Question 1

The view that union wage demands may be a source of inflation would be best associated with cost-push inflation.

Accepted Answer

A) True 
 B)False

Question 2

Discouraged workers are included in labor force figures, but not in unemployment figures.

Accepted Answer

A) True 
 B)False

Question 3

Not counting _____ as unemployed understates unemployment.

Accepted Answer

A)  children 
B)  retired persons 
C)  students 
D)  people who do not want to work 
E)  discouraged workers 
A)  children 
B)  retired persons 
C)  students 
D)  people who do not want to work 
E)  discouraged workers

Question 4

During periods when the inflation rate fluctuates widely, _____

Accepted Answer

A)  the nominal interest rate and the real interest rate are identical. 
B)  all money prices rise at the same rate, causing relative prices to increase. 
C)  suppliers link the selling prices of their goods to the overall inflation rate. 
D)  uncertainty about changes in relative prices causes a decrease in economic efficiency. 
E)  all money prices increase at the same rate, leaving relative prices constant. 
A)  the nominal interest rate and the real interest rate are identical. 
B)  all money prices rise at the same rate, causing relative prices to increase. 
C)  suppliers link the selling prices of their goods to the overall inflation rate. 
D)  uncertainty about changes in relative prices causes a decrease in economic efficiency. 
E)  all money prices increase at the same rate, leaving relative prices constant.

Question 5

"Discouraged workers" comprise the percentage of those in the _____

Accepted Answer

A)  labor force who are employed and are seeking employment. 
B)  labor force who have chosen early retirement because they dislike their work. 
C)  adult population who want to be employed but have given up the search for a job. 
D)  labor force who are looking for a job but cannot find one. 
E)  adult population who are in the labor force. 
A)  labor force who are employed and are seeking employment. 
B)  labor force who have chosen early retirement because they dislike their work. 
C)  adult population who want to be employed but have given up the search for a job. 
D)  labor force who are looking for a job but cannot find one. 
E)  adult population who are in the labor force.

Question 6

Inflation is defined as a sustained increase in an economy's price level.

Accepted Answer

A) True 
 B)False

Question 7

Suppose there is a 3 percent increase in the nominal wages of workers in an economy. The annual rate of inflation in the economy is about 6 percent. Which of the following is true?

Accepted Answer

A)  Real wages would fall by about 3 percent. 
B)  Real wages would increase by about 20 percent. 
C)  Real wages would fall by about 25 percent. 
D)  Real wages would increase by about 50 percent. 
E)  Real wages would increase by about 10 percent. 
A)  Real wages would fall by about 3 percent. 
B)  Real wages would increase by about 20 percent. 
C)  Real wages would fall by about 25 percent. 
D)  Real wages would increase by about 50 percent. 
E)  Real wages would increase by about 10 percent.

Question 8

Suppose an economy had an inflation rate of 7 percent last year and decreased to 6 percent this year. This means that the economy is _____

Accepted Answer

A)  suffering from hyperinflation. 
B)  experiencing deflation. 
C)  experiencing disinflation. 
D)  experiencing a wage-price spiral. 
E)  experiencing a decrease in real wage. 
A)  suffering from hyperinflation. 
B)  experiencing deflation. 
C)  experiencing disinflation. 
D)  experiencing a wage-price spiral. 
E)  experiencing a decrease in real wage.

Question 9

Which of the following people would be classified as unemployed?

Accepted Answer

A)  a person who wants a job as a fashion model but cannot find work in that field 
B)  someone who quits a part-time job to attend school full time 
C)  someone who does not have a job and gives up looking for one 
D)  a person who works at a job that underutilizes his or her skills 
E)  a person who works part-time and would rather work full time 
A)  a person who wants a job as a fashion model but cannot find work in that field 
B)  someone who quits a part-time job to attend school full time 
C)  someone who does not have a job and gives up looking for one 
D)  a person who works at a job that underutilizes his or her skills 
E)  a person who works part-time and would rather work full time

Question 10

Inflation _____

Accepted Answer

A)  increases the value of the dollar compared to the value of goods. 
B)  maintains the purchasing power of the dollar over the long term. 
C)  erodes confidence in the value of the dollar over the long term. 
D)  raises everyone's standard of living. 
E)  encourages the hoarding of banknotes. 
A)  increases the value of the dollar compared to the value of goods. 
B)  maintains the purchasing power of the dollar over the long term. 
C)  erodes confidence in the value of the dollar over the long term. 
D)  raises everyone's standard of living. 
E)  encourages the hoarding of banknotes.

Question 11

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. How many adults are unemployed?

Accepted Answer

A)  2 million 
B)  4 million 
C)  17 million 
D)  22 million 
E)  50 million 
A)  2 million 
B)  4 million 
C)  17 million 
D)  22 million 
E)  50 million

Question 12

An increase in the interest rate will increase the demand for loanable funds.

Accepted Answer

A) True 
 B)False

Question 13

U.S. firms involved in international trade have to _____

Accepted Answer

A)  anticipate U.S. inflation and ignore the value of the dollar relative to foreign currencies. 
B)  ignore U.S. inflation and ignore the value of the dollar relative to foreign currencies. 
C)  anticipate U.S. inflation and guess the value of the dollar relative to foreign currencies. 
D)  ignore U.S. inflation and guess the value of the dollar relative to foreign currencies. 
E)  International transactions are not affected by inflation or foreign exchange. 
A)  anticipate U.S. inflation and ignore the value of the dollar relative to foreign currencies. 
B)  ignore U.S. inflation and ignore the value of the dollar relative to foreign currencies. 
C)  anticipate U.S. inflation and guess the value of the dollar relative to foreign currencies. 
D)  ignore U.S. inflation and guess the value of the dollar relative to foreign currencies. 
E)  International transactions are not affected by inflation or foreign exchange.

Question 14

In 2014, what percentage of the unemployed received benefits?

Accepted Answer

A)  10 percent 
B)  15 percent 
C)  27 percent 
D)  50 percent 
E)  100 percent 
A)  10 percent 
B)  15 percent 
C)  27 percent 
D)  50 percent 
E)  100 percent

Question 15

In an economy, U = the number of adults who are unemployed, E = the number of adults who are employed, and NLF = the number of adults not in the labor force. The unemployment rate of the economy is equal to _____

Accepted Answer

A)  U/(E + NLF). 
B)  U/E. 
C)  U/(U + 
E) . 
D)  U/(U + E − NLF). 
A)  U/(E + NLF). 
B)  U/E. 
C)  U/(U + 
E) . 
D)  U/(U + E − NLF).

Question 16

What is the effect of inflation on the economy?

Accepted Answer

A)  Anticipated inflation creates more problems than unanticipated inflation. 
B)  Unanticipated inflation creates more problems than anticipated inflation. 
C)  Real inflation creates more problems than nominal inflation. 
D)  Nominal inflation creates more problems than real inflation. 
E)  Inflation has no impact on the economy. 
A)  Anticipated inflation creates more problems than unanticipated inflation. 
B)  Unanticipated inflation creates more problems than anticipated inflation. 
C)  Real inflation creates more problems than nominal inflation. 
D)  Nominal inflation creates more problems than real inflation. 
E)  Inflation has no impact on the economy.

Question 17

The benefits paid by the largest pension program in the United States are _____

Accepted Answer

A)  not adjusted for changes in the price level. 
B)  adjusted for changes in the price level. 
C)  revised every five years. 
D)  adjusted for changes in the nominal rate of interest. 
E)  adjusted for changes in the real rate of interest. 
A)  not adjusted for changes in the price level. 
B)  adjusted for changes in the price level. 
C)  revised every five years. 
D)  adjusted for changes in the nominal rate of interest. 
E)  adjusted for changes in the real rate of interest.

Question 18

Construction workers at times face high rates of unemployment because their work is both seasonal and subject to wide swings over the business cycle.

Accepted Answer

A) True 
 B)False

Question 19

Cyclical unemployment results from _____

Accepted Answer

A)  a mismatch of skills. 
B)  being in the wrong geographical location. 
C)  the monetary cost and the time it takes to find the best job. 
D)  seasonal decreases in the demand for labor. 
E)  a prolonged decline in business activity. 
A)  a mismatch of skills. 
B)  being in the wrong geographical location. 
C)  the monetary cost and the time it takes to find the best job. 
D)  seasonal decreases in the demand for labor. 
E)  a prolonged decline in business activity.

Question 20

When an economy is operating at full employment, _____

Accepted Answer

A)  structural unemployment does not exist. 
B)  cyclical unemployment does not exist. 
C)  the unemployment rate is zero. 
D)  seasonal unemployment does not exist. 
E)  the number of discouraged workers is zero. 
A)  structural unemployment does not exist. 
B)  cyclical unemployment does not exist. 
C)  the unemployment rate is zero. 
D)  seasonal unemployment does not exist. 
E)  the number of discouraged workers is zero.

The view that union wage demands may be a source of inflation would be best associated with cost-push inflation.

Discouraged workers are included in labor force figures, but not in unemployment figures.

Not counting _____ as unemployed understates unemployment.

During periods when the inflation rate fluctuates widely, _____

"Discouraged workers" comprise the percentage of those in the _____

Inflation is defined as a sustained increase in an economy's price level.

Suppose there is a 3 percent increase in the nominal wages of workers in an economy. The annual rate of inflation in the economy is about 6 percent. Which of the following is true?

Suppose an economy had an inflation rate of 7 percent last year and decreased to 6 percent this year. This means that the economy is _____

Which of the following people would be classified as unemployed?

Inflation _____

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. How many adults are unemployed?

An increase in the interest rate will increase the demand for loanable funds.

U.S. firms involved in international trade have to _____

In 2014, what percentage of the unemployed received benefits?

In an economy, U = the number of adults who are unemployed, E = the number of adults who are employed, and NLF = the number of adults not in the labor force. The unemployment rate of the economy is equal to _____

What is the effect of inflation on the economy?

The benefits paid by the largest pension program in the United States are _____

Construction workers at times face high rates of unemployment because their work is both seasonal and subject to wide swings over the business cycle.

Cyclical unemployment results from _____

When an economy is operating at full employment, _____

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

Exam 7: Unemployment and Inflation.

The view that union wage demands may be a source of inflation would be best associated with cost-push inflation.

Discouraged workers are included in labor force figures, but not in unemployment figures.

Not counting _____ as unemployed understates unemployment.

During periods when the inflation rate fluctuates widely, _____

"Discouraged workers" comprise the percentage of those in the _____

Inflation is defined as a sustained increase in an economy's price level.

Suppose there is a 3 percent increase in the nominal wages of workers in an economy. The annual rate of inflation in the economy is about 6 percent. Which of the following is true?

Suppose an economy had an inflation rate of 7 percent last year and decreased to 6 percent this year. This means that the economy is _____

Which of the following people would be classified as unemployed?

Inflation _____

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. How many adults are unemployed?

An increase in the interest rate will increase the demand for loanable funds.

U.S. firms involved in international trade have to _____

In 2014, what percentage of the unemployed received benefits?

In an economy, U = the number of adults who are unemployed, E = the number of adults who are employed, and NLF = the number of adults not in the labor force. The unemployment rate of the economy is equal to _____

What is the effect of inflation on the economy?

The benefits paid by the largest pension program in the United States are _____

Construction workers at times face high rates of unemployment because their work is both seasonal and subject to wide swings over the business cycle.

Cyclical unemployment results from _____

When an economy is operating at full employment, _____

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