Question 1

If the growth rate of GDP is above its historical average, then there is a tendency for the unemployment rate to:

Accepted Answer

A) fall to zero. 
B) rise. 
C) fall. 
D) stabilize. 
A) fall to zero. 
B) rise. 
C) fall. 
D) stabilize.

Question 2

When the demand for labor is falling and employers have committed to high wages, _____ unemployment will result.

Accepted Answer

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

Question 3

A binding minimum wage in a labor market is set _____ the equilibrium wage and causes a _____ of labor.

Accepted Answer

A) below; surplus 
B) below; shortage 
C) above; surplus 
D) above; shortage 
A) below; surplus 
B) below; shortage 
C) above; surplus 
D) above; shortage

Question 4

Since 2007 unemployment rates have been higher than average for recent college graduates because they are less qualified than graduates of the 1990s.

Accepted Answer

A) True 
 B)False

Question 5

Use the following to answer questions :
Table: Unemployment and Employment Data  
-(Table: Unemployment and Employment Data) Look at the table Unemployment and Employment Data. If marginally attached workers are included, the labor force in this economy is:

Accepted Answer

A) 170 million. 
B) 103 million. 
C) 100 million. 
D) 98 million. 
A) 170 million. 
B) 103 million. 
C) 100 million. 
D) 98 million.

Question 6

Suppose the real interest rate is 2.1% and the nominal interest rate is 5.4%. The inflation rate is:

Accepted Answer

A) 7.5%. 
B) 3.3%. 
C) -3.3%. 
D) 2.1%. 
A) 7.5%. 
B) 3.3%. 
C) -3.3%. 
D) 2.1%.

Question 7

All of the following are costs of inflation EXCEPT _____ costs.

Accepted Answer

A) menu 
B) shoe-leather 
C) unit-of-account 
D) efficiency wage 
A) menu 
B) shoe-leather 
C) unit-of-account 
D) efficiency wage

Question 8

Discouraged workers are not working, want to work, but are not actively looking for a job.

Accepted Answer

A) True 
 B)False

Question 9

The percentage of the labor force that is unemployed is the:

Accepted Answer

A) labor force participation rate. 
B) employment ratio. 
C) unemployment rate. 
D) natural employment rate. 
A) labor force participation rate. 
B) employment ratio. 
C) unemployment rate. 
D) natural employment rate.

Question 10

Structural unemployment:

Accepted Answer

A) results when there are more job hunters than jobs. 
B) affects those entering the labor force for the first time. 
C) is zero when the economy is in full employment. 
D) is caused by short-run economic fluctuations. 
A) results when there are more job hunters than jobs. 
B) affects those entering the labor force for the first time. 
C) is zero when the economy is in full employment. 
D) is caused by short-run economic fluctuations.

Question 11

The natural rate of unemployment will rise for all of the following reasons EXCEPT:

Accepted Answer

A) more generous terms for unemployment compensation. 
B) an increase in union membership. 
C) an increase in labor productivity that translates into greater demand for labor. 
D) a surge in the number of young and inexperienced workers. 
A) more generous terms for unemployment compensation. 
B) an increase in union membership. 
C) an increase in labor productivity that translates into greater demand for labor. 
D) a surge in the number of young and inexperienced workers.

Question 12

An increase in the number of discouraged workers in the economy tends to:

Accepted Answer

A) raise the official unemployment rate. 
B) lower the official unemployment rate. 
C) lower the number of people who are frictionally unemployed. 
D) increase the number of people who are structurally unemployed. 
A) raise the official unemployment rate. 
B) lower the official unemployment rate. 
C) lower the number of people who are frictionally unemployed. 
D) increase the number of people who are structurally unemployed.

Question 13

According to the Congressional Budget Office, the natural rate of unemployment:

Accepted Answer

A) has continually declined since 1950. 
B) was at its lowest by the end of the 1970s. 
C) has continually risen since 1950. 
D) rose until the end of the 1970s and has declined since then. 
A) has continually declined since 1950. 
B) was at its lowest by the end of the 1970s. 
C) has continually risen since 1950. 
D) rose until the end of the 1970s and has declined since then.

Question 14

Efficiency wages are usually set by employers to:

Accepted Answer

A) reduce unemployment. 
B) increase employment. 
C) provide an incentive for better performance. 
D) increase employment and provide better incentives for performance. 
A) reduce unemployment. 
B) increase employment. 
C) provide an incentive for better performance. 
D) increase employment and provide better incentives for performance.

Question 15

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 labor force participation rate is:

Accepted Answer

A) 30%. 
B) 50%. 
C) 70%. 
D) 80%. 
A) 30%. 
B) 50%. 
C) 70%. 
D) 80%.

Question 16

Anticipated inflation affects:

Accepted Answer

A) borrowers only. 
B) lenders only. 
C) all aspects of the economy. 
D) only business firms involved in investment spending. 
A) borrowers only. 
B) lenders only. 
C) all aspects of the economy. 
D) only business firms involved in investment spending.

Question 17

People who are counted as unemployed by the Bureau of Labor Statistics are:

Accepted Answer

A) people without a job who are actively seeking a job. 
B) discouraged workers. 
C) workers who are underemployed. 
D) people without a job who are actively seeking a job, discouraged workers, and workers who are underemployed. 
A) people without a job who are actively seeking a job. 
B) discouraged workers. 
C) workers who are underemployed. 
D) people without a job who are actively seeking a job, discouraged workers, and workers who are underemployed.

Question 18

When disinflation occurs:

Accepted Answer

A) the natural rate of unemployment rises. 
B) and inflationary expectations do not change, an economy may have a recession. 
C) and inflationary expectations do not change, unemployment rates will fall. 
D) with inflationary expectations unchanging, aggregate output will rise. 
A) the natural rate of unemployment rises. 
B) and inflationary expectations do not change, an economy may have a recession. 
C) and inflationary expectations do not change, unemployment rates will fall. 
D) with inflationary expectations unchanging, aggregate output will rise.

Question 19

Inflation reduces nominal interest rates.

Accepted Answer

A) True 
 B)False

Question 20

During periods of high inflation, stores that publish catalogs find it necessary to revise prices and publish new catalogs more frequently than before. This is an example of _____ costs.

Accepted Answer

A) unit-of-account 
B) menu 
C) shoe-leather 
D) redistributive 
A) unit-of-account 
B) menu 
C) shoe-leather 
D) redistributive

If the growth rate of GDP is above its historical average, then there is a tendency for the unemployment rate to:

When the demand for labor is falling and employers have committed to high wages, _____ unemployment will result.

A binding minimum wage in a labor market is set _ the equilibrium wage and causes a _ of labor.

Since 2007 unemployment rates have been higher than average for recent college graduates because they are less qualified than graduates of the 1990s.

Use the following to answer questions : Table: Unemployment and Employment Data -(Table: Unemployment and Employment Data) Look at the table Unemployment and Employment Data. If marginally attached workers are included, the labor force in this economy is:

Suppose the real interest rate is 2.1% and the nominal interest rate is 5.4%. The inflation rate is:

All of the following are costs of inflation EXCEPT _____ costs.

Discouraged workers are not working, want to work, but are not actively looking for a job.

The percentage of the labor force that is unemployed is the:

Structural unemployment:

The natural rate of unemployment will rise for all of the following reasons EXCEPT:

An increase in the number of discouraged workers in the economy tends to:

According to the Congressional Budget Office, the natural rate of unemployment:

Efficiency wages are usually set by employers to:

Anticipated inflation affects:

People who are counted as unemployed by the Bureau of Labor Statistics are:

When disinflation occurs:

Inflation reduces nominal interest rates.

During periods of high inflation, stores that publish catalogs find it necessary to revise prices and publish new catalogs more frequently than before. This is an example of _____ costs.

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

If the growth rate of GDP is above its historical average, then there is a tendency for the unemployment rate to:

When the demand for labor is falling and employers have committed to high wages, _____ unemployment will result.

A binding minimum wage in a labor market is set _____ the equilibrium wage and causes a _____ of labor.

Since 2007 unemployment rates have been higher than average for recent college graduates because they are less qualified than graduates of the 1990s.

Use the following to answer questions : Table: Unemployment and Employment Data -(Table: Unemployment and Employment Data) Look at the table Unemployment and Employment Data. If marginally attached workers are included, the labor force in this economy is:

Suppose the real interest rate is 2.1% and the nominal interest rate is 5.4%. The inflation rate is:

All of the following are costs of inflation EXCEPT _____ costs.

Discouraged workers are not working, want to work, but are not actively looking for a job.

The percentage of the labor force that is unemployed is the:

Structural unemployment:

The natural rate of unemployment will rise for all of the following reasons EXCEPT:

An increase in the number of discouraged workers in the economy tends to:

According to the Congressional Budget Office, the natural rate of unemployment:

Efficiency wages are usually set by employers to:

Anticipated inflation affects:

People who are counted as unemployed by the Bureau of Labor Statistics are:

When disinflation occurs:

Inflation reduces nominal interest rates.

During periods of high inflation, stores that publish catalogs find it necessary to revise prices and publish new catalogs more frequently than before. This is an example of _____ costs.

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

A binding minimum wage in a labor market is set _ the equilibrium wage and causes a _ of labor.