Question 1

As the average age of the labor force increased from the end of the 1970s to the end of the 1990s, the natural rate of unemployment:

Accepted Answer

A) increased. 
B) decreased. 
C) was unaffected. 
D) was unpredictable. 
A) increased. 
B) decreased. 
C) was unaffected. 
D) was unpredictable.

Question 2

Use the following to answer questions:  
-(Table: Population Data for Estill County) Look at the table Population Data for Estill County. What is the labor force participation rate?

Accepted Answer

A) 64% 
B) 81% 
C) 17% 
D) 79% 
A) 64% 
B) 81% 
C) 17% 
D) 79%

Question 3

It is generally accepted that a binding minimum wage does all of the following EXCEPT:

Accepted Answer

A) decrease the quantity of labor demanded. 
B) increase unemployment. 
C) increase the amount of labor supplied. 
D) decrease the amount of labor supplied. 
A) decrease the quantity of labor demanded. 
B) increase unemployment. 
C) increase the amount of labor supplied. 
D) decrease the amount of labor supplied.

Question 4

One factor that raises the natural rate of unemployment is:

Accepted Answer

A) a population boom that increases the number of young workers joining the labor force. 
B) the loss of labor union membership across industries. 
C) the loss of retirement funds, so that more people in the baby boom generation continue to work past the typical retirement age. 
D) the use of new technology in the workplace that increases labor productivity. 
A) a population boom that increases the number of young workers joining the labor force. 
B) the loss of labor union membership across industries. 
C) the loss of retirement funds, so that more people in the baby boom generation continue to work past the typical retirement age. 
D) the use of new technology in the workplace that increases labor productivity.

Question 5

When the unemployment rate is very low, most of it tends to be:

Accepted Answer

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

Question 6

Last week Stephanie quit her job as a copywriter at an advertising agency. She has spent the past few days browsing the help wanted ads but hasn't found anything that matches her skills. Stephanie is best classified as:

Accepted Answer

A) structurally unemployed. 
B) frictionally unemployed. 
C) a discouraged worker. 
D) out of the labor force. 
A) structurally unemployed. 
B) frictionally unemployed. 
C) a discouraged worker. 
D) out of the labor force.

Question 7

Unit-of-account costs arise from the way inflation makes money a less reliable measure of value.

Accepted Answer

A) True 
 B)False

Question 8

If the population of the United States is 260 million, the labor force is 130 million, and 120 million workers are employed, the rate of unemployment is:

Accepted Answer

A) 7.7%. 
B) 8.3%. 
C) 50%. 
D) 92%. 
A) 7.7%. 
B) 8.3%. 
C) 50%. 
D) 92%.

Question 9

Since 1960 the price level in the United States has decreased in most years.

Accepted Answer

A) True 
 B)False

Question 10

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 10%.

Accepted Answer

A) True 
 B)False

Question 11

If the nominal interest rate is 4% and the inflation rate is 1%, then the real interest rate is 5%.

Accepted Answer

A) True 
 B)False

Question 12

Suppose there are 70 million people in the labor force, of whom 60 million are employed. The unemployment rate is:

Accepted Answer

A) 7%. 
B) 10%. 
C) 14.28%. 
D) 4.2%. 
A) 7%. 
B) 10%. 
C) 14.28%. 
D) 4.2%.

Question 13

Firms pay an efficiency wage because:

Accepted Answer

A) it reduces the risk of losing the best workers. 
B) it is required by law. 
C) they don't have to offer health insurance if they pay efficiency wages. 
D) it reduces the employee's income tax liability. 
A) it reduces the risk of losing the best workers. 
B) it is required by law. 
C) they don't have to offer health insurance if they pay efficiency wages. 
D) it reduces the employee's income tax liability.

Question 14

Use the following to answer questions :
Figure: The Minimum Wage  
-(Figure: The Minimum Wage) Look at the figure The Minimum Wage. Which of the following is a binding minimum wage?

Accepted Answer

A) P1. 
B) P2. 
C) P3. 
D) zero. 
A) P1. 
B) P2. 
C) P3. 
D) zero.

Question 15

Which of the following statements is FALSE?

Accepted Answer

A) Unemployment always rises during recessions. 
B) Unemployment always falls during expansions. 
C) There is a strong negative relation between growth in real GDP and changes in unemployment. 
D) In general, there is a trade-off between inflation and unemployment in the short run. 
A) Unemployment always rises during recessions. 
B) Unemployment always falls during expansions. 
C) There is a strong negative relation between growth in real GDP and changes in unemployment. 
D) In general, there is a trade-off between inflation and unemployment in the short run.

Question 16

The U.S. inflation rate was lower in the 2000s than it was in the 1970s.

Accepted Answer

A) True 
 B)False

Question 17

If 99 million people are working and 1 million are unemployed but actively seeking work, then the unemployment rate is:

Accepted Answer

A) 1%. 
B) 5%. 
C) 10%. 
D) 100%. 
A) 1%. 
B) 5%. 
C) 10%. 
D) 100%.

Question 18

During times of high inflation people hold less cash and make more withdrawals, so banks often open new branches.

Accepted Answer

A) True 
 B)False

Question 19

When the unemployment rate is high, there is political demand to increase the benefit period for unemployment compensation. In a standard analysis, this will lead to:

Accepted Answer

A) reductions in unemployment. 
B) increases in the unemployment rate. 
C) more job creation. 
D) more job destruction. 
A) reductions in unemployment. 
B) increases in the unemployment rate. 
C) more job creation. 
D) more job destruction.

Question 20

Minimum wages and efficiency wages are both above the equilibrium market wage. Briefly describe each type of wage. Do they have similar results in the labor market?

Accepted Answer

The minimum wage is set by the governmen

As the average age of the labor force increased from the end of the 1970s to the end of the 1990s, the natural rate of unemployment:

Use the following to answer questions: -(Table: Population Data for Estill County) Look at the table Population Data for Estill County. What is the labor force participation rate?

It is generally accepted that a binding minimum wage does all of the following EXCEPT:

One factor that raises the natural rate of unemployment is:

When the unemployment rate is very low, most of it tends to be:

Last week Stephanie quit her job as a copywriter at an advertising agency. She has spent the past few days browsing the help wanted ads but hasn't found anything that matches her skills. Stephanie is best classified as:

Unit-of-account costs arise from the way inflation makes money a less reliable measure of value.

If the population of the United States is 260 million, the labor force is 130 million, and 120 million workers are employed, the rate of unemployment is:

Since 1960 the price level in the United States has decreased in most years.

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 10%.

If the nominal interest rate is 4% and the inflation rate is 1%, then the real interest rate is 5%.

Suppose there are 70 million people in the labor force, of whom 60 million are employed. The unemployment rate is:

Firms pay an efficiency wage because:

Use the following to answer questions : Figure: The Minimum Wage -(Figure: The Minimum Wage) Look at the figure The Minimum Wage. Which of the following is a binding minimum wage?

Which of the following statements is FALSE?

The U.S. inflation rate was lower in the 2000s than it was in the 1970s.

If 99 million people are working and 1 million are unemployed but actively seeking work, then the unemployment rate is:

During times of high inflation people hold less cash and make more withdrawals, so banks often open new branches.

When the unemployment rate is high, there is political demand to increase the benefit period for unemployment compensation. In a standard analysis, this will lead to:

Minimum wages and efficiency wages are both above the equilibrium market wage. Briefly describe each type of wage. Do they have similar results in the labor market?

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

As the average age of the labor force increased from the end of the 1970s to the end of the 1990s, the natural rate of unemployment:

Use the following to answer questions: -(Table: Population Data for Estill County) Look at the table Population Data for Estill County. What is the labor force participation rate?

It is generally accepted that a binding minimum wage does all of the following EXCEPT:

One factor that raises the natural rate of unemployment is:

When the unemployment rate is very low, most of it tends to be:

Last week Stephanie quit her job as a copywriter at an advertising agency. She has spent the past few days browsing the help wanted ads but hasn't found anything that matches her skills. Stephanie is best classified as:

Unit-of-account costs arise from the way inflation makes money a less reliable measure of value.

If the population of the United States is 260 million, the labor force is 130 million, and 120 million workers are employed, the rate of unemployment is:

Since 1960 the price level in the United States has decreased in most years.

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 10%.

If the nominal interest rate is 4% and the inflation rate is 1%, then the real interest rate is 5%.

Suppose there are 70 million people in the labor force, of whom 60 million are employed. The unemployment rate is:

Firms pay an efficiency wage because:

Use the following to answer questions : Figure: The Minimum Wage -(Figure: The Minimum Wage) Look at the figure The Minimum Wage. Which of the following is a binding minimum wage?

Which of the following statements is FALSE?

The U.S. inflation rate was lower in the 2000s than it was in the 1970s.

If 99 million people are working and 1 million are unemployed but actively seeking work, then the unemployment rate is:

During times of high inflation people hold less cash and make more withdrawals, so banks often open new branches.

When the unemployment rate is high, there is political demand to increase the benefit period for unemployment compensation. In a standard analysis, this will lead to:

Minimum wages and efficiency wages are both above the equilibrium market wage. Briefly describe each type of wage. Do they have similar results in the labor market?

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