Question 1

The costs to firms of changing prices are called menu costs.

Accepted Answer

A) True 
 B)False

Question 2

In 2017,Boeing announced that it was laying off 1,800 employees in addition to the 7,000 workers it had cut the year before.The laid-off employees who were not able to find jobs at another aircraft manufacturer due to a permanent decline in employee demand in the aircraft industry would be considered

Accepted Answer

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

Question 3

The CPI is also referred to as

Accepted Answer

A) the GDP deflator. 
B) the inflation-consumption index. 
C) the cost-of-living index. 
D) the producer price index. 
A) the GDP deflator. 
B) the inflation-consumption index. 
C) the cost-of-living index. 
D) the producer price index.

Question 4

Table 9-17
  
-Refer to Table 9-17.Looking at the table above,real average hourly earnings in 2017 were

Accepted Answer

A) $3.67. 
B) $5.63. 
C) $10.24. 
D) $11.37. 
A) $3.67. 
B) $5.63. 
C) $10.24. 
D) $11.37.

Question 5

Which of the following is not a cost imposed by inflation?

Accepted Answer

A) Inflation reduces the affordability of goods and services to the average consumer. 
B) The money that consumers and firms hold loses its purchasing power. 
C) Firms must pay for changing prices on products and printing new catalogs. 
D) Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation. 
A) Inflation reduces the affordability of goods and services to the average consumer. 
B) The money that consumers and firms hold loses its purchasing power. 
C) Firms must pay for changing prices on products and printing new catalogs. 
D) Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation.

Question 6

If we want to use a measure of inflation that foreshadows price changes before they affect prices at the retail level,we would base our measure of inflation on

Accepted Answer

A) the producer price index. 
B) the consumer price index. 
C) the GDP deflator. 
D) the household price index. 
A) the producer price index. 
B) the consumer price index. 
C) the GDP deflator. 
D) the household price index.

Question 7

The Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill.

Accepted Answer

A) employed 
B) unemployed 
C) a discouraged worker 
D) out of the labor force 
A) employed 
B) unemployed 
C) a discouraged worker 
D) out of the labor force

Question 8

Which of the following statements is true about the U.S.economy?

Accepted Answer

A) Each year,many new jobs are created,but few existing jobs are destroyed,and the unemployed find jobs quickly. 
B) Each year,few new jobs are created,but few existing jobs are destroyed,keeping unemployment low. 
C) Each year,many new jobs are created and many existing jobs are destroyed. 
D) Each year few jobs are created,and therefore it takes the unemployed a long time to find a new job. 
A) Each year,many new jobs are created,but few existing jobs are destroyed,and the unemployed find jobs quickly. 
B) Each year,few new jobs are created,but few existing jobs are destroyed,keeping unemployment low. 
C) Each year,many new jobs are created and many existing jobs are destroyed. 
D) Each year few jobs are created,and therefore it takes the unemployed a long time to find a new job.

Question 9

Table 9-1
   Consider the data above for a simple economy.
-Refer to Table 9-1.The labor force participation rate for this simple economy equals

Accepted Answer

A) (1,000/1,100)× 100. 
B) (1,000/15,000)× 100. 
C) (1,100/15,000)× 100. 
D) (1,100/20,000)× 100. 
A) (1,000/1,100)× 100. 
B) (1,000/15,000)× 100. 
C) (1,100/15,000)× 100. 
D) (1,100/20,000)× 100.

Question 10

Discouraged workers are

Accepted Answer

A) workers who have a part time job but want a full time job. 
B) workers who find their current jobs unfulfilling and are considering a job change. 
C) workers who have consistently been looking for work for more than 4 weeks. 
D) workers who have stopped looking for work because they believe there are no jobs for them. 
A) workers who have a part time job but want a full time job. 
B) workers who find their current jobs unfulfilling and are considering a job change. 
C) workers who have consistently been looking for work for more than 4 weeks. 
D) workers who have stopped looking for work because they believe there are no jobs for them.

Question 11

The real rate of interest is

Accepted Answer

A) the nominal interest rate plus the inflation rate. 
B) the nominal interest rate minus the inflation rate. 
C) the interest rate determined by the supply and demand in the money market. 
D) the nominal interest rate. 
A) the nominal interest rate plus the inflation rate. 
B) the nominal interest rate minus the inflation rate. 
C) the interest rate determined by the supply and demand in the money market. 
D) the nominal interest rate.

Question 12

When the actual inflation rate turns out to be greater than the expected inflation rate,who gains-the borrower or the lender-and who loses? Explain why.

Accepted Answer

The borrower gains because he pays back

Question 13

The economy has gone into a recession.You have majored in computer science and,because of the recession,have difficulty in finding a job.According to the information in the chapter,should you go back to school and get a second major?

Accepted Answer

A) Yes,the recession will ensure that you will never find a job as a programmer. 
B) Yes,the recession will lower income in my field permanently. 
C) No,the recession will most likely be short-lived and I can get a job after it is over. 
D) No,the recession will have no impact on my ability to get a job or my future income. 
A) Yes,the recession will ensure that you will never find a job as a programmer. 
B) Yes,the recession will lower income in my field permanently. 
C) No,the recession will most likely be short-lived and I can get a job after it is over. 
D) No,the recession will have no impact on my ability to get a job or my future income.

Question 14

What effect does the payment of government unemployment insurance have on the unemployment rate?

Accepted Answer

The payment of government unemployment i

Question 15

The unemployment rate is an important economic statistic that can tell us about the health of the economy.If the unemployment rate turns out to be high or higher than anticipated,we would expect

Accepted Answer

A) it is more likely that an incumbent president will be re-elected. 
B) that stock prices are more likely to fall. 
C) that jobs are less difficult to find. 
D) that investors will be more optimistic about the economy. 
A) it is more likely that an incumbent president will be re-elected. 
B) that stock prices are more likely to fall. 
C) that jobs are less difficult to find. 
D) that investors will be more optimistic about the economy.

Question 16

Deflation occurs when

Accepted Answer

A) there is a sustained increase in the price level. 
B) there is a one-time increase in the price level. 
C) there is a decline in the price level. 
D) there is a decrease in the expected rate of inflation. 
A) there is a sustained increase in the price level. 
B) there is a one-time increase in the price level. 
C) there is a decline in the price level. 
D) there is a decrease in the expected rate of inflation.

Question 17

The natural rate of unemployment is made up of

Accepted Answer

A) frictional,cyclical,and structural unemployment. 
B) frictional and cyclical unemployment. 
C) cyclical and structural unemployment. 
D) frictional and structural unemployment. 
E) seasonal and structural unemployment. 
A) frictional,cyclical,and structural unemployment. 
B) frictional and cyclical unemployment. 
C) cyclical and structural unemployment. 
D) frictional and structural unemployment. 
E) seasonal and structural unemployment.

Question 18

Describe how inflation can be costly even if it is anticipated.

Accepted Answer

First,there will be redistribution as so

Question 19

If inflation increases unexpectedly,then

Accepted Answer

A) borrowers pay a higher real interest rate than they expected. 
B) lenders receive a lower real interest rate than they expected. 
C) lenders gain and borrowers gain. 
D) neither borrowers nor lenders lose. 
A) borrowers pay a higher real interest rate than they expected. 
B) lenders receive a lower real interest rate than they expected. 
C) lenders gain and borrowers gain. 
D) neither borrowers nor lenders lose.

Question 20

What is the difference between the nominal interest rate and the real interest rate?

Accepted Answer

The nominal interest rate is t

The costs to firms of changing prices are called menu costs.

The CPI is also referred to as

Table 9-17 -Refer to Table 9-17.Looking at the table above,real average hourly earnings in 2017 were

Which of the following is not a cost imposed by inflation?

If we want to use a measure of inflation that foreshadows price changes before they affect prices at the retail level,we would base our measure of inflation on

The Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill.

Which of the following statements is true about the U.S.economy?

Table 9-1 Consider the data above for a simple economy. -Refer to Table 9-1.The labor force participation rate for this simple economy equals

Discouraged workers are

The real rate of interest is

When the actual inflation rate turns out to be greater than the expected inflation rate,who gains-the borrower or the lender-and who loses? Explain why.

The economy has gone into a recession.You have majored in computer science and,because of the recession,have difficulty in finding a job.According to the information in the chapter,should you go back to school and get a second major?

What effect does the payment of government unemployment insurance have on the unemployment rate?

The unemployment rate is an important economic statistic that can tell us about the health of the economy.If the unemployment rate turns out to be high or higher than anticipated,we would expect

Deflation occurs when

The natural rate of unemployment is made up of

Describe how inflation can be costly even if it is anticipated.

If inflation increases unexpectedly,then

What is the difference between the nominal interest rate and the real interest rate?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 9: Unemployment and Inflation

The costs to firms of changing prices are called menu costs.

The CPI is also referred to as

Table 9-17 -Refer to Table 9-17.Looking at the table above,real average hourly earnings in 2017 were

Which of the following is not a cost imposed by inflation?

If we want to use a measure of inflation that foreshadows price changes before they affect prices at the retail level,we would base our measure of inflation on

The Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill.

Which of the following statements is true about the U.S.economy?

Table 9-1 Consider the data above for a simple economy. -Refer to Table 9-1.The labor force participation rate for this simple economy equals

Discouraged workers are

The real rate of interest is

When the actual inflation rate turns out to be greater than the expected inflation rate,who gains-the borrower or the lender-and who loses? Explain why.

The economy has gone into a recession.You have majored in computer science and,because of the recession,have difficulty in finding a job.According to the information in the chapter,should you go back to school and get a second major?

What effect does the payment of government unemployment insurance have on the unemployment rate?

The unemployment rate is an important economic statistic that can tell us about the health of the economy.If the unemployment rate turns out to be high or higher than anticipated,we would expect

Deflation occurs when

The natural rate of unemployment is made up of

Describe how inflation can be costly even if it is anticipated.

If inflation increases unexpectedly,then

What is the difference between the nominal interest rate and the real interest rate?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters