Exam 14: Inflation and Unemployment

In an economic expansion, people used their credit cards to purchase many goods. But now the economy is in recession, people must use much of their reduced incomes to pay back debts. If employees manufacturing the goods people used to buy are laid off, they will suffer from:

Deflation means a decrease in:

Which of the following categories of people are in the labour force?

Which of the following would understate the consumer price index?

In Australia, the natural rate of unemployment has:

The CPI is called a fixed-weight price index because:

The civilian labour force consists of:

An increase in the average price level of goods and services is called:

The CPI is called:

When hyperinflation occurs:

When the rate of unemployment is equal to the sum of seasonal, frictional and structural unemployment rates then:

Assume that the real rate of interest is 5 per cent and a lender charges a nominal interest rate of 15 per cent. If a borrower expects that the rate of inflation next year will be 10 per cent and the actual rate of inflation next year is 12 per cent:

An example of cyclical unemployment is a/an:

If the inflation rate rises unexpectedly, the winners will be:

Andrea Burris lost her job in a company layoff five months ago. She would take a job if one was offered, but she has given up looking for work until the economy improves. She is:

Full employment means:

Suppose your nominal income this year is 5 per cent higher than last year. If the inflation rate for the period was 3 per cent, then your real income:

A person pays cash for a house in 1990 for $200 000 and sells it in 2000 for $400 000. Over the same period the CPI has risen from its base index to 200. In terms of this asset, the purchasing power of this person:

Consider borrowers and lenders who agree to loans with fixed nominal interest rates. If inflation is higher than what the borrowers and lenders expected, then who benefits from lower real interest rates?

A person pays cash for a house in 1990 for $100 000 and sells it in 2000 for $150 000. Over the same period the CPI has risen from its base index to 200. In terms of this asset, the purchasing power of this person: