Question 1

Demand-pull inflation could be the result of which of the following actions?

Accepted Answer

A)  OPEC countries increase oil prices significantly 
B)  the U.S. becomes engaged in a major war 
C)  workers start to unionize more successfully 
D)  people are afraid to make major purchases as the economy heads into a recession 
A)  OPEC countries increase oil prices significantly 
B)  the U.S. becomes engaged in a major war 
C)  workers start to unionize more successfully 
D)  people are afraid to make major purchases as the economy heads into a recession B

Question 2

If the inflation rate is 4 percent and the nominal interest rate is 6 percent, then the real interest rate is 2 percent.

Accepted Answer

A) True 
 B)False  True

Question 3

All of the following are limitations of the consumer price index except

Accepted Answer

A)  its market basket fails to keep pace with the development of better products 
B)  it ignores the discounting of prices by merchants 
C)  it does not keep pace with changes in people's buying patterns 
D)  it applies to only consumers of 21 years of age or over 
A)  its market basket fails to keep pace with the development of better products 
B)  it ignores the discounting of prices by merchants 
C)  it does not keep pace with changes in people's buying patterns 
D)  it applies to only consumers of 21 years of age or over D

Question 4

An "overheated economy" is one for which the actual rate of unemployment exceeds the natural rate of unemployment.

Accepted Answer

A) True 
 B)False

Question 5

If the CPI for a country is 100 in the year 2006, and 120 in the year 2007, then the base year is

Accepted Answer

A)  2006 
B)  2007 
C)  2008 
D)  cannot tell from the information given 
A)  2006 
B)  2007 
C)  2008 
D)  cannot tell from the information given

Question 6

The unemployment rate for blacks is ________ that of whites.

Accepted Answer

A)  about the same as 
B)  lower than 
C)  about twice 
D)  about three times 
A)  about the same as 
B)  lower than 
C)  about twice 
D)  about three times

Question 7

The real interest rate equals the nominal interest rate plus the inflation rate.

Accepted Answer

A) True 
 B)False

Question 8

Unemployment insurance was established in the United States as part of the Social Security Act.

Accepted Answer

A) True 
 B)False

Question 9

Suppose that the consumer price index equaled 30 in 1960 and 180 in 2008. If a movie cost $1 to attend in 1960, how much would the same movie cost to attend in the prices of 2008?

Accepted Answer

A)  $4 
B)  $5 
C)  $6 
D)  $7 
A)  $4 
B)  $5 
C)  $6 
D)  $7

Question 10

If the CPI for a country is 100 in the year 2007, and 120 in the year 2008, then the inflation rate for that country for the one-year period 2007-2008 is

Accepted Answer

A)  2 percent 
B)  20 percent 
C)  100 percent 
D)  200 percent 
A)  2 percent 
B)  20 percent 
C)  100 percent 
D)  200 percent

Question 11

A decrease in the index of leading economic indicators would suggest that the economy will likely

Accepted Answer

A)  realize demand-pull inflation 
B)  realize cost-push inflation 
C)  head into an expansion 
D)  head into a recession 
A)  realize demand-pull inflation 
B)  realize cost-push inflation 
C)  head into an expansion 
D)  head into a recession

Question 12

The accuracy of the official unemployment rate is criticized because it

Accepted Answer

A)  includes only those people who are over 24 years of age 
B)  counts as unemployed homemakers who are not actively seeking employment 
C)  counts as unemployed students who are not actively seeking employment 
D)  doesn't count as unemployed part-time workers who would like full-time jobs 
A)  includes only those people who are over 24 years of age 
B)  counts as unemployed homemakers who are not actively seeking employment 
C)  counts as unemployed students who are not actively seeking employment 
D)  doesn't count as unemployed part-time workers who would like full-time jobs

Question 13

Suppose that the consumer price index equaled 30 in 1960 and 170 in 2013. If you had $100 to buy some goods in 2013, you would have needed ______ in 1960 to buy the same amount of goods.

Accepted Answer

A)  $12.88 
B)  $15.34 
C)  $17.64 
D)  $18.98 
A)  $12.88 
B)  $15.34 
C)  $17.64 
D)  $18.98

Question 14

The peak and the trough represent the turning points of a business cycle.

Accepted Answer

A) True 
 B)False

Question 15

The Big Mac Index shows the cheapest Big Mac is sold in which of the following countries?

Accepted Answer

A)  U.S. 
B)  Mexico 
C)  China 
D)  Russia 
A)  U.S. 
B)  Mexico 
C)  China 
D)  Russia

Question 16

______ is found quite often side by side with job vacancies, because the unemployed lack the skills required for newly created jobs.

Accepted Answer

A)  Structural unemployment 
B)  Discouraged unemployment 
C)  Cyclical unemployment 
D)  Frictional unemployment 
A)  Structural unemployment 
B)  Discouraged unemployment 
C)  Cyclical unemployment 
D)  Frictional unemployment

Question 17

When the federal government indexed the personal income tax system in 1985, a taxpayer could be pushed into a higher tax bracket only if her real income increased.

Accepted Answer

A) True 
 B)False

Question 18

Compared to Europe, in the United States we see weaker unions, a lower minimum wage, and substantial competition for low-skilled jobs from foreign workers and immigrants.

Accepted Answer

A) True 
 B)False

Question 19

Most economists believe that the natural rate of unemployment is between

Accepted Answer

A)  0% and 1% 
B)  2% and 3% 
C)  4% and 6% 
D)  7% and 9% 
A)  0% and 1% 
B)  2% and 3% 
C)  4% and 6% 
D)  7% and 9%

Question 20

The most frequently cited indicator of inflation is the gross domestic product deflator.

Accepted Answer

A) True 
 B)False

Demand-pull inflation could be the result of which of the following actions?

If the inflation rate is 4 percent and the nominal interest rate is 6 percent, then the real interest rate is 2 percent.

All of the following are limitations of the consumer price index except

An "overheated economy" is one for which the actual rate of unemployment exceeds the natural rate of unemployment.

If the CPI for a country is 100 in the year 2006, and 120 in the year 2007, then the base year is

The unemployment rate for blacks is ________ that of whites.

The real interest rate equals the nominal interest rate plus the inflation rate.

Unemployment insurance was established in the United States as part of the Social Security Act.

Suppose that the consumer price index equaled 30 in 1960 and 180 in 2008. If a movie cost $1 to attend in 1960, how much would the same movie cost to attend in the prices of 2008?

If the CPI for a country is 100 in the year 2007, and 120 in the year 2008, then the inflation rate for that country for the one-year period 2007-2008 is

A decrease in the index of leading economic indicators would suggest that the economy will likely

The accuracy of the official unemployment rate is criticized because it

Suppose that the consumer price index equaled 30 in 1960 and 170 in 2013. If you had $100 to buy some goods in 2013, you would have needed ______ in 1960 to buy the same amount of goods.

The peak and the trough represent the turning points of a business cycle.

The Big Mac Index shows the cheapest Big Mac is sold in which of the following countries?

______ is found quite often side by side with job vacancies, because the unemployed lack the skills required for newly created jobs.

When the federal government indexed the personal income tax system in 1985, a taxpayer could be pushed into a higher tax bracket only if her real income increased.

Compared to Europe, in the United States we see weaker unions, a lower minimum wage, and substantial competition for low-skilled jobs from foreign workers and immigrants.

Most economists believe that the natural rate of unemployment is between

The most frequently cited indicator of inflation is the gross domestic product deflator.

Scarcity and Choice

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters

Exam 11: The Business Cycle, Unemployment, and Inflation

Demand-pull inflation could be the result of which of the following actions?

If the inflation rate is 4 percent and the nominal interest rate is 6 percent, then the real interest rate is 2 percent.

All of the following are limitations of the consumer price index except

An "overheated economy" is one for which the actual rate of unemployment exceeds the natural rate of unemployment.

If the CPI for a country is 100 in the year 2006, and 120 in the year 2007, then the base year is

The unemployment rate for blacks is ________ that of whites.

The real interest rate equals the nominal interest rate plus the inflation rate.

Unemployment insurance was established in the United States as part of the Social Security Act.

Suppose that the consumer price index equaled 30 in 1960 and 180 in 2008. If a movie cost $1 to attend in 1960, how much would the same movie cost to attend in the prices of 2008?

If the CPI for a country is 100 in the year 2007, and 120 in the year 2008, then the inflation rate for that country for the one-year period 2007-2008 is

A decrease in the index of leading economic indicators would suggest that the economy will likely

The accuracy of the official unemployment rate is criticized because it

Suppose that the consumer price index equaled 30 in 1960 and 170 in 2013. If you had $100 to buy some goods in 2013, you would have needed ______ in 1960 to buy the same amount of goods.

The peak and the trough represent the turning points of a business cycle.

The Big Mac Index shows the cheapest Big Mac is sold in which of the following countries?

______ is found quite often side by side with job vacancies, because the unemployed lack the skills required for newly created jobs.

When the federal government indexed the personal income tax system in 1985, a taxpayer could be pushed into a higher tax bracket only if her real income increased.

Compared to Europe, in the United States we see weaker unions, a lower minimum wage, and substantial competition for low-skilled jobs from foreign workers and immigrants.

Most economists believe that the natural rate of unemployment is between

The most frequently cited indicator of inflation is the gross domestic product deflator.

Scarcity and Choice

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters