Question 1

When an economy is at its natural rate of unemployment,which of the following will be true?

Accepted Answer

A)  The unemployment rate will be 0%. 
B)  The labour force participation rate will be 100%. 
C)  The unemployment rate will be greater than 0%. 
D)  Only structural unemployment as a result of technological change will exist in the economy. 
A)  The unemployment rate will be 0%. 
B)  The labour force participation rate will be 100%. 
C)  The unemployment rate will be greater than 0%. 
D)  Only structural unemployment as a result of technological change will exist in the economy.

Question 2

Using the following table,calculate real average hourly earnings for 2016,2017,and 2018.Calculate the rate of growth of real average hourly earnings from 2017 to 2018.
 $$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Nominal Average } \
\text { Hourly Earnings, \$ }
\end{array} & \text { CPI } \
\hline 2016 & 10 & 100 \
\hline 2017 & 11 & 105\
\hline 2018 & 12 & 110 \
\hline
\end{array}$$ _____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Real average hourly earnings in 2016 are

Question 3

What is the difference between the nominal interest rate and the real interest rate?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The nominal interest rate is t

Question 4

Trade unions cause unemployment because the union contract wage is set

Accepted Answer

A)  below the market wage, causing a shortage of labour. 
B)  below the market wage, causing a surplus of labour. 
C)  above the market wage, causing a surplus of labour. 
D)  above the market wage, causing a shortage of labour. 
A)  below the market wage, causing a shortage of labour. 
B)  below the market wage, causing a surplus of labour. 
C)  above the market wage, causing a surplus of labour. 
D)  above the market wage, causing a shortage of labour.

Question 5

If aggregate demand continues to increase when the economy reaches full employment,demand-pull inflation will begin to decelerate.

Accepted Answer

A) True 
 B)False

Question 6

If people who have been looking for work give up actively looking for work,ceteris paribus,the

Accepted Answer

A)  unemployment rate increases. 
B)  labour force participation rate increases. 
C)  unemployment rate decreases. 
D)  working-age population decreases. 
A)  unemployment rate increases. 
B)  labour force participation rate increases. 
C)  unemployment rate decreases. 
D)  working-age population decreases.

Question 7

Explain the changes that have occurred in the level of regulation in the Australian labour market over the past 100 years and discuss the arguments in favour of and against these changes.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Australia has moved from a highly centra

Question 8

Which of the following would reduce the labour force participation rate,all else equal?

Accepted Answer

A)  An increase in the number of people in the labour force 
B)  An increase in the unemployment rate 
C)  A decrease in the unemployment rate 
D)  An increase in the working-age population 
A)  An increase in the number of people in the labour force 
B)  An increase in the unemployment rate 
C)  A decrease in the unemployment rate 
D)  An increase in the working-age population

Question 9

When is the labour market at 'full employment'?

Accepted Answer

A)  When there is only cyclical unemployment in the economy 
B)  When there is only structural unemployment in the economy 
C)  When the unemployment rate is 0% 
D)  When there is no cyclical unemployment in the economy 
A)  When there is only cyclical unemployment in the economy 
B)  When there is only structural unemployment in the economy 
C)  When the unemployment rate is 0% 
D)  When there is no cyclical unemployment in the economy

Question 10

For each of the following,indicate if the person would be classified as employed,unemployed,or not in the labour force: (i)a 65-year-old man who left his job and is now working as a volunteer for 10 hours a week; (ii)a university graduate who has not been able to find a position using her skills and is working as a wait-person for 30 hours a week; and (iii)a manufacturing worker who is out of a job and has given up searching for a job.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

These individuals would be cla

Question 11

Of the market basket that makes up the CPI,which of the following is the smallest portion?

Accepted Answer

A)  Education 
B)  Clothing and footwear 
C)  Transportation 
D)  Housing 
A)  Education 
B)  Clothing and footwear 
C)  Transportation 
D)  Housing

Question 12

When does 'deflation' occur?

Accepted Answer

A)  When there is a sustained decline in the price level 
B)  When there is a one-time increase in the price level 
C)  When there is a sustained increase in the price level 
D)  When there is a one-time decrease in the price level 
A)  When there is a sustained decline in the price level 
B)  When there is a one-time increase in the price level 
C)  When there is a sustained increase in the price level 
D)  When there is a one-time decrease in the price level

Question 13

Looking at the following table,real wages ________ from 2016 to 2017 and real wages ________ from 2017 to 2018. $$\begin{array} { | c | c | c | } 
\hline\text { Year } & \text { Nominal Average } & \text { CPI } \
& \text { Hourly Earnings, \$ } & (2016=100)\

\hline 2016 & 10 & 100 \
\hline 2017 & 10 & 105 \
\hline 2018 & 12 & 110 \
\hline
\end{array}$$

Accepted Answer

A)  rose; rose 
B)  rose; fell 
C)  fell; fell 
D)  fell; rose 
A)  rose; rose 
B)  rose; fell 
C)  fell; fell 
D)  fell; rose

Question 14

The official unemployment rate may understate the true rate of unemployment because of

Accepted Answer

A)  increases in worker productivity over time. 
B)  discouraged workers who no longer actively look for work. 
C)  workers who have more than one job. 
D)  changes in the wage rates which may increase unemployment. 
A)  increases in worker productivity over time. 
B)  discouraged workers who no longer actively look for work. 
C)  workers who have more than one job. 
D)  changes in the wage rates which may increase unemployment.

Question 15

If you want to earn a real interest rate of 3.5% on money you lend and you expect that inflation will be 2.5%,what nominal rate of interest will you charge?

Accepted Answer

A)  1% 
B)  5% 
C)  6% 
D)  9% 
A)  1% 
B)  5% 
C)  6% 
D)  9%

Question 16

What is 'outlet bias'?

Accepted Answer

A)  The tendency for households to spend more money over time. 
B)  The tendency for households to spend their money at discount stores as prices rise. 
C)  The tendency for the quality of products to improve over time, even though the CPI does not measure changes in quality. 
D)  The tendency for consumers to purchase newer, more technologically advanced products even though they have higher prices. 
A)  The tendency for households to spend more money over time. 
B)  The tendency for households to spend their money at discount stores as prices rise. 
C)  The tendency for the quality of products to improve over time, even though the CPI does not measure changes in quality. 
D)  The tendency for consumers to purchase newer, more technologically advanced products even though they have higher prices.

Question 17

There are no costs to inflation if it is fully anticipated.

Accepted Answer

A) True 
 B)False

Question 18

Explain the three main types of unemployment and outline the types of policies that can be used to reduce each type.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

There are three main types of unemployme

Question 19

Which of the following is not an economic cost of higher than anticipated inflation?

Accepted Answer

A)  Purchasing power of people on fixed incomes will fall. 
B)  A person who has borrowed money at a fixed interest rate will be disadvantaged. 
C)  Businesses incur costs through having to change prices. 
D)  Banks who have loaned out money at a fixed interest rate will be disadvantaged. 
A)  Purchasing power of people on fixed incomes will fall. 
B)  A person who has borrowed money at a fixed interest rate will be disadvantaged. 
C)  Businesses incur costs through having to change prices. 
D)  Banks who have loaned out money at a fixed interest rate will be disadvantaged.

Question 20

How many broad categories of goods and services are in the CPI market basket,and which three largest groups comprise almost half of the market basket?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

There are 11 broad categories

When an economy is at its natural rate of unemployment,which of the following will be true?

Using the following table,calculate real average hourly earnings for 2016,2017,and 2018.Calculate the rate of growth of real average hourly earnings from 2017 to 2018. Year Nominal Average Hourly Earnings, \ CPI 2016 10 100 2017 11 105 2018 12 110 _ _

What is the difference between the nominal interest rate and the real interest rate? _ _

Trade unions cause unemployment because the union contract wage is set

If aggregate demand continues to increase when the economy reaches full employment,demand-pull inflation will begin to decelerate.

If people who have been looking for work give up actively looking for work,ceteris paribus,the

Explain the changes that have occurred in the level of regulation in the Australian labour market over the past 100 years and discuss the arguments in favour of and against these changes. _ _

Which of the following would reduce the labour force participation rate,all else equal?

When is the labour market at 'full employment'?

Of the market basket that makes up the CPI,which of the following is the smallest portion?

When does 'deflation' occur?

Looking at the following table,real wages from 2016 to 2017 and real wages from 2017 to 2018. Year Nominal Average CPI Hourly Earnings, \ (2016=100) 2016 10 100 2017 10 105 2018 12 110

The official unemployment rate may understate the true rate of unemployment because of

If you want to earn a real interest rate of 3.5% on money you lend and you expect that inflation will be 2.5%,what nominal rate of interest will you charge?

What is 'outlet bias'?

There are no costs to inflation if it is fully anticipated.

Explain the three main types of unemployment and outline the types of policies that can be used to reduce each type. _ _

Which of the following is not an economic cost of higher than anticipated inflation?

How many broad categories of goods and services are in the CPI market basket,and which three largest groups comprise almost half of the market basket? _ _

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters

Exam 14: Unemployment and Inflation

When an economy is at its natural rate of unemployment,which of the following will be true?

What is the difference between the nominal interest rate and the real interest rate? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Trade unions cause unemployment because the union contract wage is set

If aggregate demand continues to increase when the economy reaches full employment,demand-pull inflation will begin to decelerate.

If people who have been looking for work give up actively looking for work,ceteris paribus,the

Which of the following would reduce the labour force participation rate,all else equal?

When is the labour market at 'full employment'?

Of the market basket that makes up the CPI,which of the following is the smallest portion?

When does 'deflation' occur?

Looking at the following table,real wages ________ from 2016 to 2017 and real wages ________ from 2017 to 2018. Year Nominal Average CPI Hourly Earnings, \ (2016=100) 2016 10 100 2017 10 105 2018 12 110

The official unemployment rate may understate the true rate of unemployment because of

If you want to earn a real interest rate of 3.5% on money you lend and you expect that inflation will be 2.5%,what nominal rate of interest will you charge?

What is 'outlet bias'?

There are no costs to inflation if it is fully anticipated.

Which of the following is not an economic cost of higher than anticipated inflation?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters

What is the difference between the nominal interest rate and the real interest rate? _ _

Looking at the following table,real wages from 2016 to 2017 and real wages from 2017 to 2018. Year Nominal Average CPI Hourly Earnings, \ (2016=100) 2016 10 100 2017 10 105 2018 12 110