Question 1

An example of a seasonally unemployed worker would be

Accepted Answer

A) a software engineer who is laid off because of declining demand for the software he writes. 
B) a day care provider who quits his job to go back to school. 
C) a General Motors employee loses her job because the company is downsizing its work force. 
D) a ski lift operator who loses his job when the snow melts in the spring. 
E) a mother who quits her job to stay home with her children. 
A) a software engineer who is laid off because of declining demand for the software he writes. 
B) a day care provider who quits his job to go back to school. 
C) a General Motors employee loses her job because the company is downsizing its work force. 
D) a ski lift operator who loses his job when the snow melts in the spring. 
E) a mother who quits her job to stay home with her children.

Question 2

The labor force participation rates of women have rapidly increased since 1948.

Accepted Answer

A) True 
 B)False

Question 3

The deflation of the 1930s impacted the U.S.economy because it led some consumers to ________ and because it ________.

Accepted Answer

A) postpone purchases while they waited for prices to fall even lower; increased the burden on borrowers 
B) demand higher wages in anticipation of prices eventually rising again; increased manufacturing since firms could afford to hire more labor 
C) borrow more money since money was now cheap; reduced the amount of money consumers would have to pay back on their outstanding loans 
D) increase purchases to take advantage of the falling prices; increased the burden on lenders 
A) postpone purchases while they waited for prices to fall even lower; increased the burden on borrowers 
B) demand higher wages in anticipation of prices eventually rising again; increased manufacturing since firms could afford to hire more labor 
C) borrow more money since money was now cheap; reduced the amount of money consumers would have to pay back on their outstanding loans 
D) increase purchases to take advantage of the falling prices; increased the burden on lenders

Question 4

Describe how a lender can lose during inflation if the inflation is unanticipated and the loan is a fixed-interest-rate loan.How would a variable-interest-rate loan (one that adjusts over the contract period)eliminate these loses?

Accepted Answer

Lenders require compensation for inflati

Question 5

The broadest measure of the price level that includes all final goods and services is

Accepted Answer

A) the producer price index . 
B) the consumer price index. 
C) the GDP deflator. 
D) the wholesale price index. 
A) the producer price index . 
B) the consumer price index. 
C) the GDP deflator. 
D) the wholesale price index.

Question 6

Which of the following policies would reduce frictional unemployment?

Accepted Answer

A) a decrease in the minimum wage 
B) a job retraining program 
C) implementing an unemployment insurance policy 
D) building an online job database that helps workers find jobs 
A) a decrease in the minimum wage 
B) a job retraining program 
C) implementing an unemployment insurance policy 
D) building an online job database that helps workers find jobs

Question 7

The nominal interest rate plus the inflation rate equals the real interest rate.

Accepted Answer

A) True 
 B)False

Question 8

A student who just graduated from college but has not found a job would most likely be

Accepted Answer

A) frictionally unemployed. 
B) structurally unemployed. 
C) cyclically unemployed. 
D) seasonally unemployed. 
A) frictionally unemployed. 
B) structurally unemployed. 
C) cyclically unemployed. 
D) seasonally unemployed.

Question 9

In the modern U.S.economy,the typical unemployed person stays unemployed for

Accepted Answer

A) a relatively long time,over a year. 
B) a relatively short time,less than six months. 
C) a long time during expansions and a short time during recessions. 
D) an amount of time that is hard to quantify. 
A) a relatively long time,over a year. 
B) a relatively short time,less than six months. 
C) a long time during expansions and a short time during recessions. 
D) an amount of time that is hard to quantify.

Question 10

Table 9-6
  
-Refer to Table 9-6.Consider the following values of the consumer price index for 1996,1997,and 1998: The inflation rate for 1997 was equal to

Accepted Answer

A) 1.2 percent. 
B) 2.0 percent. 
C) 2.5 percent. 
D) 4.0 percent. 
A) 1.2 percent. 
B) 2.0 percent. 
C) 2.5 percent. 
D) 4.0 percent.

Question 11

The full-employment rate of unemployment is zero.

Accepted Answer

A) True 
 B)False

Question 12

Most economists believe that biases cause changes in the CPI to overstate the inflation rate by ________ percentage points.

Accepted Answer

A) 0.1 to 0.2 
B) 0.2 to 2.0 
C) 0.4 
D) 0.5 to 1.0 
E) 1.0 to 3.0 
A) 0.1 to 0.2 
B) 0.2 to 2.0 
C) 0.4 
D) 0.5 to 1.0 
E) 1.0 to 3.0

Question 13

The equilibrium wage in a local labor market is $6 per hour.If a minimum wage of $8 per hour is imposed,which of the following will occur?

Accepted Answer

A) There will be an increase in unemployment. 
B) There will be an increase in the quantity of labor demanded by firms. 
C) There will be a decrease in the quantity of labor supplied by households. 
D) All of the above will occur. 
A) There will be an increase in unemployment. 
B) There will be an increase in the quantity of labor demanded by firms. 
C) There will be a decrease in the quantity of labor supplied by households. 
D) All of the above will occur.

Question 14

When deflation occurs,

Accepted Answer

A) the real interest rate is greater than the nominal interest rate. 
B) the nominal interest rate is greater than the real interest rate. 
C) the nominal interest rate is equal to the real interest rate and inflation is negative. 
D) the nominal interest rate is equal to the real interest rate and inflation is positive. 
A) the real interest rate is greater than the nominal interest rate. 
B) the nominal interest rate is greater than the real interest rate. 
C) the nominal interest rate is equal to the real interest rate and inflation is negative. 
D) the nominal interest rate is equal to the real interest rate and inflation is positive.

Question 15

If cyclical unemployment is eliminated in the economy,then

Accepted Answer

A) the economy is considered to be at full employment. 
B) the unemployment rate is below the natural rate of unemployment. 
C) the unemployment rate is above the natural rate of unemployment. 
D) the economy is at less than full employment. 
A) the economy is considered to be at full employment. 
B) the unemployment rate is below the natural rate of unemployment. 
C) the unemployment rate is above the natural rate of unemployment. 
D) the economy is at less than full employment.

Question 16

The unemployment rate in the United States is typically lower than in Western Europe because the United States has tougher requirements for the unemployed to receive government payments.

Accepted Answer

A) True 
 B)False

Question 17

Suppose you borrow $1,000 at an interest rate of 12 percent.If the expected real interest rate is 5 percent,then the rate of inflation over the upcoming year that would be most beneficial to you would be a rate of inflation

Accepted Answer

A) equal to 0 percent. 
B) greater than 7 percent. 
C) equal to 7 percent. 
D) less than 7 percent. 
A) equal to 0 percent. 
B) greater than 7 percent. 
C) equal to 7 percent. 
D) less than 7 percent.

Question 18

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

Accepted Answer

Full employment occurs in the macro econ

Question 19

The consumer price index is the

Accepted Answer

A) cost of a market basket of goods and services typically consumed in the base year. 
B) cost of a market basket of goods and services typically consumed in the current period. 
C) average of the prices of the goods and services purchased by a typical urban family of four. 
D) average of the prices of new final goods and services produced in the economy over a period of time. 
A) cost of a market basket of goods and services typically consumed in the base year. 
B) cost of a market basket of goods and services typically consumed in the current period. 
C) average of the prices of the goods and services purchased by a typical urban family of four. 
D) average of the prices of new final goods and services produced in the economy over a period of time.

Question 20

Suppose that at the beginning of a loan contract,the real interest rate is 4% and expected inflation is currently 6%.If actual inflation turns out to be 7% over the loan contract period,then

Accepted Answer

A) borrowers gain 1% of the loan value. 
B) lenders gain 1% of the loan value. 
C) borrowers lose 3% of the loan value. 
D) lenders gain 3% of the loan value. 
A) borrowers gain 1% of the loan value. 
B) lenders gain 1% of the loan value. 
C) borrowers lose 3% of the loan value. 
D) lenders gain 3% of the loan value.

An example of a seasonally unemployed worker would be

The labor force participation rates of women have rapidly increased since 1948.

The deflation of the 1930s impacted the U.S.economy because it led some consumers to and because it .

Describe how a lender can lose during inflation if the inflation is unanticipated and the loan is a fixed-interest-rate loan.How would a variable-interest-rate loan (one that adjusts over the contract period)eliminate these loses?

The broadest measure of the price level that includes all final goods and services is

Which of the following policies would reduce frictional unemployment?

The nominal interest rate plus the inflation rate equals the real interest rate.

A student who just graduated from college but has not found a job would most likely be

In the modern U.S.economy,the typical unemployed person stays unemployed for

Table 9-6 -Refer to Table 9-6.Consider the following values of the consumer price index for 1996,1997,and 1998: The inflation rate for 1997 was equal to

The full-employment rate of unemployment is zero.

Most economists believe that biases cause changes in the CPI to overstate the inflation rate by ________ percentage points.

The equilibrium wage in a local labor market is $6 per hour.If a minimum wage of $8 per hour is imposed,which of the following will occur?

When deflation occurs,

If cyclical unemployment is eliminated in the economy,then

The unemployment rate in the United States is typically lower than in Western Europe because the United States has tougher requirements for the unemployed to receive government payments.

Suppose you borrow $1,000 at an interest rate of 12 percent.If the expected real interest rate is 5 percent,then the rate of inflation over the upcoming year that would be most beneficial to you would be a rate of inflation

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

The consumer price index is the

Suppose that at the beginning of a loan contract,the real interest rate is 4% and expected inflation is currently 6%.If actual inflation turns out to be 7% over the loan contract period,then

Economics: Foundations and Models

Trade-Offs,comparative Advantage,and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 9: Unemployment and Inflation

An example of a seasonally unemployed worker would be

The labor force participation rates of women have rapidly increased since 1948.

The deflation of the 1930s impacted the U.S.economy because it led some consumers to ________ and because it ________.

Describe how a lender can lose during inflation if the inflation is unanticipated and the loan is a fixed-interest-rate loan.How would a variable-interest-rate loan (one that adjusts over the contract period)eliminate these loses?

The broadest measure of the price level that includes all final goods and services is

Which of the following policies would reduce frictional unemployment?

The nominal interest rate plus the inflation rate equals the real interest rate.

A student who just graduated from college but has not found a job would most likely be

In the modern U.S.economy,the typical unemployed person stays unemployed for

Table 9-6 -Refer to Table 9-6.Consider the following values of the consumer price index for 1996,1997,and 1998: The inflation rate for 1997 was equal to

The full-employment rate of unemployment is zero.

Most economists believe that biases cause changes in the CPI to overstate the inflation rate by ________ percentage points.

The equilibrium wage in a local labor market is $6 per hour.If a minimum wage of $8 per hour is imposed,which of the following will occur?

When deflation occurs,

If cyclical unemployment is eliminated in the economy,then

The unemployment rate in the United States is typically lower than in Western Europe because the United States has tougher requirements for the unemployed to receive government payments.

Suppose you borrow $1,000 at an interest rate of 12 percent.If the expected real interest rate is 5 percent,then the rate of inflation over the upcoming year that would be most beneficial to you would be a rate of inflation

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

The consumer price index is the

Suppose that at the beginning of a loan contract,the real interest rate is 4% and expected inflation is currently 6%.If actual inflation turns out to be 7% over the loan contract period,then

Economics: Foundations and Models

Trade-Offs,comparative Advantage,and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

The deflation of the 1930s impacted the U.S.economy because it led some consumers to and because it .