Question 1

If the duration of unemployment in a country increases from 16 weeks to 18 weeks, then

Accepted Answer

A) the unemployment rate will decrease. 
B) the unemployment rate will increase. 
C) the size of the labor force will increase. 
D) the size of the labor force will decrease. 
A) the unemployment rate will decrease. 
B) the unemployment rate will increase. 
C) the size of the labor force will increase. 
D) the size of the labor force will decrease.

Question 2

The real rate of interest equals 5% and the expected rate of inflation equals 2%. The nominal rate of interest equals

Accepted Answer

A) 2%. 
B) 3%. 
C) 5%. 
D) 7%. 
A) 2%. 
B) 3%. 
C) 5%. 
D) 7%.

Question 3

Changes in leading indicators signal

Accepted Answer

A) the changes in the frictional and seasonal unemployment rate. 
B) the changes that will occur in the economy. 
C) the changes in the frictional unemployment rate and the changes in the inflation rate. 
D) the changes in the market basket. 
A) the changes in the frictional and seasonal unemployment rate. 
B) the changes that will occur in the economy. 
C) the changes in the frictional unemployment rate and the changes in the inflation rate. 
D) the changes in the market basket.

Question 4

-Refer to the above table. You are given information on Jasmin's consumption for 2005 and 2015. Using 2005 as the base year compute the price index for 2015. The index equals

Accepted Answer

A) 0.75. 
B) 73.007. 
C) 87.50. 
D) 136.842. 
A) 0.75. 
B) 73.007. 
C) 87.50. 
D) 136.842.

Question 5

Suppose that unemployment increases because the government requires employers to provide more funds for their employees' retirement programs. The increase in unemployment is most likely a result of an increase in

Accepted Answer

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

Question 6

Unemployment due to the fact that workers have difficulty in the search for appropriate job offers is

Accepted Answer

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

Question 7

How has the pattern of movements in the U.S. price level changed since World War II?

Accepted Answer

A) Periods of inflation have largely been eliminated. 
B) Periods of deflation have largely been eliminated. 
C) The annual rate of inflation has never risen above 3 percent. 
D) The price level has become more volatile. 
A) Periods of inflation have largely been eliminated. 
B) Periods of deflation have largely been eliminated. 
C) The annual rate of inflation has never risen above 3 percent. 
D) The price level has become more volatile.

Question 8

When the economy is experiencing a contraction, there is an increase in

Accepted Answer

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

Question 9

Many economists would argue that some frictional unemployment

Accepted Answer

A) creates massive economic disruptions and should be eliminated as quickly as feasible. 
B) should be eliminated whatever the cost. 
C) no longer exists because increased unemployment benefits have generally solved this problem. 
D) cannot and probably should not be eliminated. 
A) creates massive economic disruptions and should be eliminated as quickly as feasible. 
B) should be eliminated whatever the cost. 
C) no longer exists because increased unemployment benefits have generally solved this problem. 
D) cannot and probably should not be eliminated.

Question 10

The definition of a job loser is an individual

Accepted Answer

A) who quits his job voluntarily. 
B) whose employment was terminated involuntarily due to a downturn in the economy. 
C) who competed for a promotion at his company and did not get it. 
D) who is underemployed. 
A) who quits his job voluntarily. 
B) whose employment was terminated involuntarily due to a downturn in the economy. 
C) who competed for a promotion at his company and did not get it. 
D) who is underemployed.

Question 11

Distinguishing between stock measures and flow measures, the flow measures are

Accepted Answer

A) the labor force only. 
B) the number of people who lost their jobs and the number of people who found jobs only. 
C) the total number of people who are unemployed only. 
D) the total number in the labor force and the total number of people who are unemployed only. 
A) the labor force only. 
B) the number of people who lost their jobs and the number of people who found jobs only. 
C) the total number of people who are unemployed only. 
D) the total number in the labor force and the total number of people who are unemployed only.

Question 12

-In the table shown above, the total cost of the market basket in 2010 was

Accepted Answer

A) $6.00. 
B) $8.50. 
C) $60.00. 
D) $85.00. 
A) $6.00. 
B) $8.50. 
C) $60.00. 
D) $85.00.

Question 13

A price index shows

Accepted Answer

A) the current cost of a basket of goods. 
B) the relative price of necessities. 
C) the price of goods in the future. 
D) the cost of today's goods expressed in terms of the cost of goods in a base year. 
A) the current cost of a basket of goods. 
B) the relative price of necessities. 
C) the price of goods in the future. 
D) the cost of today's goods expressed in terms of the cost of goods in a base year.

Question 14

Robert received a $100 gift certificate to a bookstore a year ago. The economy has been in an inflationary period for the last year. This gift certificate is

Accepted Answer

A) expressed in real terms and is worth more. 
B) expressed in nominal terms and is worth less. 
C) not expressed in either real or nominal terms since it is not money. 
D) adjusted in terms of the CPI. 
A) expressed in real terms and is worth more. 
B) expressed in nominal terms and is worth less. 
C) not expressed in either real or nominal terms since it is not money. 
D) adjusted in terms of the CPI.

Question 15

The year that is chosen as the point of reference for comparison of prices in other years is known as the

Accepted Answer

A) base year. 
B) price index. 
C) purchasing power. 
D) consumer price index. 
A) base year. 
B) price index. 
C) purchasing power. 
D) consumer price index.

Question 16

The real rate of interest can be defined as the

Accepted Answer

A) nominal interest rate less the anticipated rate of inflation. 
B) anticipated rate of inflation less the nominal interest rate. 
C) the market rate of interest expressed in today's dollars. 
D) nominal rate of interest less the unanticipated rate of inflation. 
A) nominal interest rate less the anticipated rate of inflation. 
B) anticipated rate of inflation less the nominal interest rate. 
C) the market rate of interest expressed in today's dollars. 
D) nominal rate of interest less the unanticipated rate of inflation.

Question 17

Who is considered officially unemployed?

Accepted Answer

A) Six months after failing to get a job, Abba quit looking. 
B) Monica graduated from college last summer but is still unemployed despite her spirited search. 
C) Kariuki is a retired teacher. 
D) Chen is going to school full time. 
A) Six months after failing to get a job, Abba quit looking. 
B) Monica graduated from college last summer but is still unemployed despite her spirited search. 
C) Kariuki is a retired teacher. 
D) Chen is going to school full time.

Question 18

The price index for any designated base year must always equal

Accepted Answer

A) the CPI for that year. 
B) 0. 
C) 100. 
D) one divided by the nominal price change for the year. 
A) the CPI for that year. 
B) 0. 
C) 100. 
D) one divided by the nominal price change for the year.

Question 19

Annie had a job as a human resource manager of a restaurant chain that went out of business due to a downturn in the economy. This is an example of

Accepted Answer

A) cyclical unemployment. 
B) structural unemployment. 
C) seasonal unemployment. 
D) technological unemployment. 
A) cyclical unemployment. 
B) structural unemployment. 
C) seasonal unemployment. 
D) technological unemployment.

Question 20

An automatic increase in a wage rate found in some contracts is known as a

Accepted Answer

A) change of labor agreement. 
B) cost of labor arrangement. 
C) cost of living adjustment. 
D) charge for living amendment. 
A) change of labor agreement. 
B) cost of labor arrangement. 
C) cost of living adjustment. 
D) charge for living amendment.

If the duration of unemployment in a country increases from 16 weeks to 18 weeks, then

The real rate of interest equals 5% and the expected rate of inflation equals 2%. The nominal rate of interest equals

Changes in leading indicators signal

-Refer to the above table. You are given information on Jasmin's consumption for 2005 and 2015. Using 2005 as the base year compute the price index for 2015. The index equals

Suppose that unemployment increases because the government requires employers to provide more funds for their employees' retirement programs. The increase in unemployment is most likely a result of an increase in

Unemployment due to the fact that workers have difficulty in the search for appropriate job offers is

How has the pattern of movements in the U.S. price level changed since World War II?

When the economy is experiencing a contraction, there is an increase in

Many economists would argue that some frictional unemployment

The definition of a job loser is an individual

Distinguishing between stock measures and flow measures, the flow measures are

-In the table shown above, the total cost of the market basket in 2010 was

A price index shows

Robert received a $100 gift certificate to a bookstore a year ago. The economy has been in an inflationary period for the last year. This gift certificate is

The year that is chosen as the point of reference for comparison of prices in other years is known as the

The real rate of interest can be defined as the

Who is considered officially unemployed?

The price index for any designated base year must always equal

Annie had a job as a human resource manager of a restaurant chain that went out of business due to a downturn in the economy. This is an example of

An automatic increase in a wage rate found in some contracts is known as a

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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Exam 7: The Macroeconomy: Unemployment, Inflation, and Deflation

If the duration of unemployment in a country increases from 16 weeks to 18 weeks, then

The real rate of interest equals 5% and the expected rate of inflation equals 2%. The nominal rate of interest equals

Changes in leading indicators signal

-Refer to the above table. You are given information on Jasmin's consumption for 2005 and 2015. Using 2005 as the base year compute the price index for 2015. The index equals

Suppose that unemployment increases because the government requires employers to provide more funds for their employees' retirement programs. The increase in unemployment is most likely a result of an increase in

Unemployment due to the fact that workers have difficulty in the search for appropriate job offers is

How has the pattern of movements in the U.S. price level changed since World War II?

When the economy is experiencing a contraction, there is an increase in

Many economists would argue that some frictional unemployment

The definition of a job loser is an individual

Distinguishing between stock measures and flow measures, the flow measures are

-In the table shown above, the total cost of the market basket in 2010 was

A price index shows

Robert received a $100 gift certificate to a bookstore a year ago. The economy has been in an inflationary period for the last year. This gift certificate is

The year that is chosen as the point of reference for comparison of prices in other years is known as the

The real rate of interest can be defined as the

Who is considered officially unemployed?

The price index for any designated base year must always equal

Annie had a job as a human resource manager of a restaurant chain that went out of business due to a downturn in the economy. This is an example of

An automatic increase in a wage rate found in some contracts is known as a

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters