Question 1

Which of the following can cause cost-push inflation if the economy is currently in equilibrium at full-employment GDP?

Accepted Answer

A)  A flood that destroys much of the country's crops. 
B)  An increase in the size of the labour force. 
C)  A decrease in personal income tax rates, which increases after-tax income. 
D)  An increase in the capital stock in the country. 
A)  A flood that destroys much of the country's crops. 
B)  An increase in the size of the labour force. 
C)  A decrease in personal income tax rates, which increases after-tax income. 
D)  An increase in the capital stock in the country.

Question 2

Except for during recessions,the duration of unemployment for the typical person in Australia lasts

Accepted Answer

A)  less than six months. 
B)  over two years. 
C)  between six and nine months. 
D)  over one year. 
A)  less than six months. 
B)  over two years. 
C)  between six and nine months. 
D)  over one year.

Question 3

By offering training to workers whose firms sacked them because of competition from foreign firms,the federal government is attempting to reduce

Accepted Answer

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

Question 4

Unemployment arising from a persistent mismatch between the skills and characteristics of workers and the requirements of jobs is called

Accepted Answer

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

Question 5

The formula for calculating the CPI is

Accepted Answer

A)  (Expenditures in the current year/Expenditures in the base year) × 100. 
B)  (Expenditures in the current year × Expenditures in the base year)/100. 
C)  (Expenditures in the base year/Expenditures in the current year). 
D)  (Expenditures in the base year × 100)/(Expenditures in the current year). 
A)  (Expenditures in the current year/Expenditures in the base year) × 100. 
B)  (Expenditures in the current year × Expenditures in the base year)/100. 
C)  (Expenditures in the base year/Expenditures in the current year). 
D)  (Expenditures in the base year × 100)/(Expenditures in the current year).

Question 6

Which of the following will not lower the official measure of the unemployment rate?

Accepted Answer

A)  Older workers taking early retirement. 
B)  People losing their full-time jobs and being given part-time jobs instead. 
C)  An increase in the number of discouraged workers. 
D)  An economic boom. 
A)  Older workers taking early retirement. 
B)  People losing their full-time jobs and being given part-time jobs instead. 
C)  An increase in the number of discouraged workers. 
D)  An economic boom.

Question 7

The unemployment rate is calculated by

Accepted Answer

A)  dividing the number of unemployed people by the sum of the number of working people plus the number of unemployed people, and multiplying by 100. 
B)  dividing the number of unemployed people by the number of working individuals, and multiplying by 100. 
C)  dividing the number of unemployed people by the number in the working-age population, and multiplying by 100. 
D)  dividing the number of unemployed people by the number of people in the labour force, and dividing by 100. 
A)  dividing the number of unemployed people by the sum of the number of working people plus the number of unemployed people, and multiplying by 100. 
B)  dividing the number of unemployed people by the number of working individuals, and multiplying by 100. 
C)  dividing the number of unemployed people by the number in the working-age population, and multiplying by 100. 
D)  dividing the number of unemployed people by the number of people in the labour force, and dividing by 100.

Question 8

Cost-push inflation can be caused by

Accepted Answer

A)  a high growth rate in real wages. 
B)  an increase in aggregate demand, which pushes prices higher. 
C)  an increase in aggregate supply, which pushes prices higher. 
D)  growth in aggregate demand not keeping up with the growth in aggregate supply. 
A)  a high growth rate in real wages. 
B)  an increase in aggregate demand, which pushes prices higher. 
C)  an increase in aggregate supply, which pushes prices higher. 
D)  growth in aggregate demand not keeping up with the growth in aggregate supply.

Question 9

Which of the following is not true about hyperinflation?

Accepted Answer

A)  During times of hyperinflation, people try to avoid holding cash. 
B)  Economies with hyperinflation are usually in a severe recession. 
C)  Hyperinflation occurs during times of economic boom. 
D)  During times of hyperinflation, the rate of inflation can be millions of per cent per month. 
A)  During times of hyperinflation, people try to avoid holding cash. 
B)  Economies with hyperinflation are usually in a severe recession. 
C)  Hyperinflation occurs during times of economic boom. 
D)  During times of hyperinflation, the rate of inflation can be millions of per cent per month.

Question 10

Describe the three types of unemployment.

Accepted Answer

Cyclical unemployment is caused by a bus

Question 11

Suppose 180 000 people are employed,20 000 people are unemployed,and an additional 50 000 people are not in the labour force but are of working age.Calculate the labour force participation rate.

Accepted Answer

The labour force participation rate is c

Question 12

Suppose an economy has only three goods and the typical family purchases the amounts given in the following table.If 2005 is the base year,then what is the CPI for 2013?

Accepted Answer

A)  180 
B)  208 
C)  40.08 
D)  100 
A)  180 
B)  208 
C)  40.08 
D)  100

Question 13

Why would a firm pay efficiency wages?

Accepted Answer

An efficiency wage is a wage that is hig

Question 14

In 1986,an Apple IIe computer with 65 kilobytes of memory cost around $1500.Today,a $1500 iMac computer (also made by Apple)comes with 4 gigabytes of memory.This illustrates the potential for what kind of bias in CPI calculations?

Accepted Answer

A)  New product bias. 
B)  Increase in quality bias. 
C)  Substitution bias. 
D)  Outlet bias. 
A)  New product bias. 
B)  Increase in quality bias. 
C)  Substitution bias. 
D)  Outlet bias.

Question 15

What is deflation and what effect does deflation have on borrowers of money and on asset values?

Accepted Answer

Deflation is a decline in the general le

Question 16

Describe how a lender can lose from 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 losses?

Accepted Answer

Lenders require compensation for inflati

Question 17

Explain why discouraged workers are not measured as being unemployed.

Accepted Answer

They are not measured as unemp

Question 18

Sarah is a full-time student who is not looking for work.What kind of unemployment is Sarah experiencing?

Accepted Answer

A)  Cyclical 
B)  Structural 
C)  Frictional 
D)  Sarah is not experiencing unemployment of any kind because she is not currently part of the labour force. 
A)  Cyclical 
B)  Structural 
C)  Frictional 
D)  Sarah is not experiencing unemployment of any kind because she is not currently part of the labour force.

Question 19

Minimum wage laws cause unemployment because the legal minimum wage is set

Accepted Answer

A)  below the market wage, causing labour demand to be greater than labour supply. 
B)  below the market wage, causing labour demand to be less than labour supply. 
C)  above the market wage, causing labour demand to be greater than labour supply. 
D)  above the market wage, causing labour demand to be less than labour supply. 
A)  below the market wage, causing labour demand to be greater than labour supply. 
B)  below the market wage, causing labour demand to be less than labour supply. 
C)  above the market wage, causing labour demand to be greater than labour supply. 
D)  above the market wage, causing labour demand to be less than labour supply.

Question 20

If the number employed is 11 million,the working-age population is 16 million,and the number unemployed is 0.6 million,then the unemployment rate is

Accepted Answer

A)  5.45 per cent. 
B)  5.17 per cent. 
C)  3.75 per cent. 
D)  12 per cent. 
A)  5.45 per cent. 
B)  5.17 per cent. 
C)  3.75 per cent. 
D)  12 per cent.

Which of the following can cause cost-push inflation if the economy is currently in equilibrium at full-employment GDP?

Except for during recessions,the duration of unemployment for the typical person in Australia lasts

By offering training to workers whose firms sacked them because of competition from foreign firms,the federal government is attempting to reduce

Unemployment arising from a persistent mismatch between the skills and characteristics of workers and the requirements of jobs is called

The formula for calculating the CPI is

Which of the following will not lower the official measure of the unemployment rate?

The unemployment rate is calculated by

Cost-push inflation can be caused by

Which of the following is not true about hyperinflation?

Describe the three types of unemployment.

Suppose 180 000 people are employed,20 000 people are unemployed,and an additional 50 000 people are not in the labour force but are of working age.Calculate the labour force participation rate.

Suppose an economy has only three goods and the typical family purchases the amounts given in the following table.If 2005 is the base year,then what is the CPI for 2013?

Why would a firm pay efficiency wages?

In 1986,an Apple IIe computer with 65 kilobytes of memory cost around $1500.Today,a $1500 iMac computer (also made by Apple)comes with 4 gigabytes of memory.This illustrates the potential for what kind of bias in CPI calculations?

What is deflation and what effect does deflation have on borrowers of money and on asset values?

Describe how a lender can lose from 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 losses?

Explain why discouraged workers are not measured as being unemployed.

Sarah is a full-time student who is not looking for work.What kind of unemployment is Sarah experiencing?

Minimum wage laws cause unemployment because the legal minimum wage is set

If the number employed is 11 million,the working-age population is 16 million,and the number unemployed is 0.6 million,then the unemployment rate is

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

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Exam 13: Unemployment and Inflation

Which of the following can cause cost-push inflation if the economy is currently in equilibrium at full-employment GDP?

Except for during recessions,the duration of unemployment for the typical person in Australia lasts

By offering training to workers whose firms sacked them because of competition from foreign firms,the federal government is attempting to reduce

Unemployment arising from a persistent mismatch between the skills and characteristics of workers and the requirements of jobs is called

The formula for calculating the CPI is

Which of the following will not lower the official measure of the unemployment rate?

The unemployment rate is calculated by

Cost-push inflation can be caused by

Which of the following is not true about hyperinflation?

Describe the three types of unemployment.

Suppose 180 000 people are employed,20 000 people are unemployed,and an additional 50 000 people are not in the labour force but are of working age.Calculate the labour force participation rate.

Suppose an economy has only three goods and the typical family purchases the amounts given in the following table.If 2005 is the base year,then what is the CPI for 2013?

Why would a firm pay efficiency wages?

In 1986,an Apple IIe computer with 65 kilobytes of memory cost around $1500.Today,a $1500 iMac computer (also made by Apple)comes with 4 gigabytes of memory.This illustrates the potential for what kind of bias in CPI calculations?

What is deflation and what effect does deflation have on borrowers of money and on asset values?

Describe how a lender can lose from 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 losses?

Explain why discouraged workers are not measured as being unemployed.

Sarah is a full-time student who is not looking for work.What kind of unemployment is Sarah experiencing?

Minimum wage laws cause unemployment because the legal minimum wage is set

If the number employed is 11 million,the working-age population is 16 million,and the number unemployed is 0.6 million,then the unemployment rate is

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters