Question 1

The PPI is the

Accepted Answer

A) price parity index. 
B) prime producer index. 
C) producer price index. 
D) production performance indicator. 
A) price parity index. 
B) prime producer index. 
C) producer price index. 
D) production performance indicator.

Question 2

You agree to lend $1,000 for one year at a nominal interest rate of 10%.You anticipate that inflation will be 4% over that year.If inflation is instead 3% over that year,which of the following is true?

Accepted Answer

A) The real interest rate you earn on your money is lower than you expected. 
B) The purchasing power of the money that will be repaid to you will be lower than you expected. 
C) The person who borrowed the $1,000 will be worse off as a result of the unanticipated decrease in inflation. 
D) The real interest rate you earn on your money will be negative. 
A) The real interest rate you earn on your money is lower than you expected. 
B) The purchasing power of the money that will be repaid to you will be lower than you expected. 
C) The person who borrowed the $1,000 will be worse off as a result of the unanticipated decrease in inflation. 
D) The real interest rate you earn on your money will be negative.

Question 3

The average price of goods and services in the economy is also known as

Accepted Answer

A) the price level. 
B) the inflation rate. 
C) a market basket. 
D) the cost of living. 
A) the price level. 
B) the inflation rate. 
C) a market basket. 
D) the cost of living.

Question 4

Structural unemployment is the result of

Accepted Answer

A) a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs. 
B) the search process of matching workers with jobs. 
C) the ups and downs in inflation. 
D) a slowdown in the economy. 
A) a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs. 
B) the search process of matching workers with jobs. 
C) the ups and downs in inflation. 
D) a slowdown in the economy.

Question 5

What impact would including members of the military in employment,labor force,and working-age population statistics have on the unemployment rate and the labor force participation rate?

Accepted Answer

A) Including members of the military would increase the unemployment rate and reduce the labor force participation rate. 
B) Including members of the military would reduce the unemployment rate and increase the labor force participation rate. 
C) Including the military would increase both the unemployment rate and the labor force participation rate. 
D) Including the military would reduce both the unemployment rate and the labor force participation rate. 
A) Including members of the military would increase the unemployment rate and reduce the labor force participation rate. 
B) Including members of the military would reduce the unemployment rate and increase the labor force participation rate. 
C) Including the military would increase both the unemployment rate and the labor force participation rate. 
D) Including the military would reduce both the unemployment rate and the labor force participation rate.

Question 6

Between 2013 and 2014,the CPI of a small nation rose from 182 to 185.If household incomes rose by 3% during that period of time,which of the following is true?

Accepted Answer

A) The purchasing power of household income rose between 2013 and 2014. 
B) The purchasing power of household income fell between 2013 and 2014. 
C) The purchasing power of household income remained constant between 2013 and 2014. 
D) The CPI cannot be used to determine how the purchasing power of household income changes over time. 
A) The purchasing power of household income rose between 2013 and 2014. 
B) The purchasing power of household income fell between 2013 and 2014. 
C) The purchasing power of household income remained constant between 2013 and 2014. 
D) The CPI cannot be used to determine how the purchasing power of household income changes over time.

Question 7

Real interest rates at times have been negative.Why would anyone lending money agree to a negative real interest rate?

Accepted Answer

The lender did not agree to a negative r

Question 8

Table 13-13
 $$\begin{array} { | l | c | c | c | c | } 
\hline & & \text { Base Year } & & \
\cline { 3 - 5 } \text { Product } & \text { Quantity } & \text { Price (2001) } & \text { Price (2012) } & \text { Price (2013) } \
\hline \text { Tacos } & 5 & \$ 1.50 & \$ 2.00 & \$ 2.25 \
\hline \text { Earplugs } & 10 & 6.00 & 7.50 & 7.00 \
\hline \text { Toothbrushes } & 3 & 2.50 & 3.50 & 3.50 \
\hline
\end{array}$$
-Refer to Table 13-13.Consider a simple economy that produces only three products: tacos,earplugs,and toothbrushes.Use the information in the table to calculate the inflation rate for 2013,as measured by the consumer price index.

Accepted Answer

Total expenditures for 2001 = (5 × $1.50

Question 9

The real wage equals the nominal wage ________ the CPI,all times 100.

Accepted Answer

A) divided by 
B) times 
C) minus 
D) plus 
A) divided by 
B) times 
C) minus 
D) plus

Question 10

Jack just told his boss that he thinks his boss is an idiot.It is likely that Jack will be experiencing ________ unemployment in the near future.

Accepted Answer

A) permanent 
B) cyclical 
C) frictional 
D) structural 
A) permanent 
B) cyclical 
C) frictional 
D) structural

Question 11

When prices are rising,which of the following will be true?

Accepted Answer

A) The real interest rate will be lower than the nominal interest rate. 
B) The real interest rate will be negative. 
C) The real interest rate will be higher than the nominal interest rate. 
D) The nominal interest rate will be negative. 
A) The real interest rate will be lower than the nominal interest rate. 
B) The real interest rate will be negative. 
C) The real interest rate will be higher than the nominal interest rate. 
D) The nominal interest rate will be negative.

Question 12

Which of the following statements is true about the U.S.economy?

Accepted Answer

A) Each year, many new jobs are created, but few existing jobs are destroyed, and the unemployed find jobs quickly. 
B) Each year, few new jobs are created, but few existing jobs are destroyed, keeping unemployment low. 
C) Each year, many new jobs are created and many existing jobs are destroyed. 
D) Each year few jobs are created, and therefore it takes the unemployed a long time to find a new job. 
A) Each year, many new jobs are created, but few existing jobs are destroyed, and the unemployed find jobs quickly. 
B) Each year, few new jobs are created, but few existing jobs are destroyed, keeping unemployment low. 
C) Each year, many new jobs are created and many existing jobs are destroyed. 
D) Each year few jobs are created, and therefore it takes the unemployed a long time to find a new job.

Question 13

Inflation that is ________ than what is expected benefits ________ and hurts ________.

Accepted Answer

A) less; lenders; borrowers 
B) less; borrowers; lenders 
C) greater; lenders; borrowers 
D) greater; lenders; no one 
A) less; lenders; borrowers 
B) less; borrowers; lenders 
C) greater; lenders; borrowers 
D) greater; lenders; no one

Question 14

Describe how inflation can be costly even if it is anticipated.

Accepted Answer

First,there will be redistribution as so

Question 15

Why does the substitution bias cause the consumer price index to overstate inflation and the cost of living? Why does the increase in quality bias cause the consumer price index to overstate inflation and the cost of living?

Accepted Answer

The substitution bias causes the CPI to

Question 16

Imagine that you borrow $5,000 for one year and at the end of the year you repay the $5,000 plus $600 of interest.If the inflation rate was 4%,what was the real interest rate you paid?

Accepted Answer

A) 16 percent 
B) 12 percent 
C) 8 percent 
D) 6 percent 
A) 16 percent 
B) 12 percent 
C) 8 percent 
D) 6 percent

Question 17

The stated interest rate on a loan is the

Accepted Answer

A) real interest rate. 
B) nominal interest rate. 
C) actual inflation rate. 
D) expected inflation rate. 
A) real interest rate. 
B) nominal interest rate. 
C) actual inflation rate. 
D) expected inflation rate.

Question 18

Unemployment caused by a business cycle recession is called cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 19

The unemployment rate tends to be higher in the European Union as compared to the United States.

Accepted Answer

A) True 
 B)False

Question 20

The CPI is also referred to as

Accepted Answer

A) the GDP deflator. 
B) the inflation-consumption index. 
C) the cost-of-living index. 
D) the producer price index. 
A) the GDP deflator. 
B) the inflation-consumption index. 
C) the cost-of-living index. 
D) the producer price index.

The PPI is the

You agree to lend $1,000 for one year at a nominal interest rate of 10%.You anticipate that inflation will be 4% over that year.If inflation is instead 3% over that year,which of the following is true?

The average price of goods and services in the economy is also known as

Structural unemployment is the result of

What impact would including members of the military in employment,labor force,and working-age population statistics have on the unemployment rate and the labor force participation rate?

Between 2013 and 2014,the CPI of a small nation rose from 182 to 185.If household incomes rose by 3% during that period of time,which of the following is true?

Real interest rates at times have been negative.Why would anyone lending money agree to a negative real interest rate?

The real wage equals the nominal wage ________ the CPI,all times 100.

Jack just told his boss that he thinks his boss is an idiot.It is likely that Jack will be experiencing ________ unemployment in the near future.

When prices are rising,which of the following will be true?

Which of the following statements is true about the U.S.economy?

Inflation that is than what is expected benefits and hurts .

Describe how inflation can be costly even if it is anticipated.

Why does the substitution bias cause the consumer price index to overstate inflation and the cost of living? Why does the increase in quality bias cause the consumer price index to overstate inflation and the cost of living?

Imagine that you borrow $5,000 for one year and at the end of the year you repay the $5,000 plus $600 of interest.If the inflation rate was 4%,what was the real interest rate you paid?

The stated interest rate on a loan is the

Unemployment caused by a business cycle recession is called cyclical unemployment.

The unemployment rate tends to be higher in the European Union as compared to the United States.

The CPI is also referred to as

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 13: Unemployment and Inflation

The PPI is the

You agree to lend $1,000 for one year at a nominal interest rate of 10%.You anticipate that inflation will be 4% over that year.If inflation is instead 3% over that year,which of the following is true?

The average price of goods and services in the economy is also known as

Structural unemployment is the result of

What impact would including members of the military in employment,labor force,and working-age population statistics have on the unemployment rate and the labor force participation rate?

Between 2013 and 2014,the CPI of a small nation rose from 182 to 185.If household incomes rose by 3% during that period of time,which of the following is true?

Real interest rates at times have been negative.Why would anyone lending money agree to a negative real interest rate?

The real wage equals the nominal wage ________ the CPI,all times 100.

Jack just told his boss that he thinks his boss is an idiot.It is likely that Jack will be experiencing ________ unemployment in the near future.

When prices are rising,which of the following will be true?

Which of the following statements is true about the U.S.economy?

Inflation that is ________ than what is expected benefits ________ and hurts ________.

Describe how inflation can be costly even if it is anticipated.

Why does the substitution bias cause the consumer price index to overstate inflation and the cost of living? Why does the increase in quality bias cause the consumer price index to overstate inflation and the cost of living?

Imagine that you borrow $5,000 for one year and at the end of the year you repay the $5,000 plus $600 of interest.If the inflation rate was 4%,what was the real interest rate you paid?

The stated interest rate on a loan is the

Unemployment caused by a business cycle recession is called cyclical unemployment.

The unemployment rate tends to be higher in the European Union as compared to the United States.

The CPI is also referred to as

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Inflation that is than what is expected benefits and hurts .