Question 1

The production of durable goods is more stable than the production of nondurables over the business cycle.

Accepted Answer

A) True 
 B)False

Question 2

The type of unemployment associated with recessions is called:

Accepted Answer

A)  frictional unemployment. 
B)  structural unemployment. 
C)  cyclical unemployment. 
D)  seasonal unemployment. 
A)  frictional unemployment. 
B)  structural unemployment. 
C)  cyclical unemployment. 
D)  seasonal unemployment.

Question 3

The consumer price index was 177.1 in 2001 and 179.9 in 2002.Therefore,the rate of inflation in 2002 was about:

Accepted Answer

A)  2.8 percent. 
B)  3.4 percent. 
C)  1.6 percent. 
D)  4.1 percent. 
A)  2.8 percent. 
B)  3.4 percent. 
C)  1.6 percent. 
D)  4.1 percent.

Question 4

Demand-pull inflation:

Accepted Answer

A)  occurs when prices of resources rise,pushing up costs and the price level. 
B)  occurs when total spending exceeds the economy's ability to provide output at the existing price level. 
C)  occurs only when the economy has reached its absolute production capacity. 
D)  is also called cost-push inflation. 
A)  occurs when prices of resources rise,pushing up costs and the price level. 
B)  occurs when total spending exceeds the economy's ability to provide output at the existing price level. 
C)  occurs only when the economy has reached its absolute production capacity. 
D)  is also called cost-push inflation.

Question 5

The business cycle is so named because upswings and downswings in business activity are predictably equal in terms of duration and intensity.

Accepted Answer

A) True 
 B)False

Question 6

Most economists agree that the immediate cause of most business cycle variation is:

Accepted Answer

A)  an unexpected change in the productivity of workers. 
B)  an unexpected change in the level of total spending. 
C)  the invention of new products. 
D)  the growth and subsequent bursting of financial bubbles. 
A)  an unexpected change in the productivity of workers. 
B)  an unexpected change in the level of total spending. 
C)  the invention of new products. 
D)  the growth and subsequent bursting of financial bubbles.

Question 7

Alex works in his own home as a homemaker and full-time caretaker of his children.Officially,he is:

Accepted Answer

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

Question 8

At the economy's natural rate of unemployment:

Accepted Answer

A)  the economy achieves its potential output. 
B)  there is only a relatively small amount of cyclical unemployment. 
C)  only frictional unemployment exists. 
D)  only structural unemployment exists. 
A)  the economy achieves its potential output. 
B)  there is only a relatively small amount of cyclical unemployment. 
C)  only frictional unemployment exists. 
D)  only structural unemployment exists.

Question 9

Suppose that a person's nominal income rises from $10,000 to $12,000 and the consumer price index rises from 100 to 105.The person's real income will:

Accepted Answer

A)  fall by about 20 percent. 
B)  fall by about 2 percent. 
C)  rise by about 15 percent. 
D)  rise by about 25 percent. 
A)  fall by about 20 percent. 
B)  fall by about 2 percent. 
C)  rise by about 15 percent. 
D)  rise by about 25 percent.

Question 10

Answer the question on the basis of the following information about the hypothetical economy of Scoob.All figures are in millions. $\begin{array} { l l } 
\text { Unemployed } & 7 \
\text { Total Population } & 145 \
\text { Employed } & 95 \
\text { Discouraged Workers } & 3
\end{array}$ Refer to the given information.The labor force in Scoob is:

Accepted Answer

A)  95 million. 
B)  102 million. 
C)  105 million. 
D)  145 million. 
A)  95 million. 
B)  102 million. 
C)  105 million. 
D)  145 million.

Question 11

A large negative GDP gap implies:

Accepted Answer

A)  an excess of imports over exports. 
B)  a low rate of unemployment. 
C)  a high rate of unemployment. 
D)  a sharply rising price level. 
A)  an excess of imports over exports. 
B)  a low rate of unemployment. 
C)  a high rate of unemployment. 
D)  a sharply rising price level.

Question 12

Suppose there are 5 million unemployed workers seeking jobs.After a period of time,1 million of them become discouraged over their job prospects and cease to look for work.As a result of this,all else equal,the official unemployment rate would:

Accepted Answer

A)  decline. 
B)  increase. 
C)  increase in the short run but eventually decline. 
D)  be unchanged. 
A)  decline. 
B)  increase. 
C)  increase in the short run but eventually decline. 
D)  be unchanged.

Question 13

Unemployment involving a mismatch of the skills of unemployed workers and the skills required for available jobs is called:

Accepted Answer

A)  frictional unemployment. 
B)  structural unemployment. 
C)  cyclical unemployment. 
D)  compositional unemployment. 
A)  frictional unemployment. 
B)  structural unemployment. 
C)  cyclical unemployment. 
D)  compositional unemployment.

Question 14

The United States' economy is considered to be at full employment when:

Accepted Answer

A)  about 4-5 percent of the total population is unemployed. 
B)  90 percent of the labor force is employed. 
C)  about 4-5 percent of the labor force is unemployed. 
D)  100 percent of the labor force is employed. 
A)  about 4-5 percent of the total population is unemployed. 
B)  90 percent of the labor force is employed. 
C)  about 4-5 percent of the labor force is unemployed. 
D)  100 percent of the labor force is employed.

The production of durable goods is more stable than the production of nondurables over the business cycle.

The type of unemployment associated with recessions is called:

The consumer price index was 177.1 in 2001 and 179.9 in 2002.Therefore,the rate of inflation in 2002 was about:

Demand-pull inflation:

The business cycle is so named because upswings and downswings in business activity are predictably equal in terms of duration and intensity.

Most economists agree that the immediate cause of most business cycle variation is:

Alex works in his own home as a homemaker and full-time caretaker of his children.Officially,he is:

At the economy's natural rate of unemployment:

Suppose that a person's nominal income rises from $10,000 to $12,000 and the consumer price index rises from 100 to 105.The person's real income will:

Answer the question on the basis of the following information about the hypothetical economy of Scoob.All figures are in millions. Unemployed 7 Total Population 145 Employed 95 Discouraged Workers 3 Refer to the given information.The labor force in Scoob is:

A large negative GDP gap implies:

Suppose there are 5 million unemployed workers seeking jobs.After a period of time,1 million of them become discouraged over their job prospects and cease to look for work.As a result of this,all else equal,the official unemployment rate would:

Unemployment involving a mismatch of the skills of unemployed workers and the skills required for available jobs is called:

The United States' economy is considered to be at full employment when:

Income Inequality Poverty and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

Filters

Exam 28: Business Cycles, Unemployment, and Inflation

The production of durable goods is more stable than the production of nondurables over the business cycle.

The type of unemployment associated with recessions is called:

The consumer price index was 177.1 in 2001 and 179.9 in 2002.Therefore,the rate of inflation in 2002 was about:

Demand-pull inflation:

The business cycle is so named because upswings and downswings in business activity are predictably equal in terms of duration and intensity.

Most economists agree that the immediate cause of most business cycle variation is:

Alex works in his own home as a homemaker and full-time caretaker of his children.Officially,he is:

At the economy's natural rate of unemployment:

Suppose that a person's nominal income rises from $10,000 to $12,000 and the consumer price index rises from 100 to 105.The person's real income will:

Answer the question on the basis of the following information about the hypothetical economy of Scoob.All figures are in millions. Unemployed 7 Total Population 145 Employed 95 Discouraged Workers 3 Refer to the given information.The labor force in Scoob is:

A large negative GDP gap implies:

Suppose there are 5 million unemployed workers seeking jobs.After a period of time,1 million of them become discouraged over their job prospects and cease to look for work.As a result of this,all else equal,the official unemployment rate would:

Unemployment involving a mismatch of the skills of unemployed workers and the skills required for available jobs is called:

The United States' economy is considered to be at full employment when:

Income Inequality Poverty and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

Filters