Question 1

Structural unemployment occurs when:

Accepted Answer

A)  automation reduces the need for welders in Detroit. 
B)  frictional unemployment exceeds 5 percent of the labor force. 
C)  steelworkers are laid off due to a downturn in the economy. 
D)  a person leaves a job to seek a better position and has not yet found the job he or she wants. 
A)  automation reduces the need for welders in Detroit. 
B)  frictional unemployment exceeds 5 percent of the labor force. 
C)  steelworkers are laid off due to a downturn in the economy. 
D)  a person leaves a job to seek a better position and has not yet found the job he or she wants.

Question 2

Which of the following is true?

Accepted Answer

A)  At the natural rate of unemployment, the economy is considered to be at full employment. 
B)  At full employment, the economy is producing at its potential output. 
C)  If unemployment is greater than its natural rate, the economy is producing at less than its potential output. 
D)  All of the above are true. 
A)  At the natural rate of unemployment, the economy is considered to be at full employment. 
B)  At full employment, the economy is producing at its potential output. 
C)  If unemployment is greater than its natural rate, the economy is producing at less than its potential output. 
D)  All of the above are true.

Question 3

The total labor force equals:

Accepted Answer

A)  the number of officially employed persons. 
B)  the number of officially unemployed persons. 
C)  the number of officially employed plus unemployed persons. 
D)  the number of persons aged sixteen and over in the population. 
A)  the number of officially employed persons. 
B)  the number of officially unemployed persons. 
C)  the number of officially employed plus unemployed persons. 
D)  the number of persons aged sixteen and over in the population.

Question 4

If firms pay employees an efficiency wage:

Accepted Answer

A)  absenteeism would be expected to decrease. 
B)  turnover would be expected to increase. 
C)  training costs would likely increase. 
D)  more shirking on the job is likely to occur. 
A)  absenteeism would be expected to decrease. 
B)  turnover would be expected to increase. 
C)  training costs would likely increase. 
D)  more shirking on the job is likely to occur.

Question 5

In the nineteenth century,U.S.farmers were ordinarily debtors.Farmers typically borrowed from banks to develop new acreage and to be able to purchase necessary inputs prior to each growing season.Why did farmers generally support public policies that were inflationary?

Accepted Answer

In times of unanticipated inflation,farm

Question 6

If the unemployment rate is 8 percent,this means:

Accepted Answer

A)  8 percent of the population is unemployed. 
B)  8 percent of the population over age 16 is unemployed. 
C)  8 percent of the labor force is unemployed. 
D)  the number of unemployed persons equals 8 percent of the employed persons. 
A)  8 percent of the population is unemployed. 
B)  8 percent of the population over age 16 is unemployed. 
C)  8 percent of the labor force is unemployed. 
D)  the number of unemployed persons equals 8 percent of the employed persons.

Question 7

The official unemployment rate may not reflect the true state of unemployment because:

Accepted Answer

A)  part-time employees who want to work more hours are treated the same statistically as those who hold full-time jobs. 
B)  some individuals who want to work may become discouraged and cease actively looking for work. 
C)  workers laid off from their jobs and looking for new ones are not counted among the unemployed. 
D)  of (a) and (b) only. 
A)  part-time employees who want to work more hours are treated the same statistically as those who hold full-time jobs. 
B)  some individuals who want to work may become discouraged and cease actively looking for work. 
C)  workers laid off from their jobs and looking for new ones are not counted among the unemployed. 
D)  of (a) and (b) only.

Question 8

Say that initially the nominal interest rate is 6% and prices are stable,but the inflation rate the following year rises to 3%.If the real rate of interest is to remain unchanged,the nominal interest rate in the second year must:

Accepted Answer

A)  rise by 9 percentage points. 
B)  rise by 6 percentage points. 
C)  rise by 3 percentage points. 
D)  remain unchanged. 
A)  rise by 9 percentage points. 
B)  rise by 6 percentage points. 
C)  rise by 3 percentage points. 
D)  remain unchanged.

Question 9

The unemployment rate in a town in which 65,400 persons are employed and 11,000 are unemployed equals:

Accepted Answer

A)  11 percent. 
B)  14.4 percent. 
C)  16.8 percent. 
D)  18.2 percent. 
A)  11 percent. 
B)  14.4 percent. 
C)  16.8 percent. 
D)  18.2 percent.

Question 10

Which of the following groups of people would be included in the official unemployment rate?

Accepted Answer

A)  part-time workers 
B)  workers temporarily laid off from jobs to which they expect to return 
C)  discouraged workers 
D)  all of the above 
A)  part-time workers 
B)  workers temporarily laid off from jobs to which they expect to return 
C)  discouraged workers 
D)  all of the above

Question 11

The unemployment rate is the number of people classified as unemployed as a percentage of:

Accepted Answer

A)  the entire population. 
B)  the population over the age of sixteen. 
C)  the labor force. 
D)  the number of people over the age of sixteen who are employed. 
A)  the entire population. 
B)  the population over the age of sixteen. 
C)  the labor force. 
D)  the number of people over the age of sixteen who are employed.

Question 12

The economy reaches full employment when the unemployment rate equals zero.

Accepted Answer

A) True 
 B)False

Question 13

The difference between the nominal interest rate and the rate of inflation is:

Accepted Answer

A)  the prime rate. 
B)  the real interest rate. 
C)  the discount rate. 
D)  coupon rate. 
A)  the prime rate. 
B)  the real interest rate. 
C)  the discount rate. 
D)  coupon rate.

Question 14

The unemployment rate is defined as:

Accepted Answer

A)  unemployed workers plus discouraged workers, divided by the total population over the age of sixteen. 
B)  part-time workers plus full-time workers, divided by the total population over the age of sixteen. 
C)  the percentage of the labor force that is unemployed. 
D)  the percentage of the population over the age of sixteen that is unemployed. 
A)  unemployed workers plus discouraged workers, divided by the total population over the age of sixteen. 
B)  part-time workers plus full-time workers, divided by the total population over the age of sixteen. 
C)  the percentage of the labor force that is unemployed. 
D)  the percentage of the population over the age of sixteen that is unemployed.

Question 15

Job losers typically account for ____ of the unemployed.

Accepted Answer

A)  80 to 90 percent 
B)  50 to 60 percent 
C)  30 to 40 percent 
D)  10 to 20 percent 
A)  80 to 90 percent 
B)  50 to 60 percent 
C)  30 to 40 percent 
D)  10 to 20 percent

Question 16

Luke has lent his friend Mitch some money.However he underestimated the rate of inflation when they agreed to a repayment and interest schedule.Mitch will benefit from the inflation.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following observations concerning leading economic indicators is true?

Accepted Answer

A)  They provide warnings of likely downturns. 
B)  They provide accurate information on the depth of a downturn. 
C)  They provide accurate information on the duration of a downturn. 
D)  Both b. and c. are true. 
A)  They provide warnings of likely downturns. 
B)  They provide accurate information on the depth of a downturn. 
C)  They provide accurate information on the duration of a downturn. 
D)  Both b. and c. are true.

Question 18

Inflation exists whenever:

Accepted Answer

A)  the price of a good increases. 
B)  the price of a good decreases. 
C)  the economy experiences a contraction. 
D)  the overall price level is rising. 
A)  the price of a good increases. 
B)  the price of a good decreases. 
C)  the economy experiences a contraction. 
D)  the overall price level is rising.

Question 19

Which of the following individuals are considered officially unemployed?

Accepted Answer

A)  a discouraged worker 
B)  an individual who quits his job to raise a child 
C)  an individual who is not looking for a job because he works in the underground economy 
D)  None of the above 
A)  a discouraged worker 
B)  an individual who quits his job to raise a child 
C)  an individual who is not looking for a job because he works in the underground economy 
D)  None of the above

Question 20

Billy loses his job as a road construction worker and cannot find another position with equivalent pay and benefits.As a result,he is still checking the want ads and reporting to the unemployment office on a weekly basis.He is considered to be:

Accepted Answer

A)  unemployed. 
B)  out of the labor force. 
C)  underemployed. 
D)  lazy. 
A)  unemployed. 
B)  out of the labor force. 
C)  underemployed. 
D)  lazy.

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

Structural unemployment occurs when:

Which of the following is true?

The total labor force equals:

If firms pay employees an efficiency wage:

In the nineteenth century,U.S.farmers were ordinarily debtors.Farmers typically borrowed from banks to develop new acreage and to be able to purchase necessary inputs prior to each growing season.Why did farmers generally support public policies that were inflationary?

If the unemployment rate is 8 percent,this means:

The official unemployment rate may not reflect the true state of unemployment because:

Say that initially the nominal interest rate is 6% and prices are stable,but the inflation rate the following year rises to 3%.If the real rate of interest is to remain unchanged,the nominal interest rate in the second year must:

The unemployment rate in a town in which 65,400 persons are employed and 11,000 are unemployed equals:

Which of the following groups of people would be included in the official unemployment rate?

The unemployment rate is the number of people classified as unemployed as a percentage of:

The economy reaches full employment when the unemployment rate equals zero.

The difference between the nominal interest rate and the rate of inflation is:

The unemployment rate is defined as:

Job losers typically account for ____ of the unemployed.

Luke has lent his friend Mitch some money.However he underestimated the rate of inflation when they agreed to a repayment and interest schedule.Mitch will benefit from the inflation.

Which of the following observations concerning leading economic indicators is true?

Inflation exists whenever:

Which of the following individuals are considered officially unemployed?

Billy loses his job as a road construction worker and cannot find another position with equivalent pay and benefits.As a result,he is still checking the want ads and reporting to the unemployment office on a weekly basis.He is considered to be:

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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