Question 1

When the actual rate of unemployment is equal to the natural rate of unemployment, we conclude that there is no cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 2

To be classified as unemployed, a worker must:

Accepted Answer

A) be working less than full-time (40 hours a week). 
B) not have a job and must be actively looking for work. 
C) not be looking for a job and must not have a job. 
D) be a discouraged worker. 
A) be working less than full-time (40 hours a week). 
B) not have a job and must be actively looking for work. 
C) not be looking for a job and must not have a job. 
D) be a discouraged worker.

Question 3

Analysts believe that generous unemployment benefits in Europe are associated with:

Accepted Answer

A) low unemployment rates in Europe. 
B) high unemployment rates in Europe. 
C) weak labor unions in Europe. 
D) relatively constant levels of unemployment in Europe. 
A) low unemployment rates in Europe. 
B) high unemployment rates in Europe. 
C) weak labor unions in Europe. 
D) relatively constant levels of unemployment in Europe.

Question 4

During rapid price inflation, firms must frequently change prices. The cost of changing listed prices is known as the _____ cost.

Accepted Answer

A) menu 
B) real interest rate 
C) shoe-leather 
D) unit-of-account 
A) menu 
B) real interest rate 
C) shoe-leather 
D) unit-of-account

Question 5

If the government increases the length and amount of unemployment benefits, the unemployment rate will fall.

Accepted Answer

A) True 
 B)False

Question 6

During a recession:

Accepted Answer

A) unemployment and the growth rate of real GDP both decrease. 
B) unemployment decreases and the growth rate of real GDP increases. 
C) unemployment increases and the growth rate of real GDP decreases. 
D) there is no relation between unemployment and the growth rate of real GDP. 
A) unemployment and the growth rate of real GDP both decrease. 
B) unemployment decreases and the growth rate of real GDP increases. 
C) unemployment increases and the growth rate of real GDP decreases. 
D) there is no relation between unemployment and the growth rate of real GDP.

Question 7

The natural rate of unemployment:

Accepted Answer

A) is composed of frictional, structural, and cyclical unemployment. 
B) is equal to zero. 
C) is always greater than the actual unemployment rate. 
D) is composed of structural and frictional unemployment. 
A) is composed of frictional, structural, and cyclical unemployment. 
B) is equal to zero. 
C) is always greater than the actual unemployment rate. 
D) is composed of structural and frictional unemployment.

Question 8

In 2002, France replaced its national currency, the franc, with the:

Accepted Answer

A) euro. 
B) U.S. dollar. 
C) British pound. 
D) Chinese yuan. 
A) euro. 
B) U.S. dollar. 
C) British pound. 
D) Chinese yuan.

Question 9

Use the following to answer questions :
Scenario: Employment in Xenia
Xenia has 10,000 people. Of this population, 1,000 residents are below age 16, and 2,000 have given up looking for work. Currently, 500 people are unemployed but are actively looking for work; 2,500 work part-time, and the rest are fully employed.
-(Scenario: Employment in Xenia) Look at the scenario Employment in Xenia. What is the unemployment rate?

Accepted Answer

A) 7.14% 
B) 4.25% 
C) 11.11% 
D) 2% 
A) 7.14% 
B) 4.25% 
C) 11.11% 
D) 2%

Question 10

When hyperinflation forces Pedro to change the price stickers on the books in his bookstore very frequently to keep up with the aggregate price level, economists say that Pedro has a:

Accepted Answer

A) shoe-leather cost. 
B) menu cost. 
C) unit-of-account cost. 
D) debt deflation. 
A) shoe-leather cost. 
B) menu cost. 
C) unit-of-account cost. 
D) debt deflation.

Question 11

Unemployment rates are usually highest for:

Accepted Answer

A) white teenagers. 
B) African American teenagers. 
C) male workers aged 25 to 54. 
D) female workers aged 25 to 54. 
A) white teenagers. 
B) African American teenagers. 
C) male workers aged 25 to 54. 
D) female workers aged 25 to 54.

Question 12

Unanticipated inflation:

Accepted Answer

A) increases the value of money. 
B) decreases uncertainty about the future. 
C) reduces the real value of debt. 
D) helps lenders. 
A) increases the value of money. 
B) decreases uncertainty about the future. 
C) reduces the real value of debt. 
D) helps lenders.

Question 13

If the price level at the end of year 1 is 150 and the price level at the end of year 2 is 160, the inflation rate in year 2 is 6.67%.

Accepted Answer

A) True 
 B)False

Question 14

Cyclical unemployment:

Accepted Answer

A) occurs when people are between jobs. 
B) is a lack of good matches between available jobs and skills. 
C) is the normal unemployment around which the actual unemployment rate fluctuates. 
D) is the deviation from the natural rate in the actual rate of unemployment. 
A) occurs when people are between jobs. 
B) is a lack of good matches between available jobs and skills. 
C) is the normal unemployment around which the actual unemployment rate fluctuates. 
D) is the deviation from the natural rate in the actual rate of unemployment.

Question 15

Suppose that the nominal rate of interest is 7% and the inflation rate is 3%. The real rate of interest is:

Accepted Answer

A) 3%. 
B) 4%. 
C) 10%. 
D) 7%. 
A) 3%. 
B) 4%. 
C) 10%. 
D) 7%.

Question 16

Use the following to answer questions:
Scenario: The Employment Rate
A group of 10 people includes 3 retirees, 2 part-time workers, 2 discouraged workers, 1 unemployed worker, and 2 full-time workers.
-(Scenario: The Employment Rate) Look at the scenario The Employment Rate. The unemployment rate is:

Accepted Answer

A) 10%. 
B) 30%. 
C) 20%. 
D) 50%. 
A) 10%. 
B) 30%. 
C) 20%. 
D) 50%.

Question 17

Use the following to answer questions:
Scenario: The Employment Rate
A group of 10 people includes 3 retirees, 2 part-time workers, 2 discouraged workers, 1 unemployed worker, and 2 full-time workers.
-(Scenario: The Employment Rate) Look at the scenario The Employment Rate. If the discouraged workers in this group became active job searchers, the:

Accepted Answer

A) unemployment rate would fall. 
B) unemployment rate and the labor force participation rate would rise. 
C) labor force participation rate would fall. 
D) unemployment rate and the labor force participation rates would both fall. 
A) unemployment rate would fall. 
B) unemployment rate and the labor force participation rate would rise. 
C) labor force participation rate would fall. 
D) unemployment rate and the labor force participation rates would both fall.

Question 18

A binding minimum wage results in:

Accepted Answer

A) higher wages for those who were working prior to the minimum wage implementation. 
B) an increase in structural unemployment. 
C) a decrease in the amount of cyclical unemployment. 
D) lower actual unemployment rates, since higher wages encourage more people to enter the labor force. 
A) higher wages for those who were working prior to the minimum wage implementation. 
B) an increase in structural unemployment. 
C) a decrease in the amount of cyclical unemployment. 
D) lower actual unemployment rates, since higher wages encourage more people to enter the labor force.

Question 19

All of the following are examples of job search EXCEPT:

Accepted Answer

A) attending class at a community college to learn database management. 
B) reading the employment section of the local newspaper while sitting at a coffee shop. 
C) calling a former college roommate to see if there are any job openings in her company. 
D) visiting a former college professor to learn about work as a research assistant. 
A) attending class at a community college to learn database management. 
B) reading the employment section of the local newspaper while sitting at a coffee shop. 
C) calling a former college roommate to see if there are any job openings in her company. 
D) visiting a former college professor to learn about work as a research assistant.

Question 20

Cyclical unemployment is the result of:

Accepted Answer

A) normal job turnover (job searches). 
B) discrimination. 
C) the business cycle. 
D) the minimum wage. 
A) normal job turnover (job searches). 
B) discrimination. 
C) the business cycle. 
D) the minimum wage.

When the actual rate of unemployment is equal to the natural rate of unemployment, we conclude that there is no cyclical unemployment.

To be classified as unemployed, a worker must:

Analysts believe that generous unemployment benefits in Europe are associated with:

During rapid price inflation, firms must frequently change prices. The cost of changing listed prices is known as the _____ cost.

If the government increases the length and amount of unemployment benefits, the unemployment rate will fall.

During a recession:

The natural rate of unemployment:

In 2002, France replaced its national currency, the franc, with the:

When hyperinflation forces Pedro to change the price stickers on the books in his bookstore very frequently to keep up with the aggregate price level, economists say that Pedro has a:

Unemployment rates are usually highest for:

Unanticipated inflation:

If the price level at the end of year 1 is 150 and the price level at the end of year 2 is 160, the inflation rate in year 2 is 6.67%.

Cyclical unemployment:

Suppose that the nominal rate of interest is 7% and the inflation rate is 3%. The real rate of interest is:

A binding minimum wage results in:

All of the following are examples of job search EXCEPT:

Cyclical unemployment is the result of:

First Principles

Economic Models

Supply and Demand

International Trade 5

Macroeconomics: the Big Picture

Gdp and Cpi: Tracking the Macroeconomy

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters

Exam 8: Unemployment and Inflation

When the actual rate of unemployment is equal to the natural rate of unemployment, we conclude that there is no cyclical unemployment.

To be classified as unemployed, a worker must:

Analysts believe that generous unemployment benefits in Europe are associated with:

During rapid price inflation, firms must frequently change prices. The cost of changing listed prices is known as the _____ cost.

If the government increases the length and amount of unemployment benefits, the unemployment rate will fall.

During a recession:

The natural rate of unemployment:

In 2002, France replaced its national currency, the franc, with the:

When hyperinflation forces Pedro to change the price stickers on the books in his bookstore very frequently to keep up with the aggregate price level, economists say that Pedro has a:

Unemployment rates are usually highest for:

Unanticipated inflation:

If the price level at the end of year 1 is 150 and the price level at the end of year 2 is 160, the inflation rate in year 2 is 6.67%.

Cyclical unemployment:

Suppose that the nominal rate of interest is 7% and the inflation rate is 3%. The real rate of interest is:

A binding minimum wage results in:

All of the following are examples of job search EXCEPT:

Cyclical unemployment is the result of:

First Principles

Economic Models

Supply and Demand

International Trade 5

Macroeconomics: the Big Picture

Gdp and Cpi: Tracking the Macroeconomy

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters