Question 1

The unemployment rate among African American workers in the United States is higher than that among white workers.

Accepted Answer

A) True 
 B)False

Question 2

If the CPI in the United States was 150 in 2003 and 160 in 2004, the inflation rate over the year was_____

Accepted Answer

A)  10 percent. 
B)  20 percent. 
C)  7 percent. 
D)  30 percent. 
E)  50 percent. 
A)  10 percent. 
B)  20 percent. 
C)  7 percent. 
D)  30 percent. 
E)  50 percent.

Question 3

After graduating from Harvard Law School, Anne started looking for a job. She could not find a job after looking for one week. Which of the following is true in this case?

Accepted Answer

A)  This is an example of frictional unemployment. 
B)  This is an example of cyclical unemployment. 
C)  This is an example of seasonal unemployment. 
D)  She is underemployed. 
E)  She is a discouraged worker. 
A)  This is an example of frictional unemployment. 
B)  This is an example of cyclical unemployment. 
C)  This is an example of seasonal unemployment. 
D)  She is underemployed. 
E)  She is a discouraged worker.

Question 4

If the nominal interest rate is 5 percent and there is no inflation, _____

Accepted Answer

A)  the real interest rate exceeds 5 percent. 
B)  the real interest rate is less than 5 percent. 
C)  the real interest rate is 5 percent. 
D)  there is not enough information to determine the real interest rate. 
E)  the real interest rate is zero. 
A)  the real interest rate exceeds 5 percent. 
B)  the real interest rate is less than 5 percent. 
C)  the real interest rate is 5 percent. 
D)  there is not enough information to determine the real interest rate. 
E)  the real interest rate is zero.

Question 5

Which of the following groups tends to have the highest unemployment rate in the United States?

Accepted Answer

A)  African American teenagers 
B)  workers, aged 25 or older, who are college graduates 
C)  white women 
D)  workers, 25 years of age or older, who are high school dropouts 
E)  white teenagers 
A)  African American teenagers 
B)  workers, aged 25 or older, who are college graduates 
C)  white women 
D)  workers, 25 years of age or older, who are high school dropouts 
E)  white teenagers

Question 6

During periods of inflation, all prices increase.

Accepted Answer

A) True 
 B)False

Question 7

There is evidence that unemployment insurance and other safety-net programs _____

Accepted Answer

A)  may increase unemployment. 
B)  increase the incentives to find work. 
C)  motivates Americans search harder and wider for a job. 
D)  increase labor supply. 
E)  decreases fraud. 
A)  may increase unemployment. 
B)  increase the incentives to find work. 
C)  motivates Americans search harder and wider for a job. 
D)  increase labor supply. 
E)  decreases fraud.

Question 8

If the official unemployment rate increases from February to March because of sluggish sales in the automobile industry, then the increase can be blamed on _____

Accepted Answer

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

Question 9

If the economy is experiencing extremely high increases 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 10

In which of the following industries are workers least likely to suffer from cyclical unemployment?

Accepted Answer

A)  the construction industry 
B)  automobile manufacturing 
C)  the apparel industry 
D)  education 
E)  tourism 
A)  the construction industry 
B)  automobile manufacturing 
C)  the apparel industry 
D)  education 
E)  tourism

Question 11

An increase in the interest rate, other things constant, will _____

Accepted Answer

A)  shift the demand for loanable funds curve to the right. 
B)  shift the demand for loanable funds curve to the left. 
C)  decrease the quantity of loanable funds supplied. 
D)  decrease the quantity of loanable funds demanded. 
E)  shift the supply of loanable funds curve to the right. 
A)  shift the demand for loanable funds curve to the right. 
B)  shift the demand for loanable funds curve to the left. 
C)  decrease the quantity of loanable funds supplied. 
D)  decrease the quantity of loanable funds demanded. 
E)  shift the supply of loanable funds curve to the right.

Question 12

Inflation can be caused _____

Accepted Answer

A)  only by increases in aggregate demand. 
B)  only by increases in aggregate supply. 
C)  only by decreases in aggregate supply. 
D)  by increases in aggregate supply or decreases in aggregate demand. 
E)  by increases in aggregate demand or decreases in aggregate supply. 
A)  only by increases in aggregate demand. 
B)  only by increases in aggregate supply. 
C)  only by decreases in aggregate supply. 
D)  by increases in aggregate supply or decreases in aggregate demand. 
E)  by increases in aggregate demand or decreases in aggregate supply.

Question 13

In the market for loanable funds, the equilibrium interest rate is determined by the intersection of _____

Accepted Answer

A)  the downward-sloping supply curve for loanable funds and the upward-sloping demand curve for loanable funds. 
B)  the upward-sloping supply curve for loanable funds and the downward-sloping demand curve for loanable funds. 
C)  the downward-sloping supply curve of loanable funds and the horizontal demand curve for loanable funds. 
D)  the downward-sloping supply curve of loanable funds and the vertical demand curve for loanable funds. 
E)  the upward-sloping supply curve for loanable funds and the horizontal demand curve for loanable funds. 
A)  the downward-sloping supply curve for loanable funds and the upward-sloping demand curve for loanable funds. 
B)  the upward-sloping supply curve for loanable funds and the downward-sloping demand curve for loanable funds. 
C)  the downward-sloping supply curve of loanable funds and the horizontal demand curve for loanable funds. 
D)  the downward-sloping supply curve of loanable funds and the vertical demand curve for loanable funds. 
E)  the upward-sloping supply curve for loanable funds and the horizontal demand curve for loanable funds.

Question 14

Which of the following is true about U.S. history prior to the 1950s?

Accepted Answer

A)  The inflation rate remained constant during this period. 
B)  Cost-push inflation led to depressions, which were followed by slowly rising price levels. 
C)  The price level remained constant during this period. 
D)  Major wars resulted in high inflation rates, after which the inflation rate tapered off. 
E)  Major wars resulted in high inflation rates that were usually followed by deflation. 
A)  The inflation rate remained constant during this period. 
B)  Cost-push inflation led to depressions, which were followed by slowly rising price levels. 
C)  The price level remained constant during this period. 
D)  Major wars resulted in high inflation rates, after which the inflation rate tapered off. 
E)  Major wars resulted in high inflation rates that were usually followed by deflation.

Question 15

Relative prices describe _____

Accepted Answer

A)  how some prices would increase and some would decrease. 
B)  how much one good costs compared to another. 
C)  how prices move in unison. 
D)  prices change according to the value of the dollar. 
E)  complicated international transactions. 
A)  how some prices would increase and some would decrease. 
B)  how much one good costs compared to another. 
C)  how prices move in unison. 
D)  prices change according to the value of the dollar. 
E)  complicated international transactions.

Question 16

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 labor force?

Accepted Answer

A)  4 million 
B)  32 million 
C)  50 million 
D)  54 million 
E)  84 million 
A)  4 million 
B)  32 million 
C)  50 million 
D)  54 million 
E)  84 million

Question 17

Market transactions, particularly long-term contracts, _____

Accepted Answer

A)  become more complicated as inflation becomes more unpredictable. 
B)  become more complicated as inflation becomes less unpredictable. 
C)  become less complicated as inflation becomes more unpredictable. 
D)  become less complicated as inflation becomes less unpredictable. 
E)  are not affected by inflation. 
A)  become more complicated as inflation becomes more unpredictable. 
B)  become more complicated as inflation becomes less unpredictable. 
C)  become less complicated as inflation becomes more unpredictable. 
D)  become less complicated as inflation becomes less unpredictable. 
E)  are not affected by inflation.

Question 18

If the inflation rate in an economy is 5 percent and the income earned by workers increases by 5 percent, then _____

Accepted Answer

A)  nominal income declines and real income increases. 
B)  both nominal income and real income increase by 5 percent. 
C)  nominal income increases and real income declines. 
D)  both nominal income and real income decrease by 5 percent. 
E)  nominal income increases by 5 percent and real income is unchanged. 
A)  nominal income declines and real income increases. 
B)  both nominal income and real income increase by 5 percent. 
C)  nominal income increases and real income declines. 
D)  both nominal income and real income decrease by 5 percent. 
E)  nominal income increases by 5 percent and real income is unchanged.

Question 19

If future price changes were perfectly anticipated by borrowers and lenders, then _____

Accepted Answer

A)  the expected real interest rate would be higher than the actual rate. 
B)  the expected real interest rate would lower than the actual rate. 
C)  the real interest rate in the future would decrease by the amount of the price increase. 
D)  the real interest rate in the future would increase by the amount of the price increase. 
E)  the real interest rate in the future would remain unchanged. 
A)  the expected real interest rate would be higher than the actual rate. 
B)  the expected real interest rate would lower than the actual rate. 
C)  the real interest rate in the future would decrease by the amount of the price increase. 
D)  the real interest rate in the future would increase by the amount of the price increase. 
E)  the real interest rate in the future would remain unchanged.

Question 20

Which of the following is likely to happen if people suddenly become more willing to lend money?

Accepted Answer

A)  An increase in the demand for loanable funds will increase the interest rate. 
B)  An increase in the supply of loanable funds will increase the interest rate. 
C)  An increase in the supply of loanable funds will decrease the interest rate. 
D)  An increase in the demand for loanable funds will decrease the interest rate. 
E)  A simultaneous increase in both the supply of and the demand for loanable funds will make it impossible to predict what will happen to the rate of interest. 
A)  An increase in the demand for loanable funds will increase the interest rate. 
B)  An increase in the supply of loanable funds will increase the interest rate. 
C)  An increase in the supply of loanable funds will decrease the interest rate. 
D)  An increase in the demand for loanable funds will decrease the interest rate. 
E)  A simultaneous increase in both the supply of and the demand for loanable funds will make it impossible to predict what will happen to the rate of interest.

The unemployment rate among African American workers in the United States is higher than that among white workers.

If the CPI in the United States was 150 in 2003 and 160 in 2004, the inflation rate over the year was_____

After graduating from Harvard Law School, Anne started looking for a job. She could not find a job after looking for one week. Which of the following is true in this case?

If the nominal interest rate is 5 percent and there is no inflation, _____

Which of the following groups tends to have the highest unemployment rate in the United States?

During periods of inflation, all prices increase.

There is evidence that unemployment insurance and other safety-net programs _____

If the official unemployment rate increases from February to March because of sluggish sales in the automobile industry, then the increase can be blamed on _____

If the economy is experiencing extremely high increases in the price level, it is called _____

In which of the following industries are workers least likely to suffer from cyclical unemployment?

An increase in the interest rate, other things constant, will _____

Inflation can be caused _____

In the market for loanable funds, the equilibrium interest rate is determined by the intersection of _____

Which of the following is true about U.S. history prior to the 1950s?

Relative prices describe _____

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 labor force?

Market transactions, particularly long-term contracts, _____

If the inflation rate in an economy is 5 percent and the income earned by workers increases by 5 percent, then _____

If future price changes were perfectly anticipated by borrowers and lenders, then _____

Which of the following is likely to happen if people suddenly become more willing to lend money?

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.

The unemployment rate among African American workers in the United States is higher than that among white workers.

If the CPI in the United States was 150 in 2003 and 160 in 2004, the inflation rate over the year was_____

After graduating from Harvard Law School, Anne started looking for a job. She could not find a job after looking for one week. Which of the following is true in this case?

If the nominal interest rate is 5 percent and there is no inflation, _____

Which of the following groups tends to have the highest unemployment rate in the United States?

During periods of inflation, all prices increase.

There is evidence that unemployment insurance and other safety-net programs _____

If the official unemployment rate increases from February to March because of sluggish sales in the automobile industry, then the increase can be blamed on _____

If the economy is experiencing extremely high increases in the price level, it is called _____

In which of the following industries are workers least likely to suffer from cyclical unemployment?

An increase in the interest rate, other things constant, will _____

Inflation can be caused _____

In the market for loanable funds, the equilibrium interest rate is determined by the intersection of _____

Which of the following is true about U.S. history prior to the 1950s?

Relative prices describe _____

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 labor force?

Market transactions, particularly long-term contracts, _____

If the inflation rate in an economy is 5 percent and the income earned by workers increases by 5 percent, then _____

If future price changes were perfectly anticipated by borrowers and lenders, then _____

Which of the following is likely to happen if people suddenly become more willing to lend money?

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