Question 1

Which of the following is an example of a worker experiencing cyclical unemployment?

Accepted Answer

A)  A worker that changes jobs to move closer her family. 
B)  An assembly line worker who loses his job because of automation. 
C)  A freightliner employee that got laid off because of the recession of 2007-2009. 
D)  A lifeguard who was hired during the summer season is laid off after summer is over. 
E)  A worker quits his job because he does not get along with his boss. 
A)  A worker that changes jobs to move closer her family. 
B)  An assembly line worker who loses his job because of automation. 
C)  A freightliner employee that got laid off because of the recession of 2007-2009. 
D)  A lifeguard who was hired during the summer season is laid off after summer is over. 
E)  A worker quits his job because he does not get along with his boss.

Question 2

If your nominal wage rises more slowly than the price level,we can say your real wage has ________ and the purchasing power of a dollar has ________.

Accepted Answer

A)  fallen; fallen 
B)  fallen; risen 
C)  risen; risen 
D)  risen; fallen 
A)  fallen; fallen 
B)  fallen; risen 
C)  risen; risen 
D)  risen; fallen

Question 3

The labor force participation rates of men have gradually increased since 1948.

Accepted Answer

A) True 
 B)False

Question 4

Describe how a lender can lose during inflation if the inflation is unanticipated and the loan is a fixed-interest-rate loan.How would a variable-interest-rate loan (one that adjusts over the contract period)eliminate these loses?

Accepted Answer

Lenders require compensation for inflati

Question 5

There are no costs to inflation if it is fully anticipated.

Accepted Answer

A) True 
 B)False

Question 6

What are menu costs?

Accepted Answer

A)  the full list of a firm's costs of production 
B)  the costs to a firm of changing prices 
C)  the cost to a household of borrowing money when there is deflation 
D)  the opportunity cost of dining in a restaurant instead of at home 
A)  the full list of a firm's costs of production 
B)  the costs to a firm of changing prices 
C)  the cost to a household of borrowing money when there is deflation 
D)  the opportunity cost of dining in a restaurant instead of at home

Question 7

Deflation occurs when

Accepted Answer

A)  there is a sustained increase in the price level. 
B)  there is a one-time increase in the price level. 
C)  there is a decline in the price level. 
D)  there is a decrease in the expected rate of inflation. 
A)  there is a sustained increase in the price level. 
B)  there is a one-time increase in the price level. 
C)  there is a decline in the price level. 
D)  there is a decrease in the expected rate of inflation.

Question 8

How would the unemployment rate and the labor force participation rate change if discouraged workers were counted as unemployed rather than counted as out of the labor force? Show using the formula for both measurements.

Accepted Answer

The unemployment rate is calculated as:

Question 9

What is outlet bias?

Accepted Answer

A)  the tendency for households to spend more money over time 
B)  the tendency for households to spend their money at discount stores as prices rise 
C)  the tendency for the quality of products to improve over time even though the CPI does not measure changes in quality 
D)  the tendency for consumers to purchase newer, more technologically advanced products even though they have higher prices 
A)  the tendency for households to spend more money over time 
B)  the tendency for households to spend their money at discount stores as prices rise 
C)  the tendency for the quality of products to improve over time even though the CPI does not measure changes in quality 
D)  the tendency for consumers to purchase newer, more technologically advanced products even though they have higher prices

Question 10

For the last few decades,the labor force participation rates of men have ________,and the labor force participation rates of women have ________.

Accepted Answer

A)  risen; risen 
B)  fallen; fallen 
C)  risen; fallen 
D)  fallen; risen 
A)  risen; risen 
B)  fallen; fallen 
C)  risen; fallen 
D)  fallen; risen

Question 11

The equilibrium wage in a local labor market is $6 per hour.If a minimum wage of $8 per hour is imposed,which of the following will occur?

Accepted Answer

A)  There will be an increase in unemployment. 
B)  There will be an increase in the quantity of labor demanded by firms. 
C)  There will be a decrease in the quantity of labor supplied by households. 
D)  All of the above will occur. 
A)  There will be an increase in unemployment. 
B)  There will be an increase in the quantity of labor demanded by firms. 
C)  There will be a decrease in the quantity of labor supplied by households. 
D)  All of the above will occur.

Question 12

During the month of May,10 million workers moved from being classified as "unemployed" to being classified as "employed." As a result,

Accepted Answer

A)  the unemployment rate rose. 
B)  the labor force participation rate fell. 
C)  the unemployment rate fell. 
D)  the labor force participation rate rose. 
A)  the unemployment rate rose. 
B)  the labor force participation rate fell. 
C)  the unemployment rate fell. 
D)  the labor force participation rate rose.

Question 13

During a deflationary period,

Accepted Answer

A)  the nominal interest rate is less than the real interest rate. 
B)  the real interest rate is less than the nominal interest rate. 
C)  the price level rises. 
D)  the nominal interest rate does not change. 
A)  the nominal interest rate is less than the real interest rate. 
B)  the real interest rate is less than the nominal interest rate. 
C)  the price level rises. 
D)  the nominal interest rate does not change.

Question 14

Which of the following has a tendency to raise the unemployment rate?

Accepted Answer

A)  implementing a minimum wage in an economy 
B)  reducing unemployment insurance in an economy 
C)  offering wages at the market-clearing rate 
D)  reducing labor unions membership in an economy 
A)  implementing a minimum wage in an economy 
B)  reducing unemployment insurance in an economy 
C)  offering wages at the market-clearing rate 
D)  reducing labor unions membership in an economy

Question 15

If you want to earn a real interest rate of 3% on money you lend,and you expect that inflation will be 2%,what nominal rate of interest will you charge?

Accepted Answer

A)  1% 
B)  5% 
C)  6% 
D)  9% 
A)  1% 
B)  5% 
C)  6% 
D)  9%

Question 16

Which of the following is not a cost posed by inflation?

Accepted Answer

A)  Inflation reduces the affordability of goods and services to the average consumer. 
B)  The money that consumers and firms hold loses its purchasing power. 
C)  Firms must pay for changing prices on products and printing new catalogs. 
D)  Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation. 
A)  Inflation reduces the affordability of goods and services to the average consumer. 
B)  The money that consumers and firms hold loses its purchasing power. 
C)  Firms must pay for changing prices on products and printing new catalogs. 
D)  Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation.

Question 17

If the number employed is 190 million,the working-age population is 230 million,and the number unemployed is 10 million,then the unemployment rate is

Accepted Answer

A)  5%. 
B)  5.2%. 
C)  8%. 
D)  10%. 
E)  50%. 
A)  5%. 
B)  5.2%. 
C)  8%. 
D)  10%. 
E)  50%.

Question 18

Table 20-12
  
-Refer to Table 20-12.The table above lists the actual minimum wage and CPI in 1974 and in 2010.Using the above table,calculate the real minimum wage for 1974 and 2010.Calculate the rate of growth of the real minimum wage from 1974 to 2010.Are workers better off in terms of the purchasing power of a dollar in 1974 or 2010? Explain why.

Accepted Answer

The real minimum wage in 1974 is @#IMG-DLM& × 100

Question 19

Which of the following do not suffer the costs of inflation?

Accepted Answer

A)  persons on fixed incomes 
B)  persons whose incomes rise more rapidly than inflation 
C)  firms that have to devote more time and labor to raising prices 
D)  an investor that has to pay higher taxes because of the inflation 
A)  persons on fixed incomes 
B)  persons whose incomes rise more rapidly than inflation 
C)  firms that have to devote more time and labor to raising prices 
D)  an investor that has to pay higher taxes because of the inflation

Question 20

Workers laid off as a result of a recession suffer

Accepted Answer

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

Which of the following is an example of a worker experiencing cyclical unemployment?

If your nominal wage rises more slowly than the price level,we can say your real wage has and the purchasing power of a dollar has .

The labor force participation rates of men have gradually increased since 1948.

Describe how a lender can lose during inflation if the inflation is unanticipated and the loan is a fixed-interest-rate loan.How would a variable-interest-rate loan (one that adjusts over the contract period)eliminate these loses?

There are no costs to inflation if it is fully anticipated.

What are menu costs?

Deflation occurs when

How would the unemployment rate and the labor force participation rate change if discouraged workers were counted as unemployed rather than counted as out of the labor force? Show using the formula for both measurements.

What is outlet bias?

For the last few decades,the labor force participation rates of men have ,and the labor force participation rates of women have .

The equilibrium wage in a local labor market is $6 per hour.If a minimum wage of $8 per hour is imposed,which of the following will occur?

During the month of May,10 million workers moved from being classified as "unemployed" to being classified as "employed." As a result,

During a deflationary period,

Which of the following has a tendency to raise the unemployment rate?

If you want to earn a real interest rate of 3% on money you lend,and you expect that inflation will be 2%,what nominal rate of interest will you charge?

Which of the following is not a cost posed by inflation?

If the number employed is 190 million,the working-age population is 230 million,and the number unemployed is 10 million,then the unemployment rate is

Which of the following do not suffer the costs of inflation?

Workers laid off as a result of a recession suffer

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 9: Unemployment and Inflation

Which of the following is an example of a worker experiencing cyclical unemployment?

If your nominal wage rises more slowly than the price level,we can say your real wage has ________ and the purchasing power of a dollar has ________.

The labor force participation rates of men have gradually increased since 1948.

Describe how a lender can lose during inflation if the inflation is unanticipated and the loan is a fixed-interest-rate loan.How would a variable-interest-rate loan (one that adjusts over the contract period)eliminate these loses?

There are no costs to inflation if it is fully anticipated.

What are menu costs?

Deflation occurs when

How would the unemployment rate and the labor force participation rate change if discouraged workers were counted as unemployed rather than counted as out of the labor force? Show using the formula for both measurements.

What is outlet bias?

For the last few decades,the labor force participation rates of men have ________,and the labor force participation rates of women have ________.

The equilibrium wage in a local labor market is $6 per hour.If a minimum wage of $8 per hour is imposed,which of the following will occur?

During the month of May,10 million workers moved from being classified as "unemployed" to being classified as "employed." As a result,

During a deflationary period,

Which of the following has a tendency to raise the unemployment rate?

If you want to earn a real interest rate of 3% on money you lend,and you expect that inflation will be 2%,what nominal rate of interest will you charge?

Which of the following is not a cost posed by inflation?

If the number employed is 190 million,the working-age population is 230 million,and the number unemployed is 10 million,then the unemployment rate is

Which of the following do not suffer the costs of inflation?

Workers laid off as a result of a recession suffer

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

If your nominal wage rises more slowly than the price level,we can say your real wage has and the purchasing power of a dollar has .

For the last few decades,the labor force participation rates of men have ,and the labor force participation rates of women have .