Question 1

The natural rate of unemployment does NOT include which of the following?

Accepted Answer

A) cyclical unemployment 
B) frictional unemployment 
C) seasonal unemployment 
D) all of the above 
A) cyclical unemployment 
B) frictional unemployment 
C) seasonal unemployment 
D) all of the above

Question 2

When economy-wide business fluctuations are negative, they are referred to as

Accepted Answer

A) contractions/recessions. 
B) booms. 
C) expansions. 
D) peaks. 
A) contractions/recessions. 
B) booms. 
C) expansions. 
D) peaks.

Question 3

Unanticipated positive inflation

Accepted Answer

A) hurts everyone. 
B) hurts creditors. 
C) hurts debtors. 
D) benefits banks. 
A) hurts everyone. 
B) hurts creditors. 
C) hurts debtors. 
D) benefits banks.

Question 4

Changes in business activity are

Accepted Answer

A) referred to as business fluctuations. 
B) referred to as the ebb and flow of business. 
C) always undesirable. 
D) caused by the changing seasons every year. 
A) referred to as business fluctuations. 
B) referred to as the ebb and flow of business. 
C) always undesirable. 
D) caused by the changing seasons every year.

Question 5

The labor force is defined as the number of

Accepted Answer

A) employed plus the number of unemployed. 
B) people who are working. 
C) people who are working in labor-type jobs. 
D) union members who are working. 
A) employed plus the number of unemployed. 
B) people who are working. 
C) people who are working in labor-type jobs. 
D) union members who are working.

Question 6

A decline in business activity is called

Accepted Answer

A) a recession. 
B) a trough. 
C) an expansion. 
D) a peak. 
A) a recession. 
B) a trough. 
C) an expansion. 
D) a peak.

Question 7

Assume that the current price of a market basket of goods is $2,500 and the base year price of the same market basket is $1,340. The price index is

Accepted Answer

A) 53.6. 
B) 40.0. 
C) 138.3. 
D) 186.6. 
A) 53.6. 
B) 40.0. 
C) 138.3. 
D) 186.6.

Question 8

Costs of unemployment include

Accepted Answer

A) structural unemployment. 
B) the output lost due to the fact that the economy is not running at full employment. 
C) reduction in the labor force. 
D) higher wages. 
A) structural unemployment. 
B) the output lost due to the fact that the economy is not running at full employment. 
C) reduction in the labor force. 
D) higher wages.

Question 9

Which of the following is NOT a criticism of the CPI?

Accepted Answer

A) The CPI does not account for the way consumer substitute less expensive items for higher priced items. 
B) The CPI ignores changes in consumption patterns that occur between years in which it revises the index. 
C) The CPI ignores successful new products until long after they have been introduced. 
D) The CPI ignores the changes of prices of goods that firms produce and sell to each other. 
A) The CPI does not account for the way consumer substitute less expensive items for higher priced items. 
B) The CPI ignores changes in consumption patterns that occur between years in which it revises the index. 
C) The CPI ignores successful new products until long after they have been introduced. 
D) The CPI ignores the changes of prices of goods that firms produce and sell to each other.

Question 10

The Producer Price Index (PPI)is a

Accepted Answer

A) statistical measure of a weighted average of prices of a specific set of goods and services purchased by wage earners in urban areas. 
B) statistical measure of a weighted average of prices of commodities that firms produce and sell. 
C) price index measuring the changes in prices of all new goods and services produced in the economy. 
D) price index that tracks the price levee of commodities that firms purchase from other firms. 
A) statistical measure of a weighted average of prices of a specific set of goods and services purchased by wage earners in urban areas. 
B) statistical measure of a weighted average of prices of commodities that firms produce and sell. 
C) price index measuring the changes in prices of all new goods and services produced in the economy. 
D) price index that tracks the price levee of commodities that firms purchase from other firms.

Question 11

What is the business cycle?
 How "cyclical" is it?
 What causes the business cycle?

Accepted Answer

The business cycle refers to the ups and

Question 12

A reentrant is an individual

Accepted Answer

A) in the labor force whose employment was involuntarily terminated. 
B) who used to work full time but left the labor force and has now reentered it looking for a job. 
C) in the labor force who quits voluntarily. 
D) who has never held a full-time job lasting two weeks or longer but is now seeking employment. 
A) in the labor force whose employment was involuntarily terminated. 
B) who used to work full time but left the labor force and has now reentered it looking for a job. 
C) in the labor force who quits voluntarily. 
D) who has never held a full-time job lasting two weeks or longer but is now seeking employment.

The natural rate of unemployment does NOT include which of the following?

When economy-wide business fluctuations are negative, they are referred to as

Unanticipated positive inflation

Changes in business activity are

The labor force is defined as the number of

A decline in business activity is called

Assume that the current price of a market basket of goods is $2,500 and the base year price of the same market basket is $1,340. The price index is

Costs of unemployment include

Which of the following is NOT a criticism of the CPI?

The Producer Price Index (PPI)is a

What is the business cycle? How "cyclical" is it? What causes the business cycle?

A reentrant is an individual

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

The natural rate of unemployment does NOT include which of the following?

When economy-wide business fluctuations are negative, they are referred to as

Unanticipated positive inflation

Changes in business activity are

The labor force is defined as the number of

A decline in business activity is called

Assume that the current price of a market basket of goods is $2,500 and the base year price of the same market basket is $1,340. The price index is

Costs of unemployment include

Which of the following is NOT a criticism of the CPI?

The Producer Price Index (PPI)is a

What is the business cycle? How "cyclical" is it? What causes the business cycle?

A reentrant is an individual

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