Question 1

Cyclical unemployment is caused by:

Accepted Answer

A)  shifts in the job skills required in the economy. 
B)  seasonal layoffs. 
C)  declines in real GDP. 
D)  cyclical changes in the job skills among workers. 
A)  shifts in the job skills required in the economy. 
B)  seasonal layoffs. 
C)  declines in real GDP. 
D)  cyclical changes in the job skills among workers.

Question 2

When actual real GDP output is below full-employment real GDP, the GDP measures the cost of cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 3

During the 1990s, which of the following countries had the highest unemployment rate?

Accepted Answer

A)  The United States. 
B)  Japan. 
C)  Australia. 
D)  France. 
A)  The United States. 
B)  Japan. 
C)  Australia. 
D)  France.

Question 4

The civilian labour force is:

Accepted Answer

A)  the number of people (including students) aged 15 and over who are unemployed. 
B)  the number of people (including students) aged 15 and over who are either employed or unemployed. 
C)  the number of people (including students) aged 15 and over who are either employed or unemployed, excluding people in hospitals. 
D)  the number of people (excluding students) aged 15 and over who are either employed or unemployed, excluding members of the armed forces and certain categories of people. 
A)  the number of people (including students) aged 15 and over who are unemployed. 
B)  the number of people (including students) aged 15 and over who are either employed or unemployed. 
C)  the number of people (including students) aged 15 and over who are either employed or unemployed, excluding people in hospitals. 
D)  the number of people (excluding students) aged 15 and over who are either employed or unemployed, excluding members of the armed forces and certain categories of people.

Question 5

Part-time workers who want full-time work are counted as only partially employed in the official unemployment statistics.

Accepted Answer

A) True 
 B)False

Question 6

Narrbegin Exhibit 13.1 Consumer price index
 $$\begin{array} {| c | c |} 
\hline \text { Year } & \text { Consumer price index } \
\hline 1 & 100 \
\hline 2 & 100 \
\hline 3 & 105 \
\hline 4 & 125 \
\hline 5 & 150 \
\hline
\end{array}$$
-As shown in Exhibit 13.1, the rate of inflation for Year 2 is:

Accepted Answer

A)  5 per cent. 
B)  10 per cent. 
C)  20 per cent. 
D)  25 per cent. 
A)  5 per cent. 
B)  10 per cent. 
C)  20 per cent. 
D)  25 per cent.

Question 7

Some economists claim that the natural rate of unemployment has increased over the past 30 years because:

Accepted Answer

A)  of a decrease in the participation rate of women in the workforce. 
B)  of hypocrites. 
C)  the long-term unemployed gain valuable skills while they are out of work. 
D)  unemployment benefits are high enough to create incentives not to work. 
A)  of a decrease in the participation rate of women in the workforce. 
B)  of hypocrites. 
C)  the long-term unemployed gain valuable skills while they are out of work. 
D)  unemployment benefits are high enough to create incentives not to work.

Question 8

An example of structural unemployment includes:

Accepted Answer

A)  a textile worker who quits one job and waits for the new job to begin. 
B)  the worker of the factory that has closed and he lacks the skills to obtain a new job. 
C)  a computer programmer who becomes rich and leaves the labour force. 
D)  a construction worker who was temporarily laid off due to the end of the construction contract. 
A)  a textile worker who quits one job and waits for the new job to begin. 
B)  the worker of the factory that has closed and he lacks the skills to obtain a new job. 
C)  a computer programmer who becomes rich and leaves the labour force. 
D)  a construction worker who was temporarily laid off due to the end of the construction contract.

Question 9

Demand-pull inflation is due to:

Accepted Answer

A)  minimum wage laws. 
B)  labour cost increases. 
C)  excess total spending. 
D)  tax increases. 
A)  minimum wage laws. 
B)  labour cost increases. 
C)  excess total spending. 
D)  tax increases.

Question 10

The CPI measures:

Accepted Answer

A)  changes in the prices of imported goods and services. 
B)  changes in the prices of exported goods and services. 
C)  changes in the production of imported goods and services. 
D)  changes in the production of exported goods and services. 
A)  changes in the prices of imported goods and services. 
B)  changes in the prices of exported goods and services. 
C)  changes in the production of imported goods and services. 
D)  changes in the production of exported goods and services.

Question 11

Hysteresis occurs when:

Accepted Answer

A)  people get agitated over the level of unemployment. 
B)  people become easier to employ because of a variety of skilled labour available. 
C)  the full-employment rate of unemployment increases as the actual unemployment rate increases. 
D)  unemployment falls quickly after a recession. 
A)  people get agitated over the level of unemployment. 
B)  people become easier to employ because of a variety of skilled labour available. 
C)  the full-employment rate of unemployment increases as the actual unemployment rate increases. 
D)  unemployment falls quickly after a recession.

Question 12

The unemployment rate might be understating unemployment because of:

Accepted Answer

A)  a variable interest rate. 
B)  overexploited workers. 
C)  underemployed workers. 
D)  disinterested workers. 
A)  a variable interest rate. 
B)  overexploited workers. 
C)  underemployed workers. 
D)  disinterested workers.

Question 13

Jan is an engineer working for the roads department in a small town in New South Wales. When the government cut spending, Jan and 99 others were laid off. The only other business in the town is growing grapes to be made into raisins, but the growers refuse to hire laid-off engineers, knowing they will leave at the first opportunity. The unemployment Jan is experiencing is:

Accepted Answer

A)  cyclical. 
B)  structural. 
C)  permanent. 
D)  frictional. 
A)  cyclical. 
B)  structural. 
C)  permanent. 
D)  frictional.

Question 14

The CPI is used to determine:

Accepted Answer

A)  how higher quality products increase the wellbeing of consumers. 
B)  how the cost of living changed from one period to another. 
C)  the changes in prices of all consumer goods and services. 
D)  how changing prices affect the export of goods and services. 
A)  how higher quality products increase the wellbeing of consumers. 
B)  how the cost of living changed from one period to another. 
C)  the changes in prices of all consumer goods and services. 
D)  how changing prices affect the export of goods and services.

Question 15

Which of the following statements is true?

Accepted Answer

A)  The four phases of the business cycle, in order, are: peak, recovery, trough, recession. 
B)  When unemployment is rising then real GDP is rising. 
C)  The economic problem typically associated with a recovery is rising unemployment. 
D)  Full employment exists in an economy when the unemployment rate equals the sum of frictional, seasonal and structural unemployment rates. 
A)  The four phases of the business cycle, in order, are: peak, recovery, trough, recession. 
B)  When unemployment is rising then real GDP is rising. 
C)  The economic problem typically associated with a recovery is rising unemployment. 
D)  Full employment exists in an economy when the unemployment rate equals the sum of frictional, seasonal and structural unemployment rates.

Question 16

Which of the following measures real purchasing power?

Accepted Answer

A)  Real income. 
B)  Nominal income. 
C)  Increase in income. 
D)  Stable income. 
A)  Real income. 
B)  Nominal income. 
C)  Increase in income. 
D)  Stable income.

Question 17

The consumer price index (CPI) compares the prices of:

Accepted Answer

A)  all goods and services in the economy compared to the prices of those goods and services in a base year. 
B)  consumer goods and services that a household purchases to the prices of those goods and services purchased in a base year. 
C)  producer goods and services that are made for consumers to the prices of those goods and services in a base year. 
D)  goods and services that are purchased by producers to the prices of those goods and services in a base year. 
A)  all goods and services in the economy compared to the prices of those goods and services in a base year. 
B)  consumer goods and services that a household purchases to the prices of those goods and services purchased in a base year. 
C)  producer goods and services that are made for consumers to the prices of those goods and services in a base year. 
D)  goods and services that are purchased by producers to the prices of those goods and services in a base year.

Question 18

Workers who may be between jobs are considered:

Accepted Answer

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

Question 19

Real income is the purchasing power of nominal (money) income.

Accepted Answer

A) True 
 B)False

Question 20

The consumer price index is also called:

Accepted Answer

A)  the price of living index. 
B)  the cost of surviving index. 
C)  the cost of living index. 
D)  the price of underemployment. 
A)  the price of living index. 
B)  the cost of surviving index. 
C)  the cost of living index. 
D)  the price of underemployment.

Cyclical unemployment is caused by:

When actual real GDP output is below full-employment real GDP, the GDP measures the cost of cyclical unemployment.

During the 1990s, which of the following countries had the highest unemployment rate?

The civilian labour force is:

Part-time workers who want full-time work are counted as only partially employed in the official unemployment statistics.

Narrbegin Exhibit 13.1 Consumer price index Year Consumer price index 1 100 2 100 3 105 4 125 5 150 -As shown in Exhibit 13.1, the rate of inflation for Year 2 is:

Some economists claim that the natural rate of unemployment has increased over the past 30 years because:

An example of structural unemployment includes:

Demand-pull inflation is due to:

The CPI measures:

Hysteresis occurs when:

The unemployment rate might be understating unemployment because of:

The CPI is used to determine:

Which of the following statements is true?

Which of the following measures real purchasing power?

The consumer price index (CPI) compares the prices of:

Workers who may be between jobs are considered:

Real income is the purchasing power of nominal (money) income.

The consumer price index is also called:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

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Exam 14: Inflation and Unemployment

Cyclical unemployment is caused by:

When actual real GDP output is below full-employment real GDP, the GDP measures the cost of cyclical unemployment.

During the 1990s, which of the following countries had the highest unemployment rate?

The civilian labour force is:

Part-time workers who want full-time work are counted as only partially employed in the official unemployment statistics.

Narrbegin Exhibit 13.1 Consumer price index Year Consumer price index 1 100 2 100 3 105 4 125 5 150 -As shown in Exhibit 13.1, the rate of inflation for Year 2 is:

Some economists claim that the natural rate of unemployment has increased over the past 30 years because:

An example of structural unemployment includes:

Demand-pull inflation is due to:

The CPI measures:

Hysteresis occurs when:

The unemployment rate might be understating unemployment because of:

The CPI is used to determine:

Which of the following statements is true?

Which of the following measures real purchasing power?

The consumer price index (CPI) compares the prices of:

Workers who may be between jobs are considered:

Real income is the purchasing power of nominal (money) income.

The consumer price index is also called:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters