E)  voluntary

Question 17

Table 7.1
 $$\begin{array}{l}
\text { Table } 7.1\
\begin{array} { | c | c | c | c | c | c | } 
\hline { \text { Not in Labor Force } } & &{ \text { Unemployed } } && { \text { Employed } } \
\hline \text { Male } & \text { Female } & \text { Male } & \text { Female } & \text { Male } & \text { Female } \
\hline 10 \text { million } & 20 \text { million } & 2 \text { million } & 2 \text { million } & 30 \text { million } & 20 \text { million } \
\hline
\end{array}
\end{array}$$
-Refer to Table 7.1, which shows data for males and females over 16 years old in the island of Palma. What is the adult female labor force?

Accepted Answer

A)  22 million 
B)  32 million 
C)  42 million 
D)  52 million 
E)  94 million 
A)  22 million 
B)  32 million 
C)  42 million 
D)  52 million 
E)  94 million

Question 18

During periods of inflation, the real value of a given amount of nominal dollars decreases.

Accepted Answer

A) True 
 B)False

Question 19

An increase in a person's nominal wage necessarily _____

Accepted Answer

A)  means higher purchasing power. 
B)  means lower real wage. 
C)  means higher personal disposable income. 
D)  means higher nominal wage. 
E)  is not important until it is adjusted for inflation. 
A)  means higher purchasing power. 
B)  means lower real wage. 
C)  means higher personal disposable income. 
D)  means higher nominal wage. 
E)  is not important until it is adjusted for inflation.

Which of the following is true about inflation?

Unanticipated inflation penalizes _____

If the CPI is 200, then the price level has _____ since the base year.

The real interest rate can be negative.

If the economy is experiencing a sustained increase in the price level, it is called:

In 2004, Noah lost his job as a shipbuilder. His shipyard never reopened, and his very specialized skills as a shipbuilder were no longer in demand. Noah's unemployment is best classified as _____

Which of the following people is least likely to be hurt by inflation?

The labor force participation rate for men in the United States has _____

Which of the following is true of the labor force participation rates in the United States since the 1950s?

During periods of high inflation, people want to hold as much money as possible.

The labor force participation rate for women in the United States has _____

The inflation experienced in the United States during the late 1960s as a result of the spending on the Vietnam War is an example of _____

_____ is an increase in wages or transfer payments tied to increases in the price level.

Which of the following people would be counted as employed?

Government fiscal policies that attempt to stimulate aggregate demand are often aimed at reducing cyclical unemployment.

Juanita worked for a defense contractor in the United States. During the 2008 recession, the government cut spending and Juanita and ninety-nine others were laid off. In such a case, the unemployment Juanita is experiencing is _____.

Table 7.1 Table 7.1 Not in Labor Force Unemployed Employed Male Female Male Female Male Female 10 million 20 million 2 million 2 million 30 million 20 million -Refer to Table 7.1, which shows data for males and females over 16 years old in the island of Palma. What is the adult female labor force?

During periods of inflation, the real value of a given amount of nominal dollars decreases.

An increase in a person's nominal wage necessarily _____

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

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Exam 7: Unemployment and Inflation.

Which of the following is true about inflation?

Unanticipated inflation penalizes _____

If the CPI is 200, then the price level has _____ since the base year.

The real interest rate can be negative.

If the economy is experiencing a sustained increase in the price level, it is called:

In 2004, Noah lost his job as a shipbuilder. His shipyard never reopened, and his very specialized skills as a shipbuilder were no longer in demand. Noah's unemployment is best classified as _____

Which of the following people is least likely to be hurt by inflation?

The labor force participation rate for men in the United States has _____

Which of the following is true of the labor force participation rates in the United States since the 1950s?

During periods of high inflation, people want to hold as much money as possible.

The labor force participation rate for women in the United States has _____

The inflation experienced in the United States during the late 1960s as a result of the spending on the Vietnam War is an example of _____

_____ is an increase in wages or transfer payments tied to increases in the price level.

Which of the following people would be counted as employed?

Government fiscal policies that attempt to stimulate aggregate demand are often aimed at reducing cyclical unemployment.

Juanita worked for a defense contractor in the United States. During the 2008 recession, the government cut spending and Juanita and ninety-nine others were laid off. In such a case, the unemployment Juanita is experiencing is _____.

Table 7.1 Table 7.1 Not in Labor Force Unemployed Employed Male Female Male Female Male Female 10 million 20 million 2 million 2 million 30 million 20 million -Refer to Table 7.1, which shows data for males and females over 16 years old in the island of Palma. What is the adult female labor force?

During periods of inflation, the real value of a given amount of nominal dollars decreases.

An increase in a person's nominal wage necessarily _____

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters