Exam 18: Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

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What are the four phases of the classical business cycle and how is employment typically affected during each phase?

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Question 1

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The four phases of the business cycle are:
expansion--employment is typically increasing/unemployment falling
peak--output is the highest during the cycle,employment typically increases to this point (before it begins to fall)
contraction--employment falls and unemployment rises (as output falls)
trough--output reaches its lowest level during the cycle,employment is typically falling until the trough is reached (after which it begins to rise)

If the price index is now 120,it means:

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Question 2

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Which of the following observations concerning phases of a business cycle is incorrect?

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Question 3

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The type of unemployment that occurs because of a recession is called:

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Question 4

The real interest rate is calculated by subtracting inflation from the nominal interest rate.

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Question 5

In the 1970s,savings and loan associations primarily earned their income from extending fixed-rate home loans.They extended many of these loans in the early 1970s when inflation was low.Were the savings and loans winners or losers as inflation skyrocketed in the late 1970s?

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Question 6

Each person in the population can be classified as employed,unemployed,or not in the labor force.

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Question 7

Economists refer to the "typical" rate of unemployment as the natural rate of unemployment.

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Question 8

Which of the following refers to extremely high rates of inflation for sustained periods of time?

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Question 9

The portion of unemployment that is attributable to an overall decline in the economy's business activity is called:

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Question 10

Which of the following statements is incorrect?

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Question 11

Suppose that everyone who has looked for a job for more than six months gave up in despair and stopped looking.What would happen to the unemployment rate?

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Question 12

Given a fixed nominal interest rate on a loan,unanticipated deflation:

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Question 13

If the numbers of employed and unemployed do not change but the size of the population increases by 10%,what would be the effect?

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Question 14

A forestry worker who is out of work because of the temporarily low demand for wood products associated with a recession is defined as:

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Question 15

The existence of discouraged workers:

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Question 16

A person who works 25 hours per week:

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Question 17

Economists consider cyclical unemployment to be the byproduct of a healthy economy.

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Question 18

Why are creditors harmed by unexpected inflation?

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Question 19

The GDP deflator represents a somewhat measure of prices that the CPI and the GDP deflator tends to be volatile than the CPI.

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Question 20

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Exam 18: Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

What are the four phases of the classical business cycle and how is employment typically affected during each phase?

If the price index is now 120,it means:

Which of the following observations concerning phases of a business cycle is incorrect?

The type of unemployment that occurs because of a recession is called:

The real interest rate is calculated by subtracting inflation from the nominal interest rate.

In the 1970s,savings and loan associations primarily earned their income from extending fixed-rate home loans.They extended many of these loans in the early 1970s when inflation was low.Were the savings and loans winners or losers as inflation skyrocketed in the late 1970s?

Each person in the population can be classified as employed,unemployed,or not in the labor force.

Economists refer to the "typical" rate of unemployment as the natural rate of unemployment.

Which of the following refers to extremely high rates of inflation for sustained periods of time?

The portion of unemployment that is attributable to an overall decline in the economy's business activity is called:

Which of the following statements is incorrect?

Suppose that everyone who has looked for a job for more than six months gave up in despair and stopped looking.What would happen to the unemployment rate?

Given a fixed nominal interest rate on a loan,unanticipated deflation:

If the numbers of employed and unemployed do not change but the size of the population increases by 10%,what would be the effect?

A forestry worker who is out of work because of the temporarily low demand for wood products associated with a recession is defined as:

The existence of discouraged workers:

A person who works 25 hours per week:

Economists consider cyclical unemployment to be the byproduct of a healthy economy.

Why are creditors harmed by unexpected inflation?

The GDP deflator represents a somewhat ____ measure of prices that the CPI and the GDP deflator tends to be ____ volatile than the CPI.

The Role and Method of Economics

Economics: Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Markets in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty, and Health Care

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Aggregate Demand and Aggregate Supply

The Aggregate Expenditure Model

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Trade

International Finance

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The GDP deflator represents a somewhat measure of prices that the CPI and the GDP deflator tends to be volatile than the CPI.