Question 1

Suppose buyers expect prices to rise dramatically in the near future. If they decide to purchase items today before the price rise, the possible result can be:

Accepted Answer

A)  cost-push inflation. 
B)  demand-pull inflation. 
C)  deflation. 
D)  diminishing returns. 
A)  cost-push inflation. 
B)  demand-pull inflation. 
C)  deflation. 
D)  diminishing returns.

Question 2

Cost-push inflation is due to:

Accepted Answer

A)  'too much money chasing too few goods'. 
B)  the economy operating at full employment. 
C)  significant increases in production costs. 
D)  a decrease in production costs. 
A)  'too much money chasing too few goods'. 
B)  the economy operating at full employment. 
C)  significant increases in production costs. 
D)  a decrease in production costs.

Question 3

People with fixed incomes fare best in an inflationary period.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is true?

Accepted Answer

A)  Demand-pull inflation is caused by an increase in the cost of production. 
B)  Cost-push inflation is caused by an increase in spending. 
C)  If nominal interest rates remain the same and the inflation rate falls, real interest rates decrease. 
D)  If real interest rates are positive, borrowers incur losses. 
A)  Demand-pull inflation is caused by an increase in the cost of production. 
B)  Cost-push inflation is caused by an increase in spending. 
C)  If nominal interest rates remain the same and the inflation rate falls, real interest rates decrease. 
D)  If real interest rates are positive, borrowers incur losses.

Question 5

A wage-price spiral occurs:

Accepted Answer

A)  when firms need to continually meet higher wage demands because unemployment is close to zero. 
B)  when falling wages lead to rapidly falling prices, causing deflation. 
C)  when higher prices lead to rapidly falling real wages, which prompts demands for higher nominal wages. 
D)  when wages are indexed by law to the CPI. 
A)  when firms need to continually meet higher wage demands because unemployment is close to zero. 
B)  when falling wages lead to rapidly falling prices, causing deflation. 
C)  when higher prices lead to rapidly falling real wages, which prompts demands for higher nominal wages. 
D)  when wages are indexed by law to the CPI.

Question 6

According to the Australian Bureau of Statistics (ABS), any person who claims on an ABS survey that she/he is performing only unpaid household duties is:

Accepted Answer

A)  retired. 
B)  unemployed. 
C)  re-employable. 
D)  not a member of the labour force. 
A)  retired. 
B)  unemployed. 
C)  re-employable. 
D)  not a member of the labour force.

Question 7

The relatively high unemployment in many European countries has been attributed at least in part to:

Accepted Answer

A)  a more flexible labour market. 
B)  higher inflation. 
C)  low wages. 
D)  a rigid labour market. 
A)  a more flexible labour market. 
B)  higher inflation. 
C)  low wages. 
D)  a rigid labour market.

Question 8

Cyclical unemployment can occur:

Accepted Answer

A)  when the demand for certain goods and services depends on the current stage of the business cycle. 
B)  when the demand for certain goods and services depends on the workers' skill levels. 
C)  when the demand for certain goods and services has declined due to the recession. 
D)  when the demand for certain goods and services declines over time. 
A)  when the demand for certain goods and services depends on the current stage of the business cycle. 
B)  when the demand for certain goods and services depends on the workers' skill levels. 
C)  when the demand for certain goods and services has declined due to the recession. 
D)  when the demand for certain goods and services declines over time.

Question 9

Sharon was being treated unfairly by her boss, so she stormed off the job and two days later found another position. For two days, Sharon experienced:

Accepted Answer

A)  cyclical unemployment. 
B)  structural unemployment. 
C)  seasonal unemployment. 
D)  frictional unemployment. 
A)  cyclical unemployment. 
B)  structural unemployment. 
C)  seasonal unemployment. 
D)  frictional unemployment.

Question 10

The economy is fully employed when there is no:

Accepted Answer

A)  seasonal unemployment. 
B)  frictional unemployment. 
C)  structural unemployment. 
D)  cyclical unemployment. 
A)  seasonal unemployment. 
B)  frictional unemployment. 
C)  structural unemployment. 
D)  cyclical unemployment.

Question 11

Full employment, which is always expected to occur, consists of the frictionally and cyclically unemployed.

Accepted Answer

A) True 
 B)False

Question 12

Full employment, which is always expected to occur, consists of the seasonally, frictionally and cyclically unemployed.

Accepted Answer

A) True 
 B)False

Question 13

If the CPI increases and the nominal income remains the same:

Accepted Answer

A)  the nominal income increases. 
B)  the real income increases. 
C)  the real income falls. 
D)  the real income remains the same. 
E)  we cannot say whether any of these apply. 
A)  the nominal income increases. 
B)  the real income increases. 
C)  the real income falls. 
D)  the real income remains the same. 
E)  we cannot say whether any of these apply.

Question 14

An example of frictional unemployment is a/an:

Accepted Answer

A)  textile worker permanently laid off due to jobs lost to imports. 
B)  engineer permanently laid off due to advances in technology. 
C)  fast-food restaurant worker who quits work and attends college. 
D)  computer programmer who leaves one job and accepts a new job. 
A)  textile worker permanently laid off due to jobs lost to imports. 
B)  engineer permanently laid off due to advances in technology. 
C)  fast-food restaurant worker who quits work and attends college. 
D)  computer programmer who leaves one job and accepts a new job.

Question 15

Demand-pull inflation is not influenced by the expectations of buyers and sellers.

Accepted Answer

A) True 
 B)False

Question 16

Unemployment statistics in Australia generally show that:

Accepted Answer

A)  all age groups have roughly the same unemployment rate. 
B)  women have a higher rate of unemployment than men. 
C)  those aged 55 and over have a disproportionately large unemployment rate. 
D)  those aged 15-19 have the highest rate of unemployment of any demographic group. 
A)  all age groups have roughly the same unemployment rate. 
B)  women have a higher rate of unemployment than men. 
C)  those aged 55 and over have a disproportionately large unemployment rate. 
D)  those aged 15-19 have the highest rate of unemployment of any demographic group.

Suppose buyers expect prices to rise dramatically in the near future. If they decide to purchase items today before the price rise, the possible result can be:

Cost-push inflation is due to:

People with fixed incomes fare best in an inflationary period.

Which of the following statements is true?

A wage-price spiral occurs:

According to the Australian Bureau of Statistics (ABS), any person who claims on an ABS survey that she/he is performing only unpaid household duties is:

The relatively high unemployment in many European countries has been attributed at least in part to:

Cyclical unemployment can occur:

Sharon was being treated unfairly by her boss, so she stormed off the job and two days later found another position. For two days, Sharon experienced:

The economy is fully employed when there is no:

Full employment, which is always expected to occur, consists of the frictionally and cyclically unemployed.

Full employment, which is always expected to occur, consists of the seasonally, frictionally and cyclically unemployed.

If the CPI increases and the nominal income remains the same:

An example of frictional unemployment is a/an:

Demand-pull inflation is not influenced by the expectations of buyers and sellers.

Unemployment statistics in Australia generally show that:

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

Suppose buyers expect prices to rise dramatically in the near future. If they decide to purchase items today before the price rise, the possible result can be:

Cost-push inflation is due to:

People with fixed incomes fare best in an inflationary period.

Which of the following statements is true?

A wage-price spiral occurs:

According to the Australian Bureau of Statistics (ABS), any person who claims on an ABS survey that she/he is performing only unpaid household duties is:

The relatively high unemployment in many European countries has been attributed at least in part to:

Cyclical unemployment can occur:

Sharon was being treated unfairly by her boss, so she stormed off the job and two days later found another position. For two days, Sharon experienced:

The economy is fully employed when there is no:

Full employment, which is always expected to occur, consists of the frictionally and cyclically unemployed.

Full employment, which is always expected to occur, consists of the seasonally, frictionally and cyclically unemployed.

If the CPI increases and the nominal income remains the same:

An example of frictional unemployment is a/an:

Demand-pull inflation is not influenced by the expectations of buyers and sellers.

Unemployment statistics in Australia generally show that:

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