Question 1

A sustained decrease in the average of all prices of goods and services in the economy is known as

Accepted Answer

A) inflation. 
B) disinflation. 
C) deflation. 
D) hyperinflation. 
A) inflation. 
B) disinflation. 
C) deflation. 
D) hyperinflation.

Question 2

The cost of inflation to society includes I. The opportunity costs of resources used by people to protect themselves against inflation
II. The costs associated with recalculating prices

Accepted Answer

A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II 
A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II

Question 3

An example of a frictionally unemployed individual is

Accepted Answer

A) Charles, who has lost his job as an auto worker because of increased imports. 
B) Mary, who quit her job to find work closer to her home. 
C) Sam, who lost his job as a real estate salesperson when the housing market went soft. 
D) Cynthia, who has few skills and is no longer looking for work. 
A) Charles, who has lost his job as an auto worker because of increased imports. 
B) Mary, who quit her job to find work closer to her home. 
C) Sam, who lost his job as a real estate salesperson when the housing market went soft. 
D) Cynthia, who has few skills and is no longer looking for work.

Question 4

A period in which the level of business is consistently less than its long-term trend is known as

Accepted Answer

A) depression. 
B) recession. 
C) business cycle. 
D) growth trend. 
A) depression. 
B) recession. 
C) business cycle. 
D) growth trend.

Question 5

Reductions in employment in the U.S. auto industry caused by the increased adoption of new technologies to produce cars more efficiently is an example of

Accepted Answer

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

Question 6

If a person loses her job because her abilities and skills are a poor match with current requirements of employers, this person is considered

Accepted Answer

A) structurally unemployed. 
B) frictionally unemployed. 
C) a discouraged worker. 
D) seasonally unemployed. 
A) structurally unemployed. 
B) frictionally unemployed. 
C) a discouraged worker. 
D) seasonally unemployed.

Question 7

Which of the following statements about full employment is correct?
I. Full employment means that the unemployment rate is less than 1/2 of 1 percent.
II. Full employment means that the transaction costs associated with getting a job are zero.

Accepted Answer

A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II 
A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II

Question 8

Unanticipated positive inflation will create

Accepted Answer

A) losses for creditors and gains for debtors. 
B) losses for both creditors and debtors. 
C) gains for both creditors and debtors. 
D) gains for creditors and losses for debtors. 
A) losses for creditors and gains for debtors. 
B) losses for both creditors and debtors. 
C) gains for both creditors and debtors. 
D) gains for creditors and losses for debtors.

Question 9

The relationship between the producer price index (PPI)and the consumer price index (CPI)is such that, in the short run

Accepted Answer

A) the CPI usually increases before the PPI. 
B) the CPI and the PPI usually move simultaneously. 
C) the PPI usually increases before the CPI. 
D) the CPI and the PPI usually move in opposite directions. 
A) the CPI usually increases before the PPI. 
B) the CPI and the PPI usually move simultaneously. 
C) the PPI usually increases before the CPI. 
D) the CPI and the PPI usually move in opposite directions.

Question 10

Who is likely to be helped by unanticipated inflation?

Accepted Answer

A) lenders 
B) borrowers 
C) all consumers 
D) all producers 
A) lenders 
B) borrowers 
C) all consumers 
D) all producers

Question 11

Fred recently lost his job as a teller at the bank. The bank explained that they were replacing Frank and others with ATM machines. Fred falls into a category of unemployment known as

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 12

Unemployment that results from a mismatch of workers' abilities and skills with current requirements of employers 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 13

Which of the following people would be considered unemployed assuming that they are actively seeking employment?

Accepted Answer

A) those who were fired from their job 
B) those who resigned from their job 
C) new entrants into the job market 
D) All of the above are correct. 
A) those who were fired from their job 
B) those who resigned from their job 
C) new entrants into the job market 
D) All of the above are correct.

Question 14

What is the definition of a discouraged worker?

Accepted Answer

A) a member of the labor force who is working but is discouraged about his prospects for advancement within the company 
B) a member of the labor force who is working but is discouraged about the performance of his company within the industry 
C) a person who has dropped out of the labor force because he is discouraged about his prospects for employment 
D) an employed member of the labor force who is discouraged about his pay 
A) a member of the labor force who is working but is discouraged about his prospects for advancement within the company 
B) a member of the labor force who is working but is discouraged about the performance of his company within the industry 
C) a person who has dropped out of the labor force because he is discouraged about his prospects for employment 
D) an employed member of the labor force who is discouraged about his pay

Question 15

What is meant by full employment?
 Why isn't the full employment rate zero?
 What causes frictional unemployment?

Accepted Answer

Full employment is the level of unemploy

Question 16

Which of the following statements is NOT true about inflation?

Accepted Answer

A) Inflation is a sustained increase in the average prices of goods in the economy. 
B) During an inflationary period, the prices of some goods will increase while the price of some goods will decrease. 
C) When there is inflation, the purchasing power of a dollar decreases. 
D) During an inflationary period, the prices of all goods will increase. 
A) Inflation is a sustained increase in the average prices of goods in the economy. 
B) During an inflationary period, the prices of some goods will increase while the price of some goods will decrease. 
C) When there is inflation, the purchasing power of a dollar decreases. 
D) During an inflationary period, the prices of all goods will increase.

Question 17

In 2014, some European countries were dealing with a recession. Workers who were laid off in those countries due to the economic downturn would be

Accepted Answer

A) frictionally unemployed. 
B) structurally unemployed. 
C) cyclically unemployed. 
D) seasonally unemployed. 
A) frictionally unemployed. 
B) structurally unemployed. 
C) cyclically unemployed. 
D) seasonally unemployed.

Question 18

The natural rate of unemployment is the rate of unemployment that

Accepted Answer

A) all workers and employers have fully adjusted to any changes in the economy. 
B) occurs when all workers find work in the economy. 
C) is an unrealistic goal set by policymakers. 
D) occurs when employers find more than one job applicant for each job available. 
A) all workers and employers have fully adjusted to any changes in the economy. 
B) occurs when all workers find work in the economy. 
C) is an unrealistic goal set by policymakers. 
D) occurs when employers find more than one job applicant for each job available.

Question 19

Unemployment is a ________ concept, measuring the ________.

Accepted Answer

A) flow; number of people who are first entering the labor force 
B) flow; number of people who lost their jobs within the last week 
C) stock; number of people who are not working 
D) stock; number of people at a point in time who are not working but who are looking for work 
A) flow; number of people who are first entering the labor force 
B) flow; number of people who lost their jobs within the last week 
C) stock; number of people who are not working 
D) stock; number of people at a point in time who are not working but who are looking for work

Question 20

Distinguishing between stock measures and flow measures of the labor force, the stock 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.

A sustained decrease in the average of all prices of goods and services in the economy is known as

The cost of inflation to society includes I. The opportunity costs of resources used by people to protect themselves against inflation II. The costs associated with recalculating prices

An example of a frictionally unemployed individual is

A period in which the level of business is consistently less than its long-term trend is known as

Reductions in employment in the U.S. auto industry caused by the increased adoption of new technologies to produce cars more efficiently is an example of

If a person loses her job because her abilities and skills are a poor match with current requirements of employers, this person is considered

Which of the following statements about full employment is correct? I. Full employment means that the unemployment rate is less than 1/2 of 1 percent. II. Full employment means that the transaction costs associated with getting a job are zero.

Unanticipated positive inflation will create

The relationship between the producer price index (PPI)and the consumer price index (CPI)is such that, in the short run

Who is likely to be helped by unanticipated inflation?

Fred recently lost his job as a teller at the bank. The bank explained that they were replacing Frank and others with ATM machines. Fred falls into a category of unemployment known as

Unemployment that results from a mismatch of workers' abilities and skills with current requirements of employers is

Which of the following people would be considered unemployed assuming that they are actively seeking employment?

What is the definition of a discouraged worker?

What is meant by full employment? Why isn't the full employment rate zero? What causes frictional unemployment?

Which of the following statements is NOT true about inflation?

In 2014, some European countries were dealing with a recession. Workers who were laid off in those countries due to the economic downturn would be

The natural rate of unemployment is the rate of unemployment that

Unemployment is a concept, measuring the .

Distinguishing between stock measures and flow measures of the labor force, the stock measures are

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

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

A sustained decrease in the average of all prices of goods and services in the economy is known as

The cost of inflation to society includes I. The opportunity costs of resources used by people to protect themselves against inflation II. The costs associated with recalculating prices

An example of a frictionally unemployed individual is

A period in which the level of business is consistently less than its long-term trend is known as

Reductions in employment in the U.S. auto industry caused by the increased adoption of new technologies to produce cars more efficiently is an example of

If a person loses her job because her abilities and skills are a poor match with current requirements of employers, this person is considered

Which of the following statements about full employment is correct? I. Full employment means that the unemployment rate is less than 1/2 of 1 percent. II. Full employment means that the transaction costs associated with getting a job are zero.

Unanticipated positive inflation will create

The relationship between the producer price index (PPI)and the consumer price index (CPI)is such that, in the short run

Who is likely to be helped by unanticipated inflation?

Fred recently lost his job as a teller at the bank. The bank explained that they were replacing Frank and others with ATM machines. Fred falls into a category of unemployment known as

Unemployment that results from a mismatch of workers' abilities and skills with current requirements of employers is

Which of the following people would be considered unemployed assuming that they are actively seeking employment?

What is the definition of a discouraged worker?

What is meant by full employment? Why isn't the full employment rate zero? What causes frictional unemployment?

Which of the following statements is NOT true about inflation?

In 2014, some European countries were dealing with a recession. Workers who were laid off in those countries due to the economic downturn would be

The natural rate of unemployment is the rate of unemployment that

Unemployment is a ________ concept, measuring the ________.

Distinguishing between stock measures and flow measures of the labor force, the stock measures are

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

Unemployment is a concept, measuring the .