Question 1

Suppose the cost of milk rose 100 percent from 1990 to 2012,and average prices for the economy rose 133 percent.Relative to others,people who purchased milk experienced a:

Accepted Answer

A)  Lower real income as a result of the price effect. 
B)  Higher real income as a result of the price effect. 
C)  Lower real income as a result of the wealth effect. 
D)  Higher real income as a result of the income effect. 
A)  Lower real income as a result of the price effect. 
B)  Higher real income as a result of the price effect. 
C)  Lower real income as a result of the wealth effect. 
D)  Higher real income as a result of the income effect.

Question 2

A basic purpose of macroeconomic theory is to:

Accepted Answer

A)  Explain the business cycle. 
B)  Stop economic contractions from occurring. 
C)  Control the business cycle. 
D)  Cause GDP to grow. 
A)  Explain the business cycle. 
B)  Stop economic contractions from occurring. 
C)  Control the business cycle. 
D)  Cause GDP to grow.

Question 3

Immediately following the years 1929-1933,the U.S.economy:

Accepted Answer

A)  Resumed growing at the long-term trend for real GDP of 6 percent. 
B)  Suffered sporadic decreases in the growth rate of GDP,which led to lower GDP per capita. 
C)  Grew dramatically and steadily over a 20-year period with a record long growth period. 
D)  Experienced World War II,which resulted in rapid growth and rapid deflation. 
A)  Resumed growing at the long-term trend for real GDP of 6 percent. 
B)  Suffered sporadic decreases in the growth rate of GDP,which led to lower GDP per capita. 
C)  Grew dramatically and steadily over a 20-year period with a record long growth period. 
D)  Experienced World War II,which resulted in rapid growth and rapid deflation.

Question 4

Suppose that at the start of this year you got a salary increase of 10 percent from your employer.The prices of the goods and services you typically purchase increase 10 percent during the year.At the end of the year you have experienced on balance:

Accepted Answer

A)  Higher real income and higher nominal income. 
B)  Higher real income but lower nominal income. 
C)  No change in nominal income. 
D)  No change in real income. 
A)  Higher real income and higher nominal income. 
B)  Higher real income but lower nominal income. 
C)  No change in nominal income. 
D)  No change in real income.

Question 5

The Consumer Price Index is used specifically to measure the:

Accepted Answer

A)  Unemployment rate. 
B)  Inflation rate. 
C)  Growth rate of the economy. 
D)  Business cycle. 
A)  Unemployment rate. 
B)  Inflation rate. 
C)  Growth rate of the economy. 
D)  Business cycle.

Question 6

According to macroeconomists,a goal for the economy is a:

Accepted Answer

A)  Zero unemployment rate. 
B)  High unemployment rate. 
C)  Steadily increasing unemployment rate. 
D)  Low unemployment rate. 
A)  Zero unemployment rate. 
B)  High unemployment rate. 
C)  Steadily increasing unemployment rate. 
D)  Low unemployment rate.

Question 7

Based on the News Wire article titled "Inflation and the Weimar Republic," which of the following is the best illustration of the wealth effect of inflation?

Accepted Answer

A)  "… businessmen traveling around the country found themselves borrowing funds from their customers each stage of the way.The cash they'd allocated for the entire trip barely sufficed to pay the way to the next stop." 
B)  "Workers were often paid daily and sometimes two or three times a day …" 
C)  "Debtors sought out creditors to pay them in valueless currency." 
D)  "Profits fell as employees demanded frequent wage adjustments. 
A)  "… businessmen traveling around the country found themselves borrowing funds from their customers each stage of the way.The cash they'd allocated for the entire trip barely sufficed to pay the way to the next stop." 
B)  "Workers were often paid daily and sometimes two or three times a day …" 
C)  "Debtors sought out creditors to pay them in valueless currency." 
D)  "Profits fell as employees demanded frequent wage adjustments.

Question 8

Which of the following is an example of the price effect during a period of inflation?

Accepted Answer

A)  Your income increases,but not as rapidly as the price level does. 
B)  You buy a lot of gasoline,and the price of gasoline rises more rapidly than the price level does. 
C)  You own a house,and its value rises more rapidly than the price level does. 
D)  You own municipal bonds that pay a low interest rate while the price level is rising. 
A)  Your income increases,but not as rapidly as the price level does. 
B)  You buy a lot of gasoline,and the price of gasoline rises more rapidly than the price level does. 
C)  You own a house,and its value rises more rapidly than the price level does. 
D)  You own municipal bonds that pay a low interest rate while the price level is rising.

Question 9

Table 10.1-Population and labor force data.  
-In Table 10.1,what is the number of unemployed in Year 1?

Accepted Answer

A)  15 million. 
B)  75 million. 
C)  90 million. 
D)  105 million. 
A)  15 million. 
B)  75 million. 
C)  90 million. 
D)  105 million.

Question 10

Deflation occurs when the:

Accepted Answer

A)  Price of large ticket items,such as appliances,decreases. 
B)  Price decreases for some goods and services outweigh price increases on all other goods and services. 
C)  Economy reaches full employment. 
D)  Average price of goods and services does not change. 
A)  Price of large ticket items,such as appliances,decreases. 
B)  Price decreases for some goods and services outweigh price increases on all other goods and services. 
C)  Economy reaches full employment. 
D)  Average price of goods and services does not change.

Question 11

Explain why when the price of one good or service rises it is not inflation;but when average prices rises there is inflation.

Accepted Answer

In some case the price for a single prod

Question 12

For a particular economy,the production possibilities curve shows the:

Accepted Answer

A)  Maximum potential output. 
B)  Maximum level of pollution. 
C)  Change in the price level. 
D)  Level of market power. 
A)  Maximum potential output. 
B)  Maximum level of pollution. 
C)  Change in the price level. 
D)  Level of market power.

Question 13

Which of the following is an example of cyclical unemployment?

Accepted Answer

A)  Qadir is employed in the summer as a lifeguard but cannot find a position in the winter 
B)  Quincy left his job in Dallas to search for a new job in Idaho 
C)  Quinlan worked as an engineer until he was laid off because of a decrease in aggregate demand 
D)  Quinn has few job-related skills so she is never hired even though she continues to apply 
A)  Qadir is employed in the summer as a lifeguard but cannot find a position in the winter 
B)  Quincy left his job in Dallas to search for a new job in Idaho 
C)  Quinlan worked as an engineer until he was laid off because of a decrease in aggregate demand 
D)  Quinn has few job-related skills so she is never hired even though she continues to apply

Question 14

If all prices and wages in the economy rise by the same percentage during the same time period,inflation does not cause a redistribution of income.

Accepted Answer

A) True 
 B)False

Question 15

Automobile workers in Detroit are unemployed because robots are now being used on assembly lines but,at the same time,job vacancies exist for computer programmers.In this case,the automobile workers are an example of:

Accepted Answer

A)  Cyclical unemployment. 
B)  Structural unemployment. 
C)  Frictional unemployment. 
D)  Seasonal unemployment. 
A)  Cyclical unemployment. 
B)  Structural unemployment. 
C)  Frictional unemployment. 
D)  Seasonal unemployment.

Question 16

If the population of a country is 1,000,000 people,its labor force consists of 500,000,and 40,000 people are unemployed,the unemployment rate is:

Accepted Answer

A)  50.0 percent. 
B)  8.0 percent. 
C)  7.4 percent. 
D)  4.0 percent 
A)  50.0 percent. 
B)  8.0 percent. 
C)  7.4 percent. 
D)  4.0 percent

Question 17

When there is no deflation or inflation in an economy:

Accepted Answer

A)  Prices of all goods change by the same percentage. 
B)  Relative prices remain unchanged. 
C)  Average prices remain unchanged. 
D)  Full employment is achieved. 
A)  Prices of all goods change by the same percentage. 
B)  Relative prices remain unchanged. 
C)  Average prices remain unchanged. 
D)  Full employment is achieved.

Question 18

Which of the following is not a basic measure of macroeconomic performance?

Accepted Answer

A)  Output growth 
B)  Unemployment 
C)  Public goods 
D)  Inflation 
A)  Output growth 
B)  Unemployment 
C)  Public goods 
D)  Inflation

Question 19

The value of a piece of land,held as an asset,increased in value by 200 percent from 1985 to 2012.Suppose during the same period average prices in the economy rose by 165 percent.The owner of the land,relative to those who do not own land,experienced a:

Accepted Answer

A)  Higher real wealth as a result of the wealth effect. 
B)  Higher real income as a result of the price effect. 
C)  Lower real income as a result of the income effect. 
D)  Higher real income as a result of the income effect. 
A)  Higher real wealth as a result of the wealth effect. 
B)  Higher real income as a result of the price effect. 
C)  Lower real income as a result of the income effect. 
D)  Higher real income as a result of the income effect.

Question 20

An office worker who loses her job because she does not have the necessary computer skills is,ceteris paribus:

Accepted Answer

A)  Frictionally unemployed. 
B)  Seasonally unemployed. 
C)  Cyclically unemployed. 
D)  Structurally unemployed. 
A)  Frictionally unemployed. 
B)  Seasonally unemployed. 
C)  Cyclically unemployed. 
D)  Structurally unemployed.

Suppose the cost of milk rose 100 percent from 1990 to 2012,and average prices for the economy rose 133 percent.Relative to others,people who purchased milk experienced a:

A basic purpose of macroeconomic theory is to:

Immediately following the years 1929-1933,the U.S.economy:

Suppose that at the start of this year you got a salary increase of 10 percent from your employer.The prices of the goods and services you typically purchase increase 10 percent during the year.At the end of the year you have experienced on balance:

The Consumer Price Index is used specifically to measure the:

According to macroeconomists,a goal for the economy is a:

Based on the News Wire article titled "Inflation and the Weimar Republic," which of the following is the best illustration of the wealth effect of inflation?

Which of the following is an example of the price effect during a period of inflation?

Table 10.1-Population and labor force data. -In Table 10.1,what is the number of unemployed in Year 1?

Deflation occurs when the:

Explain why when the price of one good or service rises it is not inflation;but when average prices rises there is inflation.

For a particular economy,the production possibilities curve shows the:

Which of the following is an example of cyclical unemployment?

If all prices and wages in the economy rise by the same percentage during the same time period,inflation does not cause a redistribution of income.

Automobile workers in Detroit are unemployed because robots are now being used on assembly lines but,at the same time,job vacancies exist for computer programmers.In this case,the automobile workers are an example of:

If the population of a country is 1,000,000 people,its labor force consists of 500,000,and 40,000 people are unemployed,the unemployment rate is:

When there is no deflation or inflation in an economy:

Which of the following is not a basic measure of macroeconomic performance?

The value of a piece of land,held as an asset,increased in value by 200 percent from 1985 to 2012.Suppose during the same period average prices in the economy rose by 165 percent.The owner of the land,relative to those who do not own land,experienced a:

An office worker who loses her job because she does not have the necessary computer skills is,ceteris paribus:

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

Exam 10: The Business Cycle

Suppose the cost of milk rose 100 percent from 1990 to 2012,and average prices for the economy rose 133 percent.Relative to others,people who purchased milk experienced a:

A basic purpose of macroeconomic theory is to:

Immediately following the years 1929-1933,the U.S.economy:

Suppose that at the start of this year you got a salary increase of 10 percent from your employer.The prices of the goods and services you typically purchase increase 10 percent during the year.At the end of the year you have experienced on balance:

The Consumer Price Index is used specifically to measure the:

According to macroeconomists,a goal for the economy is a:

Based on the News Wire article titled "Inflation and the Weimar Republic," which of the following is the best illustration of the wealth effect of inflation?

Which of the following is an example of the price effect during a period of inflation?

Table 10.1-Population and labor force data. -In Table 10.1,what is the number of unemployed in Year 1?

Deflation occurs when the:

Explain why when the price of one good or service rises it is not inflation;but when average prices rises there is inflation.

For a particular economy,the production possibilities curve shows the:

Which of the following is an example of cyclical unemployment?

If all prices and wages in the economy rise by the same percentage during the same time period,inflation does not cause a redistribution of income.

Automobile workers in Detroit are unemployed because robots are now being used on assembly lines but,at the same time,job vacancies exist for computer programmers.In this case,the automobile workers are an example of:

If the population of a country is 1,000,000 people,its labor force consists of 500,000,and 40,000 people are unemployed,the unemployment rate is:

When there is no deflation or inflation in an economy:

Which of the following is not a basic measure of macroeconomic performance?

The value of a piece of land,held as an asset,increased in value by 200 percent from 1985 to 2012.Suppose during the same period average prices in the economy rose by 165 percent.The owner of the land,relative to those who do not own land,experienced a:

An office worker who loses her job because she does not have the necessary computer skills is,ceteris paribus:

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters