Question 1

If an increase in the price of some goods outweighs other prices that remain constant or decrease then there is:

Accepted Answer

A)  Inflation. 
B)  Deflation. 
C)  Stagflation. 
D)  Reflation. 
A)  Inflation. 
B)  Deflation. 
C)  Stagflation. 
D)  Reflation.

Question 2

The U.S."full employment" goal is between zero and two percent unemployment.

Accepted Answer

A) True 
 B)False

Question 3

The uncertainty of inflation can cause a decrease in consumption but will not impact business spending and production.

Accepted Answer

A) True 
 B)False

Question 4

People who are not working for pay but are actively looking for work are not included in the labor force.

Accepted Answer

A) True 
 B)False

Question 5

A teenager without a high school diploma is unable to find work because all of the available jobs require a certain minimum reading level.Which of the following best characterizes the teenager's circumstances?

Accepted Answer

A)  Frictionally unemployed 
B)  Structurally unemployed 
C)  Cyclical unemployed 
D)  Seasonally unemployed 
A)  Frictionally unemployed 
B)  Structurally unemployed 
C)  Cyclical unemployed 
D)  Seasonally unemployed

Question 6

Inflation acts like a tax because:

Accepted Answer

A)  The government tends to benefit during periods of inflation. 
B)  It takes income and wealth from some people and gives it to others. 
C)  Inflation pushes everyone into higher tax brackets. 
D)  Everyone loses purchasing power during periods of inflation just like everyone must pay taxes. 
A)  The government tends to benefit during periods of inflation. 
B)  It takes income and wealth from some people and gives it to others. 
C)  Inflation pushes everyone into higher tax brackets. 
D)  Everyone loses purchasing power during periods of inflation just like everyone must pay taxes.

Question 7

Samantha quit her job in the city to look for a job in the country.While she is looking,Samantha experiences _______ unemployment.

Accepted Answer

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

Question 8

One reason our full employment goal is not zero percent is because:

Accepted Answer

A)  Frictional unemployment will always exist. 
B)  Cyclical unemployment will always exist. 
C)  Population growth makes such a goal impossible. 
D)  Discouraged workers make such a goal impossible. 
A)  Frictional unemployment will always exist. 
B)  Cyclical unemployment will always exist. 
C)  Population growth makes such a goal impossible. 
D)  Discouraged workers make such a goal impossible.

Question 9

The unemployment rate is calculated by dividing:

Accepted Answer

A)  The number of unemployed by the size of the population and multiplying by 100. 
B)  1.0 by the percentage of the employed population and multiplying by 100. 
C)  The number of unemployed by the size of the labor force. 
D)  The number of employed by the labor force and multiplying by 100. 
A)  The number of unemployed by the size of the population and multiplying by 100. 
B)  1.0 by the percentage of the employed population and multiplying by 100. 
C)  The number of unemployed by the size of the labor force. 
D)  The number of employed by the labor force and multiplying by 100.

Question 10

Inflation is an increase in the average level of prices.

Accepted Answer

A) True 
 B)False

Question 11

Table 10.2-Labor force data  
-In Table 10.2,what is the number of unemployed in Year 10?

Accepted Answer

A)  70 million 
B)  40 million 
C)  30 million 
D)  20 million 
A)  70 million 
B)  40 million 
C)  30 million 
D)  20 million

Question 12

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

Accepted Answer

A)  You buy lots of peanut butter,which decreases in price while the price level rises 
B)  You own stock that increases in value more rapidly than the price level does 
C)  You own a house,and its value rises at the same rate as the price level does 
D)  Your income is fixed and does not increase even though the price level is rising 
A)  You buy lots of peanut butter,which decreases in price while the price level rises 
B)  You own stock that increases in value more rapidly than the price level does 
C)  You own a house,and its value rises at the same rate as the price level does 
D)  Your income is fixed and does not increase even though the price level is rising

Question 13

When the unemployment rate falls to the full-employment level:

Accepted Answer

A)  There is increased concern about inflation. 
B)  Many resources are idle. 
C)  The size of the labor force decreases. 
D)  There is increased concern about deflation. 
A)  There is increased concern about inflation. 
B)  Many resources are idle. 
C)  The size of the labor force decreases. 
D)  There is increased concern about deflation.

Question 14

Which of the following is a basic measure of macroeconomic performance?

Accepted Answer

A)  The U.S.stock market 
B)  Growth in output 
C)  The U.S.bond market 
D)  Population growth 
A)  The U.S.stock market 
B)  Growth in output 
C)  The U.S.bond market 
D)  Population growth

Question 15

During periods of inflation,all prices will increase or at least remain constant.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is likely if an economy is in a recession or headed for one?

Accepted Answer

A)  An increase in consumer confidence 
B)  An increase in the rate of inflation 
C)  An increase in unemployment 
D)  An increase in the rate of output 
A)  An increase in consumer confidence 
B)  An increase in the rate of inflation 
C)  An increase in unemployment 
D)  An increase in the rate of output

Question 17

If the population of a country is 1,000,000 people,its labor force consists of 600,000,and 60,000 people are unemployed,the unemployment rate is:

Accepted Answer

A)  6.0 percent. 
B)  6.6 percent. 
C)  10.0 percent. 
D)  60.0 percent. 
A)  6.0 percent. 
B)  6.6 percent. 
C)  10.0 percent. 
D)  60.0 percent.

Question 18

The CPI tends to overestimate the rate of inflation because:

Accepted Answer

A)  Only the goods and services that consumers buy are included in the calculation. 
B)  Some price increases are an indication of higher quality products. 
C)  The CPI measures changes in average prices,not changes in relative prices. 
D)  Some price increases are simply the result of greedy producers and sellers. 
A)  Only the goods and services that consumers buy are included in the calculation. 
B)  Some price increases are an indication of higher quality products. 
C)  The CPI measures changes in average prices,not changes in relative prices. 
D)  Some price increases are simply the result of greedy producers and sellers.

Question 19

Those with savings accounts typically benefit from periods of inflation.

Accepted Answer

A) True 
 B)False

Question 20

If a market basket of goods cost $100 in the base year and $108 in a later year,then average prices have increased by:

Accepted Answer

A)  8 percent. 
B)  92.5 percent. 
C)  108 percent. 
D)  208 percent. 
A)  8 percent. 
B)  92.5 percent. 
C)  108 percent. 
D)  208 percent.

If an increase in the price of some goods outweighs other prices that remain constant or decrease then there is:

The U.S."full employment" goal is between zero and two percent unemployment.

The uncertainty of inflation can cause a decrease in consumption but will not impact business spending and production.

People who are not working for pay but are actively looking for work are not included in the labor force.

A teenager without a high school diploma is unable to find work because all of the available jobs require a certain minimum reading level.Which of the following best characterizes the teenager's circumstances?

Inflation acts like a tax because:

Samantha quit her job in the city to look for a job in the country.While she is looking,Samantha experiences _______ unemployment.

One reason our full employment goal is not zero percent is because:

The unemployment rate is calculated by dividing:

Inflation is an increase in the average level of prices.

Table 10.2-Labor force data -In Table 10.2,what is the number of unemployed in Year 10?

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

When the unemployment rate falls to the full-employment level:

Which of the following is a basic measure of macroeconomic performance?

During periods of inflation,all prices will increase or at least remain constant.

Which of the following is likely if an economy is in a recession or headed for one?

If the population of a country is 1,000,000 people,its labor force consists of 600,000,and 60,000 people are unemployed,the unemployment rate is:

The CPI tends to overestimate the rate of inflation because:

Those with savings accounts typically benefit from periods of inflation.

If a market basket of goods cost $100 in the base year and $108 in a later year,then average prices have increased by:

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

If an increase in the price of some goods outweighs other prices that remain constant or decrease then there is:

The U.S."full employment" goal is between zero and two percent unemployment.

The uncertainty of inflation can cause a decrease in consumption but will not impact business spending and production.

People who are not working for pay but are actively looking for work are not included in the labor force.

A teenager without a high school diploma is unable to find work because all of the available jobs require a certain minimum reading level.Which of the following best characterizes the teenager's circumstances?

Inflation acts like a tax because:

Samantha quit her job in the city to look for a job in the country.While she is looking,Samantha experiences _______ unemployment.

One reason our full employment goal is not zero percent is because:

The unemployment rate is calculated by dividing:

Inflation is an increase in the average level of prices.

Table 10.2-Labor force data -In Table 10.2,what is the number of unemployed in Year 10?

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

When the unemployment rate falls to the full-employment level:

Which of the following is a basic measure of macroeconomic performance?

During periods of inflation,all prices will increase or at least remain constant.

Which of the following is likely if an economy is in a recession or headed for one?

If the population of a country is 1,000,000 people,its labor force consists of 600,000,and 60,000 people are unemployed,the unemployment rate is:

The CPI tends to overestimate the rate of inflation because:

Those with savings accounts typically benefit from periods of inflation.

If a market basket of goods cost $100 in the base year and $108 in a later year,then average prices have increased by:

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