Question 1

The labor force participation rate of women in the United States has been

Accepted Answer

A) increasing for several decades. 
B) decreasing for the past several decades after increasing dramatically in the early 1900s. 
C) approximately constant during the last three decades. 
D) decreasing since the early 1900s. 
A) increasing for several decades. 
B) decreasing for the past several decades after increasing dramatically in the early 1900s. 
C) approximately constant during the last three decades. 
D) decreasing since the early 1900s.

Question 2

Which of the following will be true for an economy that is operating at full employment?

Accepted Answer

A) The rate of unemployment will be zero. 
B) The actual rate of unemployment will be equal to the natural rate. 
C) The employment/population ratio will be equal to 100 percent. 
D) Everyone who would like to have a job will be employed. 
A) The rate of unemployment will be zero. 
B) The actual rate of unemployment will be equal to the natural rate. 
C) The employment/population ratio will be equal to 100 percent. 
D) Everyone who would like to have a job will be employed.

Question 3

During a sustained economic expansion,

Accepted Answer

A) the rate of unemployment will generally fall and the employment/population ratio will generally rise. 
B) the rate of unemployment will generally rise and the employment/population ratio will generally fall. 
C) both the rate of unemployment and the employment/population ratio will generally decline. 
D) both the rate of unemployment and the employment/population ratio will generally rise. 
A) the rate of unemployment will generally fall and the employment/population ratio will generally rise. 
B) the rate of unemployment will generally rise and the employment/population ratio will generally fall. 
C) both the rate of unemployment and the employment/population ratio will generally decline. 
D) both the rate of unemployment and the employment/population ratio will generally rise.

Question 4

Which of the following is a positive effect of job search and the unemployment that often accompanies it?

Accepted Answer

A) It keeps wages and income levels low. 
B) It permits individuals to better match their skills and preferences with the requirements of a job. 
C) It reduces the wage gap between high skill workers and those with few skills. 
D) It creates political pressure for an increase in the minimum wage,which will reduce the rate of unemployment in the long run. 
A) It keeps wages and income levels low. 
B) It permits individuals to better match their skills and preferences with the requirements of a job. 
C) It reduces the wage gap between high skill workers and those with few skills. 
D) It creates political pressure for an increase in the minimum wage,which will reduce the rate of unemployment in the long run.

Question 5

Discuss the dangers of inflation;that is,why may it hurt an economy?

Accepted Answer

The three biggest dangers of inflation a

Question 6

If the consumer price index (CPI)was 125 at year-end of 2008 and 132.5 at year-end 2009,inflation during 2009 was

Accepted Answer

A) zero;prices were stable during 2009. 
B) 6.0 percent. 
C) 7.5 percent. 
D) 12.5 percent. 
A) zero;prices were stable during 2009. 
B) 6.0 percent. 
C) 7.5 percent. 
D) 12.5 percent.

Question 7

The population (age 16 and over)of Italia is 250 million;10 million are unemployed,and 125 million hold jobs.The employment/population ratio in Italia is

Accepted Answer

A) 8 percent. 
B) 50 percent. 
C) 54 percent. 
D) 92 percent. 
A) 8 percent. 
B) 50 percent. 
C) 54 percent. 
D) 92 percent.

Question 8

A general mismatch between the skills of unemployed workers and the skills needed by employers with job openings results in

Accepted Answer

A) frictional unemployment. 
B) structural unemployment. 
C) cyclical unemployment. 
D) a higher labor force participation rate. 
A) frictional unemployment. 
B) structural unemployment. 
C) cyclical unemployment. 
D) a higher labor force participation rate.

Question 9

Suppose the official unemployment rate is 10 percent.We can conclude without question that

Accepted Answer

A) the same 10 percent of the people in the economy were out of work for the entire year 
B) one of every ten people in the labor force is currently unemployed 
C) the same 10 percent of the people in the labor force were out of work for the entire year 
D) every person in the labor force was out of work for 10 percent of the year 
E) 10 percent of the people in the economy were each out of work for 10 percent of the year 
A) the same 10 percent of the people in the economy were out of work for the entire year 
B) one of every ten people in the labor force is currently unemployed 
C) the same 10 percent of the people in the labor force were out of work for the entire year 
D) every person in the labor force was out of work for 10 percent of the year 
E) 10 percent of the people in the economy were each out of work for 10 percent of the year

Question 10

During the early 1990s,many workers in military-related industries lost their jobs as the defense budget was reduced.Unemployment of this type is called

Accepted Answer

A) cyclical unemployment. 
B) the natural rate of unemployment. 
C) frictional unemployment. 
D) structural unemployment. 
A) cyclical unemployment. 
B) the natural rate of unemployment. 
C) frictional unemployment. 
D) structural unemployment.

Question 11

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 counted as unemployed is

Accepted Answer

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

Question 12

Potential GDP

Accepted Answer

A) is always less than actual GDP. 
B) is identical to actual GDP. 
C) measures inflation. 
D) is the output an economy could produce at full employment. 
A) is always less than actual GDP. 
B) is identical to actual GDP. 
C) measures inflation. 
D) is the output an economy could produce at full employment.

Question 13

At the beginning of a year,decision makers expect the general level of prices to increase at a 6 percent annual rate.The CPI increases from 150 to 154.5 during the year;this indicates that

Accepted Answer

A) decision makers underestimated the rate of inflation during the year. 
B) decision makers overestimated the rate of inflation during the year. 
C) decision makers accurately forecast the rate of inflation during the year. 
D) the rate of inflation during the year was 4.5 percent. 
A) decision makers underestimated the rate of inflation during the year. 
B) decision makers overestimated the rate of inflation during the year. 
C) decision makers accurately forecast the rate of inflation during the year. 
D) the rate of inflation during the year was 4.5 percent.

Question 14

In contrast with unanticipated inflation,anticipated inflation implies that

Accepted Answer

A) the government was informed about inflation. 
B) most decision makers expected the general increase in the price level. 
C) the increase in the general level of prices was growth of GDP. 
D) the increase in the general level of prices was expected by borrowers but not lenders. 
A) the government was informed about inflation. 
B) most decision makers expected the general increase in the price level. 
C) the increase in the general level of prices was growth of GDP. 
D) the increase in the general level of prices was expected by borrowers but not lenders.

Question 15

The current U.S.unemployment insurance program tends to

Accepted Answer

A) increase the incentive to switch occupations. 
B) reduce the time workers stay unemployed. 
C) make it more costly for unemployed workers to turn down available jobs. 
D) raise the unemployment rate. 
A) increase the incentive to switch occupations. 
B) reduce the time workers stay unemployed. 
C) make it more costly for unemployed workers to turn down available jobs. 
D) raise the unemployment rate.

Question 16

The population (age 16 and over)of Lebos is 400 million;20 million are unemployed,and 230 million hold jobs.What are the rates of unemployment and labor force participation of Lebos?

Accepted Answer

A) Unemployment is 8 percent,and labor force participation is 62.5 percent. 
B) Unemployment is 8.7 percent,and labor force participation is 92 percent. 
C) Unemployment is 8.7 percent,and labor force participation is 62.5 percent. 
D) Unemployment is 5 percent,and labor force participation is 57.5 percent. 
A) Unemployment is 8 percent,and labor force participation is 62.5 percent. 
B) Unemployment is 8.7 percent,and labor force participation is 92 percent. 
C) Unemployment is 8.7 percent,and labor force participation is 62.5 percent. 
D) Unemployment is 5 percent,and labor force participation is 57.5 percent.

Question 17

Economists usually use the term "recession" to refer to

Accepted Answer

A) any slowdown in the growth of real GDP. 
B) zero real GDP growth. 
C) two or more consecutive quarters of declining real GDP. 
D) a reduction in nominal GDP lasting more than six months. 
A) any slowdown in the growth of real GDP. 
B) zero real GDP growth. 
C) two or more consecutive quarters of declining real GDP. 
D) a reduction in nominal GDP lasting more than six months.

Question 18

Which of the following individuals would be considered unemployed by the official government definition?

Accepted Answer

A) George,a mathematician,who returned to graduate school after failing to find a job the last four months 
B) Gwen,a medical student,who is still in college and is not working 
C) Morgan,who is employed part-time but desires a full-time job 
D) Ralph,an auto worker vacationing in Florida during a layoff at a General Motors plant 
A) George,a mathematician,who returned to graduate school after failing to find a job the last four months 
B) Gwen,a medical student,who is still in college and is not working 
C) Morgan,who is employed part-time but desires a full-time job 
D) Ralph,an auto worker vacationing in Florida during a layoff at a General Motors plant

Question 19

The unemployment rate equals the number of persons

Accepted Answer

A) unemployed divided by the number employed. 
B) unemployed divided by the number in the labor force. 
C) unemployed divided by the population age 16 and over. 
D) not working divided by the population age 16 and over. 
A) unemployed divided by the number employed. 
B) unemployed divided by the number in the labor force. 
C) unemployed divided by the population age 16 and over. 
D) not working divided by the population age 16 and over.

Question 20

At the beginning of a year,decision makers expect the general level of prices to increase at a 5 percent annual rate.The CPI increases from 150 to 157.5 during the year;this indicates that

Accepted Answer

A) decision makers underestimated the rate of inflation during the year. 
B) decision makers overestimated the rate of inflation during the year. 
C) decision makers anticipated accurately the inflation that occurred during the year. 
D) the rate of inflation during the year was 7.5 percent. 
A) decision makers underestimated the rate of inflation during the year. 
B) decision makers overestimated the rate of inflation during the year. 
C) decision makers anticipated accurately the inflation that occurred during the year. 
D) the rate of inflation during the year was 7.5 percent.

Exam 8: Economic Fluctuations, unemployment, and Inflation

The labor force participation rate of women in the United States has been

Which of the following will be true for an economy that is operating at full employment?

During a sustained economic expansion,

Which of the following is a positive effect of job search and the unemployment that often accompanies it?

Discuss the dangers of inflation;that is,why may it hurt an economy?

If the consumer price index (CPI)was 125 at year-end of 2008 and 132.5 at year-end 2009,inflation during 2009 was

The population (age 16 and over)of Italia is 250 million;10 million are unemployed,and 125 million hold jobs.The employment/population ratio in Italia is

A general mismatch between the skills of unemployed workers and the skills needed by employers with job openings results in

Suppose the official unemployment rate is 10 percent.We can conclude without question that

During the early 1990s,many workers in military-related industries lost their jobs as the defense budget was reduced.Unemployment of this type is called

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 counted as unemployed is

Potential GDP

At the beginning of a year,decision makers expect the general level of prices to increase at a 6 percent annual rate.The CPI increases from 150 to 154.5 during the year;this indicates that

In contrast with unanticipated inflation,anticipated inflation implies that

The current U.S.unemployment insurance program tends to

The population (age 16 and over)of Lebos is 400 million;20 million are unemployed,and 230 million hold jobs.What are the rates of unemployment and labor force participation of Lebos?

Economists usually use the term "recession" to refer to

Which of the following individuals would be considered unemployed by the official government definition?

The unemployment rate equals the number of persons

At the beginning of a year,decision makers expect the general level of prices to increase at a 5 percent annual rate.The CPI increases from 150 to 157.5 during the year;this indicates that

The Economic Approach

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Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, output, and Employment

Creating an Environment for Growth and Prosperity

Institutions,policies,and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

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