Question 1

An individual who has stopped looking for a job because he is convinced that he cannot find a job is referred to as

Accepted Answer

A)  a contingent worker. 
B)  a productive worker. 
C)  a discouraged worker. 
D)  an unemployed worker. 
A)  a contingent worker. 
B)  a productive worker. 
C)  a discouraged worker. 
D)  an unemployed worker.

Question 2

When there is an increase in the duration of unemployment, the U.S. Congress typically responds by

Accepted Answer

A)  lowering income taxes. 
B)  extending unemployment benefits. 
C)  encouraging unemployed U.S. workers to seek employment overseas. 
D)  redefining "unemployed" so the unemployment rate does not look so bad. 
A)  lowering income taxes. 
B)  extending unemployment benefits. 
C)  encouraging unemployed U.S. workers to seek employment overseas. 
D)  redefining "unemployed" so the unemployment rate does not look so bad.

Question 3

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 4

The number of people that are fired in a month is

Accepted Answer

A)  a stock. 
B)  a flow. 
C)  both a stock and a flow. 
D)  neither a stock nor a flow. 
A)  a stock. 
B)  a flow. 
C)  both a stock and a flow. 
D)  neither a stock nor a flow.

Question 5

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 6

"Discouraged workers"

Accepted Answer

A)  would be considered as unemployed. 
B)  would not be considered as unemployed. 
C)  would be considered as part of the labor force. 
D)  would, according to some, tend to skew the unemployment rate upward. 
A)  would be considered as unemployed. 
B)  would not be considered as unemployed. 
C)  would be considered as part of the labor force. 
D)  would, according to some, tend to skew the unemployment rate upward.

Question 7

When did the United States register its lowest unemployment rate?

Accepted Answer

A)  In the 1920s 
B)  In the economic boom of the 1990s 
C)  In the Roaring Nineties (1890s) 
D)  At the end of World War II 
A)  In the 1920s 
B)  In the economic boom of the 1990s 
C)  In the Roaring Nineties (1890s) 
D)  At the end of World War II

Question 8

Frictional unemployment will always exist since

Accepted Answer

A)  some workers will always want to make a job transition. 
B)  the capitalist system promotes unemployment. 
C)  mismatches in skills will always exist. 
D)  the U.S. economy will continue to shrink. 
A)  some workers will always want to make a job transition. 
B)  the capitalist system promotes unemployment. 
C)  mismatches in skills will always exist. 
D)  the U.S. economy will continue to shrink.

Question 9

The inflation rate has been 4 percent for twenty years, and the nominal interest rate has been 8 percent during this same time period. Suddenly, the public anticipates that the inflation rate will be 8 percent this coming year. The real rate of interest for the coming year is

Accepted Answer

A)  0 percent. 
B)  2 percent. 
C)  4 percent. 
D)  6 percent. 
A)  0 percent. 
B)  2 percent. 
C)  4 percent. 
D)  6 percent.

Question 10

Which of the following price indexes is designed to measure changes in the prices of goods and services purchased by a typical individual?

Accepted Answer

A)  Producer Price Index 
B)  Gross Domestic Product (GDP) Deflator 
C)  Index of Leading Economic Indicators 
D)  Consumer Price Index 
A)  Producer Price Index 
B)  Gross Domestic Product (GDP) Deflator 
C)  Index of Leading Economic Indicators 
D)  Consumer Price Index

Question 11

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 12

The peak phase of the business cycle represents

Accepted Answer

A)  a temporary maximum output level of Gross Domestic Product (GDP). 
B)  an increase in foreign investment. 
C)  a labor surplus. 
D)  falling prices. 
A)  a temporary maximum output level of Gross Domestic Product (GDP). 
B)  an increase in foreign investment. 
C)  a labor surplus. 
D)  falling prices.

Question 13

A business fluctuation when the pace of business activity is speeding up is known as

Accepted Answer

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

Question 14

If the current price of a market basket of goods is $850 and the base year price for the same market basket is $500, what is the value of the price index?

Accepted Answer

A)  140 
B)  170 
C)  120 
D)  100 
A)  140 
B)  170 
C)  120 
D)  100

Question 15

-Using the above table, the following is the output of a two-product economy. The price index in this economy in Year 2, assuming Year 1 is the base year, is

Accepted Answer

A)  113.0. 
B)  88.5. 
C)  107.1. 
D)  106.7. 
A)  113.0. 
B)  88.5. 
C)  107.1. 
D)  106.7.

Question 16

The population of individuals at least 16 years of age can be broken into 3 groups. They are

Accepted Answer

A)  the unemployed, discouraged workers, and retirees. 
B)  those employed full-time, those employed only part-time, and the unemployed. 
C)  those working in the for-profit sector, those working in the nonprofit sector, and individuals who are unemployed. 
D)  none of the above. 
A)  the unemployed, discouraged workers, and retirees. 
B)  those employed full-time, those employed only part-time, and the unemployed. 
C)  those working in the for-profit sector, those working in the nonprofit sector, and individuals who are unemployed. 
D)  none of the above.

Question 17

The National Bureau of Economic Research is

Accepted Answer

A)  funded by Congress and evaluates the budget appropriations. 
B)  funded by the Federal Reserve Banks and analyzes the banking system. 
C)  a nonprofit organization and evaluates the business cycles. 
D)  a nonprofit organization and evaluates the U.S. monetary policy. 
A)  funded by Congress and evaluates the budget appropriations. 
B)  funded by the Federal Reserve Banks and analyzes the banking system. 
C)  a nonprofit organization and evaluates the business cycles. 
D)  a nonprofit organization and evaluates the U.S. monetary policy.

Question 18

A major element of the concepts of inflation and deflation is

Accepted Answer

A)  the idea that price changes are measured daily. 
B)  their dependence on average rather than individual prices. 
C)  the requirement that ALL prices must be moving in the same direction. 
D)  each household's willingness to report what they pay for goods and services each month. 
A)  the idea that price changes are measured daily. 
B)  their dependence on average rather than individual prices. 
C)  the requirement that ALL prices must be moving in the same direction. 
D)  each household's willingness to report what they pay for goods and services each month.

Question 19

By the legal definition of unemployment, a person who has quit his job to take care of his children full time is

Accepted Answer

A)  unemployed. 
B)  employed. 
C)  in the labor force. 
D)  not in the labor force. 
A)  unemployed. 
B)  employed. 
C)  in the labor force. 
D)  not in the labor force.

Question 20

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.

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

An individual who has stopped looking for a job because he is convinced that he cannot find a job is referred to as

When there is an increase in the duration of unemployment, the U.S. Congress typically responds by

Who is considered officially unemployed?

The number of people that are fired in a month is

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

"Discouraged workers"

When did the United States register its lowest unemployment rate?

Frictional unemployment will always exist since

The inflation rate has been 4 percent for twenty years, and the nominal interest rate has been 8 percent during this same time period. Suddenly, the public anticipates that the inflation rate will be 8 percent this coming year. The real rate of interest for the coming year is

Which of the following price indexes is designed to measure changes in the prices of goods and services purchased by a typical individual?

Changes in leading indicators signal

The peak phase of the business cycle represents

A business fluctuation when the pace of business activity is speeding up is known as

If the current price of a market basket of goods is $850 and the base year price for the same market basket is $500, what is the value of the price index?

-Using the above table, the following is the output of a two-product economy. The price index in this economy in Year 2, assuming Year 1 is the base year, is

The population of individuals at least 16 years of age can be broken into 3 groups. They are

The National Bureau of Economic Research is

A major element of the concepts of inflation and deflation is

By the legal definition of unemployment, a person who has quit his job to take care of his children full time is

Changes in business activity 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

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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