Question 1

If the economy is initially at full employment,an increase in aggregate demand will result in

Accepted Answer

A) Demand-pull inflation 
B) Profit-push inflation 
C) Cost-push inflation 
D) Unemployment 
E) Underemployment 
A) Demand-pull inflation 
B) Profit-push inflation 
C) Cost-push inflation 
D) Unemployment 
E) Underemployment A

Question 2

Which price index is also known as the cost-of-living index?

Accepted Answer

A) Consumer price index 
B) Wholesale price index 
C) Implicit price deflator 
D) GDP deflator 
E) All of the above 
A) Consumer price index 
B) Wholesale price index 
C) Implicit price deflator 
D) GDP deflator 
E) All of the above A

Question 3

If leakages exceed injections,unemployment will result.

Accepted Answer

A) True 
 B)False  True

Question 4

If the economy is operating at a less-than-full employment level,an increase in aggregate demand may result in an increase in the price level as well as an increase in the level of employment.

Accepted Answer

A) True 
 B)False

Question 5

The Following Questions Refer to the graph below.   
-Given D0 and S0,an increase in aggregate demand would lead to which of the following?

Accepted Answer

A) Higher unemployment 
B) Lower unemployment 
C) Inflation 
D) Deflation 
E) Recession 
A) Higher unemployment 
B) Lower unemployment 
C) Inflation 
D) Deflation 
E) Recession

Question 6

The Following Questions Refer to the graph below.   
-Given S1 and D1,which of the following changes reduces unemployment? A shift to

Accepted Answer

A) D0 
B) D2 
C) S0 
D) All of the above 
E) None of the above 
A) D0 
B) D2 
C) S0 
D) All of the above 
E) None of the above

Question 7

Price index numbers for a series of years show

Accepted Answer

A) If money GDP is growing 
B) If real GDP is growing 
C) If all prices are rising 
D) The average price level for each year as a percentage of the base year 
E) None of the above 
A) If money GDP is growing 
B) If real GDP is growing 
C) If all prices are rising 
D) The average price level for each year as a percentage of the base year 
E) None of the above

Question 8

Cyclical unemployment is involuntary.

Accepted Answer

A) True 
 B)False

Question 9

The Phillips curve has displayed a stable relationship between inflation and unemployment since the 1960s.

Accepted Answer

A) True 
 B)False

Question 10

The circular flow of economic activity developed in the text is a model of the

Accepted Answer

A) Flow of goods,resources,payments and expenditures between the sectors of the economy 
B) Influence of government on business behavior 
C) Influence of business on consumers 
D) Role of unions and government in the economy 
E) Interaction among taxes,prices,and profits 
A) Flow of goods,resources,payments and expenditures between the sectors of the economy 
B) Influence of government on business behavior 
C) Influence of business on consumers 
D) Role of unions and government in the economy 
E) Interaction among taxes,prices,and profits

Question 11

Aggregate demand

Accepted Answer

A) Represents the sum of the demands by all purchasers of goods and services in an economy 
B) Is comprised of the purchases of goods and services only by consumers 
C) Excludes imports and exports 
D) Assumes that governments do not purchase goods and services 
E) None of the above 
A) Represents the sum of the demands by all purchasers of goods and services in an economy 
B) Is comprised of the purchases of goods and services only by consumers 
C) Excludes imports and exports 
D) Assumes that governments do not purchase goods and services 
E) None of the above

Question 12

A farmer who has lost his farm due to increased agricultural productivity is considered

Accepted Answer

A) Frictionally unemployed 
B) Involuntarily unemployed 
C) Structurally unemployed 
D) Cyclically unemployed 
E) Seasonally unemployed 
A) Frictionally unemployed 
B) Involuntarily unemployed 
C) Structurally unemployed 
D) Cyclically unemployed 
E) Seasonally unemployed

Question 13

If inflation is not observable in the form of rising prices,it is called

Accepted Answer

A) Suppressed 
B) Repressed 
C) Deflation 
D) Dynamic 
E) None of the above 
A) Suppressed 
B) Repressed 
C) Deflation 
D) Dynamic 
E) None of the above

Question 14

Injections in the circular flow consist of

Accepted Answer

A) Savings,exports,and investments 
B) Savings,exports,and taxes 
C) Government spending,savings,and exports 
D) Government spending,investment,and exports 
E) None of the above 
A) Savings,exports,and investments 
B) Savings,exports,and taxes 
C) Government spending,savings,and exports 
D) Government spending,investment,and exports 
E) None of the above

Question 15

A poorly educated,unskilled teenager currently unemployed is an example of

Accepted Answer

A) Frictional unemployment 
B) Cyclical unemployment 
C) Structural unemployment 
D) Seasonal unemployment 
E) None of the above 
A) Frictional unemployment 
B) Cyclical unemployment 
C) Structural unemployment 
D) Seasonal unemployment 
E) None of the above

Question 16

The aggregate demand curve will shift to the right

Accepted Answer

A) When the government raises taxes 
B) If investors reduce their purchases of plant and equipment 
C) If consumer confidence increases 
D) If prices fall 
E) None of the above 
A) When the government raises taxes 
B) If investors reduce their purchases of plant and equipment 
C) If consumer confidence increases 
D) If prices fall 
E) None of the above

Question 17

If inflation causes the demand for houses to increase more rapidly than the demand for other goods,the economy has experienced which effect of inflation?

Accepted Answer

A) Equity 
B) Efficiency 
C) Output 
D) Input 
E) None of the above 
A) Equity 
B) Efficiency 
C) Output 
D) Input 
E) None of the above

Question 18

By how much must investment spending increase to increase output by $500 if the MPC is 0.8?

Accepted Answer

A) $100 
B) $300 
C) $400 
D) $500 
E) More than $500 
A) $100 
B) $300 
C) $400 
D) $500 
E) More than $500

Question 19

The labor force participation rate has been steadily increasing in recent years.

Accepted Answer

A) True 
 B)False

Question 20

The Following Questions Refer to the graph below.   
-Which of the following would cause a shift from S1 to S0?

Accepted Answer

A) A decrease in resource prices 
B) An decrease in unemployment 
C) An increase in the price of labor 
D) An increase in consumption 
E) All of the above 
A) A decrease in resource prices 
B) An decrease in unemployment 
C) An increase in the price of labor 
D) An increase in consumption 
E) All of the above

If the economy is initially at full employment,an increase in aggregate demand will result in

Which price index is also known as the cost-of-living index?

If leakages exceed injections,unemployment will result.

If the economy is operating at a less-than-full employment level,an increase in aggregate demand may result in an increase in the price level as well as an increase in the level of employment.

The Following Questions Refer to the graph below. -Given D⁰ and S⁰,an increase in aggregate demand would lead to which of the following?

The Following Questions Refer to the graph below. -Given S¹ and D¹,which of the following changes reduces unemployment? A shift to

Price index numbers for a series of years show

Cyclical unemployment is involuntary.

The Phillips curve has displayed a stable relationship between inflation and unemployment since the 1960s.

The circular flow of economic activity developed in the text is a model of the

Aggregate demand

A farmer who has lost his farm due to increased agricultural productivity is considered

If inflation is not observable in the form of rising prices,it is called

Injections in the circular flow consist of

A poorly educated,unskilled teenager currently unemployed is an example of

The aggregate demand curve will shift to the right

If inflation causes the demand for houses to increase more rapidly than the demand for other goods,the economy has experienced which effect of inflation?

By how much must investment spending increase to increase output by $500 if the MPC is 0.8?

The labor force participation rate has been steadily increasing in recent years.

The Following Questions Refer to the graph below. -Which of the following would cause a shift from S¹ to S⁰?

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Exam 13: Unemployment and Inflation: Can We Find a Balance

If the economy is initially at full employment,an increase in aggregate demand will result in

Which price index is also known as the cost-of-living index?

If leakages exceed injections,unemployment will result.

If the economy is operating at a less-than-full employment level,an increase in aggregate demand may result in an increase in the price level as well as an increase in the level of employment.

The Following Questions Refer to the graph below. -Given D0 and S0,an increase in aggregate demand would lead to which of the following?

The Following Questions Refer to the graph below. -Given S1 and D1,which of the following changes reduces unemployment? A shift to

Price index numbers for a series of years show

Cyclical unemployment is involuntary.

The Phillips curve has displayed a stable relationship between inflation and unemployment since the 1960s.

The circular flow of economic activity developed in the text is a model of the

Aggregate demand

A farmer who has lost his farm due to increased agricultural productivity is considered

If inflation is not observable in the form of rising prices,it is called

Injections in the circular flow consist of

A poorly educated,unskilled teenager currently unemployed is an example of

The aggregate demand curve will shift to the right

If inflation causes the demand for houses to increase more rapidly than the demand for other goods,the economy has experienced which effect of inflation?

By how much must investment spending increase to increase output by $500 if the MPC is 0.8?

The labor force participation rate has been steadily increasing in recent years.

The Following Questions Refer to the graph below. -Which of the following would cause a shift from S1 to S0?

Alleviating Human Misery: The Role of Economic Reasoning

Economic Systems, Resource Allocation, and Social Well-Being: Lessons From Chinas Transition

Government Control of Prices in Mixed Systems: Who Are the Winners and Losers

Pollution Problems: Must We Foul Our Own Nests

Economics of Crime and Its Prevention: How Much Is Too Much

The Economics of Education: Crisis and Reform

Poverty Problems and Discrimination: Why Are so Many Still so Poor

The Economics of Monopoly Power: Can Markets Be Controlled

The Economics of Professional Sports: What Is the Real Score

Competition in the Global Market-Place: Should We Protect Ourselves From International Trade

Economic Growth: Why Is the Economic Road so Bumpy

Money,Banking and the Financial System: Old Problems With New Twists

Government Spending,Taxation,and the National Debt: Who Wins and Who Loses

Social Security and Medicare: How Secure Is Our Safety Net for the Elderly

Filters

The Following Questions Refer to the graph below. -Given D⁰ and S⁰,an increase in aggregate demand would lead to which of the following?

The Following Questions Refer to the graph below. -Given S¹ and D¹,which of the following changes reduces unemployment? A shift to

The Following Questions Refer to the graph below. -Which of the following would cause a shift from S¹ to S⁰?