Question 1

Seasonal unemployment is

Accepted Answer

A)  due to the fact that workers must search for appropriate job offers. 
B)  a result of a poor match of worker's abilities and skills with current requirements of employers. 
C)  a result of business recessions that occur when aggregate demand is insufficient to create full employment. 
D)  a result of the seasonal pattern of work in specific industries. 
A)  due to the fact that workers must search for appropriate job offers. 
B)  a result of a poor match of worker's abilities and skills with current requirements of employers. 
C)  a result of business recessions that occur when aggregate demand is insufficient to create full employment. 
D)  a result of the seasonal pattern of work in specific industries.

Question 2

An increase in inflation will cause a reduction in which of the following?

Accepted Answer

A)  the nominal value of money 
B)  the Producer Price Index 
C)  the GDP deflator 
D)  the real value of money 
A)  the nominal value of money 
B)  the Producer Price Index 
C)  the GDP deflator 
D)  the real value of money

Question 3

According to your text, during the 2000s, the inflation rate was in which range of percentages?

Accepted Answer

A)  0-5% 
B)  5-10% 
C)  10-15% 
D)  15-20% 
A)  0-5% 
B)  5-10% 
C)  10-15% 
D)  15-20%

Question 4

Unemployment is measured as

Accepted Answer

A)  all teens and adults in the civilian labor force who are not working. 
B)  all adults in the civilian labor force who are willing and able to work and who are actively looking for work, but have not found a job. 
C)  all adults in the civilian labor force, regardless of whether or not they have been engaged in actively seeking employment, who do not have the job they want. 
D)  all adults in the civilian labor force who are not working. 
A)  all teens and adults in the civilian labor force who are not working. 
B)  all adults in the civilian labor force who are willing and able to work and who are actively looking for work, but have not found a job. 
C)  all adults in the civilian labor force, regardless of whether or not they have been engaged in actively seeking employment, who do not have the job they want. 
D)  all adults in the civilian labor force who are not working.

Question 5

The duration of unemployment tends to rise when

Accepted Answer

A)  people leave their jobs rather than lose their jobs. 
B)  the number of entrants exceeds the number of reentrants. 
C)  business activity starts back up after a long period of decline. 
D)  business activity goes into a downturn. 
A)  people leave their jobs rather than lose their jobs. 
B)  the number of entrants exceeds the number of reentrants. 
C)  business activity starts back up after a long period of decline. 
D)  business activity goes into a downturn.

Question 6

Which government agency compiles the consumer price index?

Accepted Answer

A)  the Congressional Budget Office 
B)  the Government Accounting Office 
C)  the Bureau of Labor Statistics 
D)  It is not compiled by a government agency, but rather by an independent research institution called the Conference Board. 
A)  the Congressional Budget Office 
B)  the Government Accounting Office 
C)  the Bureau of Labor Statistics 
D)  It is not compiled by a government agency, but rather by an independent research institution called the Conference Board.

Question 7

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 8

The Personal Consumption Expenditure Index (PCE) 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)  statistical measure of average prices using annually updated weights based on surveys of consumer spending. 
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)  statistical measure of average prices using annually updated weights based on surveys of consumer spending.

Question 9

The official unemployment rate may understate the true rate of unemployment because of

Accepted Answer

A)  workers who hold two jobs. 
B)  increases in worker productivity. 
C)  changes in wage rates. 
D)  discouraged workers who no longer are actively seeking work and are excluded from the statistics. 
A)  workers who hold two jobs. 
B)  increases in worker productivity. 
C)  changes in wage rates. 
D)  discouraged workers who no longer are actively seeking work and are excluded from the statistics.

Question 10

-Refer to the above figure. At Point B, the actual unemployment rate

Accepted Answer

A)  will decrease over time. 
B)  is negative. 
C)  tends to be higher than the natural unemployment rate. 
D)  tends to be lower than the natural unemployment rate. 
A)  will decrease over time. 
B)  is negative. 
C)  tends to be higher than the natural unemployment rate. 
D)  tends to be lower than the natural unemployment rate.

Question 11

The value of money for buying goods and services is known as

Accepted Answer

A)  inflation. 
B)  nomination. 
C)  nominal income. 
D)  purchasing power. 
A)  inflation. 
B)  nomination. 
C)  nominal income. 
D)  purchasing power.

Question 12

The indices that are based on a fixed market basket of goods and services are

Accepted Answer

A)  CPI and GDP deflator. 
B)  PPI and GDP deflator. 
C)  CPI and PPI. 
D)  CPI, PPI and GDP deflator. 
A)  CPI and GDP deflator. 
B)  PPI and GDP deflator. 
C)  CPI and PPI. 
D)  CPI, PPI and GDP deflator.

Question 13

If the nominal interest rate is 9 percent and the anticipated inflation rate is 4 percent, then

Accepted Answer

A)  the real interest rate is 5 percent. 
B)  the real interest rate is 13 percent. 
C)  the real interest rate is -5 percent. 
D)  the real interest rate is 2.25 percent. 
A)  the real interest rate is 5 percent. 
B)  the real interest rate is 13 percent. 
C)  the real interest rate is -5 percent. 
D)  the real interest rate is 2.25 percent.

Question 14

Which one of the following accurately describes the trends in U.S. labor force participation over the past 50 years?

Accepted Answer

A)  The labor force participation rate of men has climbed from about 75 percent to 90 percent. 
B)  The labor force participation rate of women has climbed from below 40 percent to about 60 percent 
C)  The labor force participation rates for both men and women have declined. 
D)  The overall labor force participation rate has held steady at about 85 percent. 
A)  The labor force participation rate of men has climbed from about 75 percent to 90 percent. 
B)  The labor force participation rate of women has climbed from below 40 percent to about 60 percent 
C)  The labor force participation rates for both men and women have declined. 
D)  The overall labor force participation rate has held steady at about 85 percent.

Question 15

Contractions are characterized by

Accepted Answer

A)  increases in the rate of growth of economic activity. 
B)  an upward movement toward a peak in economic activity. 
C)  a downward movement toward a trough in economic activity. 
D)  a long period in which no cycles are observed in economic activity. 
A)  increases in the rate of growth of economic activity. 
B)  an upward movement toward a peak in economic activity. 
C)  a downward movement toward a trough in economic activity. 
D)  a long period in which no cycles are observed in economic activity.

Question 16

-Refer the above figure. Stage "1" of the economy is called

Accepted Answer

A)  the top. 
B)  the peak. 
C)  the trend. 
D)  the climax. 
A)  the top. 
B)  the peak. 
C)  the trend. 
D)  the climax.

Question 17

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 18

How much should a bank charge for a loan, if the anticipated inflation rate is 4 percent, and the bank wants to earn 3 percent on this $1,000,000 loan?

Accepted Answer

A)  $30,000 
B)  $40,000 
C)  7 percent 
D)  1 percent 
A)  $30,000 
B)  $40,000 
C)  7 percent 
D)  1 percent

Question 19

Which one of the following individuals would be classified as structurally unemployed?

Accepted Answer

A)  Bennett lost his construction job because there was a reduction in the number of houses built during the winter of 2010. 
B)  Gail lost her job with the state because there was a reduction in the state budget. 
C)  Tommy lost his job when the steel mill where he worked closed because domestic producers would not produce as efficiently and cheaply as foreign firms. 
D)  Fay lost her job in early January when the Christmas store where she worked closed. 
A)  Bennett lost his construction job because there was a reduction in the number of houses built during the winter of 2010. 
B)  Gail lost her job with the state because there was a reduction in the state budget. 
C)  Tommy lost his job when the steel mill where he worked closed because domestic producers would not produce as efficiently and cheaply as foreign firms. 
D)  Fay lost her job in early January when the Christmas store where she worked closed.

Question 20

Assuming there are 150 million people employed in the United States and 5 million people unemployed, the unemployment rate would therefore approximately equal

Accepted Answer

A)  2.22 percent. 
B)  3.23 percent. 
C)  4.4 percent. 
D)  10.1 percent. 
A)  2.22 percent. 
B)  3.23 percent. 
C)  4.4 percent. 
D)  10.1 percent.

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

Seasonal unemployment is

An increase in inflation will cause a reduction in which of the following?

According to your text, during the 2000s, the inflation rate was in which range of percentages?

Unemployment is measured as

The duration of unemployment tends to rise when

Which government agency compiles the consumer price index?

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

The Personal Consumption Expenditure Index (PCE) is a

The official unemployment rate may understate the true rate of unemployment because of

-Refer to the above figure. At Point B, the actual unemployment rate

The value of money for buying goods and services is known as

The indices that are based on a fixed market basket of goods and services are

If the nominal interest rate is 9 percent and the anticipated inflation rate is 4 percent, then

Which one of the following accurately describes the trends in U.S. labor force participation over the past 50 years?

Contractions are characterized by

-Refer the above figure. Stage "1" of the economy is called

Which of the following statements is NOT true about inflation?

How much should a bank charge for a loan, if the anticipated inflation rate is 4 percent, and the bank wants to earn 3 percent on this $1,000,000 loan?

Which one of the following individuals would be classified as structurally unemployed?

Assuming there are 150 million people employed in the United States and 5 million people unemployed, the unemployment rate would therefore approximately equal

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

Measuring the Economys Performance

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

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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