Question 1

If the real interest rate is 8% and the inflation rate is 3%,then the nominal interest rate is -.

Accepted Answer

A)  4% 
B)  8% 
C)  11% 
D)  -4% 
A)  4% 
B)  8% 
C)  11% 
D)  -4%

Question 2

In Australia in 2016,approximately how many people were in the labour force?

Accepted Answer

A)  6.3 million 
B)  12 million 
C)  18.3 million 
D)  19.6 million 
A)  6.3 million 
B)  12 million 
C)  18.3 million 
D)  19.6 million

Question 3

Why are policy makers concerned about rising unemployment rates?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

There are significant economic costs due

Question 4

Which of the following is an economic cost of rising unemployment rates?

Accepted Answer

A)  Loss of GDP 
B)  An inward shift in the production possibility frontier 
C)  A fall in the amount of unemployment benefits paid by the government 
D)  An increase in income levels, as people who lose their jobs move onto the unemployment benefits 
A)  Loss of GDP 
B)  An inward shift in the production possibility frontier 
C)  A fall in the amount of unemployment benefits paid by the government 
D)  An increase in income levels, as people who lose their jobs move onto the unemployment benefits

Question 5

Using the following table,calculate the real average wage for 1998 and 2018.Calculate the rate of growth of real average wages from 1998 to 2018.Are workers in this country better off in terms of the purchasing power of a dollar in 1998 or 2018? Explain why.
 $$\begin{array} { | c | c | c | } 
\hline\text { Year } & \text { Nominal } & \text { CPI } \
& \text { Average Wage } & (2010=100)\ 
\hline 1998 & \$ 2.00 & 49.30 \
\hline 2018 & \$ 6.00 & 190.20 \
\hline
\end{array}$$ _____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The real average wage in 1998 is × 100 =

Question 6

With 'cost-push inflation',initially

Accepted Answer

A)  the price level and real GDP both increase. 
B)  only real GDP changes while the price level remains constant. 
C)  the price level rises and real GDP declines. 
D)  All of these options are correct. 
A)  the price level and real GDP both increase. 
B)  only real GDP changes while the price level remains constant. 
C)  the price level rises and real GDP declines. 
D)  All of these options are correct.

Question 7

The 'PPI' is the -.

Accepted Answer

A)  price parity index 
B)  prime producer index 
C)  producer price index 
D)  production performance indicator 
A)  price parity index 
B)  prime producer index 
C)  producer price index 
D)  production performance indicator

Question 8

Looking at the following table,what is the rate of growth of the average price level from 2016 to 2017? $$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Nominal Average } \
\text { Hourly Earnings }
\end{array} & \begin{array} { c } 
\text { CPI } \
( \mathbf { 2 0 1 6 } = \mathbf { 1 0 0 } )
\end{array} \
\hline 2016 & 10 & 100 \
\hline 2017 & 10 & 105 \
\hline 2018 & 12 & 110 \
\hline
\end{array}$$

Accepted Answer

A)  1% 
B)  2% 
C)  3% 
D)  5% 
A)  1% 
B)  2% 
C)  3% 
D)  5%

Question 9

Discuss the trends in labour force participation in Australia over the past 40 years.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Overall,the labour force participation r

Question 10

When is the labour market considered to be at 'full employment'?

Accepted Answer

A)  When there are no unemployed workers 
B)  When all unemployment is frictional or structural 
C)  When all unemployment is voluntary 
D)  When there are more unemployed workers than job vacancies 
A)  When there are no unemployed workers 
B)  When all unemployment is frictional or structural 
C)  When all unemployment is voluntary 
D)  When there are more unemployed workers than job vacancies

Question 11

Which of the following describes the accuracy of the Consumer Price Index (CPI)?

Accepted Answer

A)  Changes in the CPI accurately reflect the true rate of inflation. 
B)  Changes in the CPI understate the true rate of inflation. 
C)  Changes in the CPI overstate the true rate of inflation. 
D)  Changes in the CPI are unrelated to the true rate of inflation. 
A)  Changes in the CPI accurately reflect the true rate of inflation. 
B)  Changes in the CPI understate the true rate of inflation. 
C)  Changes in the CPI overstate the true rate of inflation. 
D)  Changes in the CPI are unrelated to the true rate of inflation.

Question 12

'Anticipated inflation' increases the amount of taxation paid by firms and individuals.

Accepted Answer

A) True 
 B)False

Question 13

Eliminating 'structural unemployment' would be good for the economy.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not generally a cost posed by inflation?

Accepted Answer

A)  Inflation reduces the affordability of goods and services to the average consumer. 
B)  Consumers and firms lose purchasing power to the extent that money loses value. 
C)  Firms must pay for changing prices on products and printing new catalogues. 
D)  Banks can lose if they under-predict inflation and charge an interest rate that does not completely compensate for inflation. 
A)  Inflation reduces the affordability of goods and services to the average consumer. 
B)  Consumers and firms lose purchasing power to the extent that money loses value. 
C)  Firms must pay for changing prices on products and printing new catalogues. 
D)  Banks can lose if they under-predict inflation and charge an interest rate that does not completely compensate for inflation.

Question 15

The unemployment rate is the number of unemployed divided by the working-age population.

Accepted Answer

A) True 
 B)False

Question 16

Suppose an economy has only three goods,and the typical family purchases the amounts given in the following table.If 2012 is the base year,then what is the CPI for 2017? $$\begin{array} { | c | c | c | c | c | c | } 
\hline \text { Product } & \begin{array} { c } 
\text { Quantity } \
\text { (2012) }
\end{array} & \begin{array} { c } 
\text { Price } \
\text { (2012) }
\end{array} & \begin{array} { c } 
\text { Expenditures } \
\mathbf { ( 2 0 1 2 ) }
\end{array} & \begin{array} { c } 
\text { Price } \
\text { (2017) }
\end{array} & \begin{array} { c } 
\text { Expenditures (on base } \
\text { year quantities) (2017) }
\end{array} \
\hline \text { Computers } & 1 & \$ 1500 & \$ 1500 & \$ 1200 & \$ 1200 \
\hline \text { Books } & 10 & \$ 25 & \$ 250 & \$ 30 & \$ 300 \
\hline \text { Burgers } & 50 & \$ 1.00 & \$ 50 & \$ 2.00 & \$ 100 \
\hline \text { Total } & & & \$ 1800 & & \$ 1600 \
\hline
\end{array}$$

Accepted Answer

A)  89 
B)  125 
C)  212 
D)  163 
A)  89 
B)  125 
C)  212 
D)  163

Question 17

Explain what economists mean by 'full employment' and why this rate of unemployment is not zero.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Full employment occurs in the economy wh

Question 18

What is the broadest measure of the price level which includes all final goods and services?

Accepted Answer

A)  Producer price index 
B)  Consumer price index 
C)  Wholesale price index 
D)  GDP deflator 
A)  Producer price index 
B)  Consumer price index 
C)  Wholesale price index 
D)  GDP deflator

Question 19

Enterprise bargaining is the negotiation of wages and working conditions

Accepted Answer

A)  between trade unions and the government. 
B)  at the workplace level. 
C)  between employers and the government. 
D)  through the compulsory arbitration system. 
A)  between trade unions and the government. 
B)  at the workplace level. 
C)  between employers and the government. 
D)  through the compulsory arbitration system.

Question 20

For most of the twentieth century,Australia had a system of wage determination know as

Accepted Answer

A)  compulsory arbitration. 
B)  enterprise bargaining. 
C)  closed union shop. 
D)  open union shop. 
A)  compulsory arbitration. 
B)  enterprise bargaining. 
C)  closed union shop. 
D)  open union shop.

If the real interest rate is 8% and the inflation rate is 3%,then the nominal interest rate is -.

In Australia in 2016,approximately how many people were in the labour force?

Why are policy makers concerned about rising unemployment rates? _ _

Which of the following is an economic cost of rising unemployment rates?

With 'cost-push inflation',initially

The 'PPI' is the -.

Looking at the following table,what is the rate of growth of the average price level from 2016 to 2017? Year Nominal Average Hourly Earnings CPI (=) 2016 10 100 2017 10 105 2018 12 110

Discuss the trends in labour force participation in Australia over the past 40 years. _ _

When is the labour market considered to be at 'full employment'?

Which of the following describes the accuracy of the Consumer Price Index (CPI)?

'Anticipated inflation' increases the amount of taxation paid by firms and individuals.

Eliminating 'structural unemployment' would be good for the economy.

Which of the following is not generally a cost posed by inflation?

The unemployment rate is the number of unemployed divided by the working-age population.

Explain what economists mean by 'full employment' and why this rate of unemployment is not zero. _ _

What is the broadest measure of the price level which includes all final goods and services?

Enterprise bargaining is the negotiation of wages and working conditions

For most of the twentieth century,Australia had a system of wage determination know as

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

If the real interest rate is 8% and the inflation rate is 3%,then the nominal interest rate is -.

In Australia in 2016,approximately how many people were in the labour force?

Why are policy makers concerned about rising unemployment rates? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Which of the following is an economic cost of rising unemployment rates?

With 'cost-push inflation',initially

The 'PPI' is the -.

Looking at the following table,what is the rate of growth of the average price level from 2016 to 2017? Year Nominal Average Hourly Earnings CPI (=) 2016 10 100 2017 10 105 2018 12 110

Discuss the trends in labour force participation in Australia over the past 40 years. _____________________________________________________________________________________________ _____________________________________________________________________________________________

When is the labour market considered to be at 'full employment'?

Which of the following describes the accuracy of the Consumer Price Index (CPI)?

'Anticipated inflation' increases the amount of taxation paid by firms and individuals.

Eliminating 'structural unemployment' would be good for the economy.

Which of the following is not generally a cost posed by inflation?

The unemployment rate is the number of unemployed divided by the working-age population.

Explain what economists mean by 'full employment' and why this rate of unemployment is not zero. _____________________________________________________________________________________________ _____________________________________________________________________________________________

What is the broadest measure of the price level which includes all final goods and services?

Enterprise bargaining is the negotiation of wages and working conditions

For most of the twentieth century,Australia had a system of wage determination know as

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

Why are policy makers concerned about rising unemployment rates? _ _

Discuss the trends in labour force participation in Australia over the past 40 years. _ _

Explain what economists mean by 'full employment' and why this rate of unemployment is not zero. _ _