Question 1

An increase in unemployment insurance is likely to _____

Accepted Answer

A)  reduce a person's incentive to look for work. 
B)  reduce the opportunity cost of remaining employed. 
C)  provide a better safety net for employed families. 
D)  decrease the tax imposed on consumers. 
E)  increase the need to accept the first job available after becoming unemployed. 
A)  reduce a person's incentive to look for work. 
B)  reduce the opportunity cost of remaining employed. 
C)  provide a better safety net for employed families. 
D)  decrease the tax imposed on consumers. 
E)  increase the need to accept the first job available after becoming unemployed.

Question 2

A decrease in a person's real wage necessarily means _____

Accepted Answer

A)  lower purchasing power. 
B)  lower nominal wage. 
C)  lower personal disposable income. 
D)  higher nominal wage. 
E)  higher personal disposable income. 
A)  lower purchasing power. 
B)  lower nominal wage. 
C)  lower personal disposable income. 
D)  higher nominal wage. 
E)  higher personal disposable income.

Question 3

Consider an economy made up of 100 people, 60 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The number of unemployed persons is _____.

Accepted Answer

A)  10 
B)  15 
C)  40 
D)  30 
E)  90 
A)  10 
B)  15 
C)  40 
D)  30 
E)  90

Question 4

The nominal interest rate _____

Accepted Answer

A)  varies directly with the rate of expected inflation in an economy. 
B)  is the interest rate expressed in dollars of constant purchasing power. 
C)  equals the difference between the real interest rate and the inflation rate. 
D)  is the basis for decisions taken by the lenders and the borrowers in an economy. 
E)  is the percentage increase in the average price level from one year to the next. 
A)  varies directly with the rate of expected inflation in an economy. 
B)  is the interest rate expressed in dollars of constant purchasing power. 
C)  equals the difference between the real interest rate and the inflation rate. 
D)  is the basis for decisions taken by the lenders and the borrowers in an economy. 
E)  is the percentage increase in the average price level from one year to the next.

Question 5

When economists talk about full employment they mean _____

Accepted Answer

A)  zero unemployment. 
B)  seasonal unemployment. 
C)  structural unemployment. 
D)  cyclical unemployment. 
E)  low unemployment. 
A)  zero unemployment. 
B)  seasonal unemployment. 
C)  structural unemployment. 
D)  cyclical unemployment. 
E)  low unemployment.

Question 6

Ginger quits her job as personal secretary to the Vice President of HR Technologies because she cannot handle the stress. It takes her three weeks to find a job as a receptionist at Mariam Hotels and Resorts. Over these three weeks, she would be considered frictionally unemployed.

Accepted Answer

A) True 
 B)False

Question 7

If the price level increases by 2 percent each year, the inflation rate is increasing.

Accepted Answer

A) True 
 B)False

Question 8

The nominal interest rate is equal to the real interest rate minus the anticipated inflation rate.

Accepted Answer

A) True 
 B)False

Question 9

Which type of unemployment is likely to decrease the most during an economy's boom?

Accepted Answer

A)  frictional unemployment 
B)  seasonal unemployment 
C)  structural unemployment 
D)  cyclical unemployment 
E)  underemployment 
A)  frictional unemployment 
B)  seasonal unemployment 
C)  structural unemployment 
D)  cyclical unemployment 
E)  underemployment

Question 10

In recent times, there has been a decline in the sale of newspapers in the United States as people prefer to read the news on the internet. This has caused many newspaper journalists to lose their jobs. This is an example of _____

Accepted Answer

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

Question 11

Inflation is _____

Accepted Answer

A)  a reduction in everyone's standard of living. 
B)  a rise in the real prices of all goods and services. 
C)  a general and continuing rise in the money prices of goods and services. 
D)  a continuing rise in everyone's standard of living. 
E)  an increase in the value of money compared to the value of goods. 
A)  a reduction in everyone's standard of living. 
B)  a rise in the real prices of all goods and services. 
C)  a general and continuing rise in the money prices of goods and services. 
D)  a continuing rise in everyone's standard of living. 
E)  an increase in the value of money compared to the value of goods.

Question 12

The labor force in an economy consists of all _____

Accepted Answer

A)  people in the economy who are employed. 
B)  people in the economy who are unemployed. 
C)  adults in the economy. 
D)  adults in the economy who are employed and unemployed. 
E)  adults in the economy who are discouraged. 
A)  people in the economy who are employed. 
B)  people in the economy who are unemployed. 
C)  adults in the economy. 
D)  adults in the economy who are employed and unemployed. 
E)  adults in the economy who are discouraged.

Question 13

If government officials claim that more people are working now than ever before, then which of the following is true?

Accepted Answer

A)  The unemployment rate is lower now than ever before. 
B)  The number of people unemployed is lower now than ever before. 
C)  The employment rate is higher now than ever before. 
D)  The number of people in the labor force is higher now than ever before. 
E)  The number of people employed is higher now than ever before. 
A)  The unemployment rate is lower now than ever before. 
B)  The number of people unemployed is lower now than ever before. 
C)  The employment rate is higher now than ever before. 
D)  The number of people in the labor force is higher now than ever before. 
E)  The number of people employed is higher now than ever before.

Question 14

How does unemployment insurance impact the labor market?

Accepted Answer

A)  It increases the incentive to find work and increases unemployment. 
B)  It increases the incentive to find work and decreases unemployment. 
C)  It decreases the incentive to find work and increases unemployment. 
D)  It decreases the incentive to find work and decreases unemployment. 
E)  It has no effect on the incentive to find work or unemployment. 
A)  It increases the incentive to find work and increases unemployment. 
B)  It increases the incentive to find work and decreases unemployment. 
C)  It decreases the incentive to find work and increases unemployment. 
D)  It decreases the incentive to find work and decreases unemployment. 
E)  It has no effect on the incentive to find work or unemployment.

Question 15

Most of the unemployment during the Great Depression was cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 16

Underemployment refers to _____

Accepted Answer

A)  seasonal unemployment. 
B)  people working full time though they would rather work part time. 
C)  the unemployment that occurs when the actual level of employment is less than the full employment level. 
D)  people working in jobs that do not fully use their skills. 
E)  people working in jobs that do not pay well. 
A)  seasonal unemployment. 
B)  people working full time though they would rather work part time. 
C)  the unemployment that occurs when the actual level of employment is less than the full employment level. 
D)  people working in jobs that do not fully use their skills. 
E)  people working in jobs that do not pay well.

Question 17

Unemployment benefits _____

Accepted Answer

A)  are cash transfers to those who lose their jobs and actively seek employment. 
B)  reduce the opportunity cost of remaining employed. 
C)  provide a better safety net for employed families. 
D)  decrease the tax imposed on consumers. 
E)  increase the need to accept the first job available after becoming unemployed. 
A)  are cash transfers to those who lose their jobs and actively seek employment. 
B)  reduce the opportunity cost of remaining employed. 
C)  provide a better safety net for employed families. 
D)  decrease the tax imposed on consumers. 
E)  increase the need to accept the first job available after becoming unemployed.

Question 18

If the aggregate supply curve shifts leftward, then _____

Accepted Answer

A)  the price level increases and output increases. 
B)  the resulting increase in the price level is usually called cost-push inflation. 
C)  the resulting increase in the price level is usually called demand-pull inflation. 
D)  the price level increases as long as the aggregate demand curve shifts rightward. 
E)  the price level decreases and output increases. 
A)  the price level increases and output increases. 
B)  the resulting increase in the price level is usually called cost-push inflation. 
C)  the resulting increase in the price level is usually called demand-pull inflation. 
D)  the price level increases as long as the aggregate demand curve shifts rightward. 
E)  the price level decreases and output increases.

Question 19

Unemployment benefits replace on average how much of a person's take-home pay?

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 20

Why is the U.S. unemployment rate important?

Accepted Answer

A)  It increases the incentives to find work and increases unemployment. 
B)  It reduces the opportunity cost of remaining employed. 
C)  It increases the need to accept the first job available after becoming unemployed. 
D)  It provides a useful measure of trends across demographic groups, regions, and over time. 
E)  Economists are undecided. 
A)  It increases the incentives to find work and increases unemployment. 
B)  It reduces the opportunity cost of remaining employed. 
C)  It increases the need to accept the first job available after becoming unemployed. 
D)  It provides a useful measure of trends across demographic groups, regions, and over time. 
E)  Economists are undecided.

An increase in unemployment insurance is likely to _____

A decrease in a person's real wage necessarily means _____

Consider an economy made up of 100 people, 60 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The number of unemployed persons is _____.

The nominal interest rate _____

When economists talk about full employment they mean _____

Ginger quits her job as personal secretary to the Vice President of HR Technologies because she cannot handle the stress. It takes her three weeks to find a job as a receptionist at Mariam Hotels and Resorts. Over these three weeks, she would be considered frictionally unemployed.

If the price level increases by 2 percent each year, the inflation rate is increasing.

The nominal interest rate is equal to the real interest rate minus the anticipated inflation rate.

Which type of unemployment is likely to decrease the most during an economy's boom?

In recent times, there has been a decline in the sale of newspapers in the United States as people prefer to read the news on the internet. This has caused many newspaper journalists to lose their jobs. This is an example of _____

Inflation is _____

The labor force in an economy consists of all _____

If government officials claim that more people are working now than ever before, then which of the following is true?

How does unemployment insurance impact the labor market?

Most of the unemployment during the Great Depression was cyclical unemployment.

Underemployment refers to _____

Unemployment benefits _____

If the aggregate supply curve shifts leftward, then _____

Unemployment benefits replace on average how much of a person's take-home pay?

Why is the U.S. unemployment rate important?

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.

An increase in unemployment insurance is likely to _____

A decrease in a person's real wage necessarily means _____

Consider an economy made up of 100 people, 60 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The number of unemployed persons is _____.

The nominal interest rate _____

When economists talk about full employment they mean _____

Ginger quits her job as personal secretary to the Vice President of HR Technologies because she cannot handle the stress. It takes her three weeks to find a job as a receptionist at Mariam Hotels and Resorts. Over these three weeks, she would be considered frictionally unemployed.

If the price level increases by 2 percent each year, the inflation rate is increasing.

The nominal interest rate is equal to the real interest rate minus the anticipated inflation rate.

Which type of unemployment is likely to decrease the most during an economy's boom?

In recent times, there has been a decline in the sale of newspapers in the United States as people prefer to read the news on the internet. This has caused many newspaper journalists to lose their jobs. This is an example of _____

Inflation is _____

The labor force in an economy consists of all _____

If government officials claim that more people are working now than ever before, then which of the following is true?

How does unemployment insurance impact the labor market?

Most of the unemployment during the Great Depression was cyclical unemployment.

Underemployment refers to _____

Unemployment benefits _____

If the aggregate supply curve shifts leftward, then _____

Unemployment benefits replace on average how much of a person's take-home pay?

Why is the U.S. unemployment rate important?

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