Question 1

Generous unemployment benefits are likely to cause:

Accepted Answer

A) an increase in the employment level. 
B) a reduction in job search time. 
C) a decrease in the unemployment rate. 
D) an increase in the unemployment rate. 
A) an increase in the employment level. 
B) a reduction in job search time. 
C) a decrease in the unemployment rate. 
D) an increase in the unemployment rate.

Question 2

Which of the following situations is likely to lead to an increase in discouraged workers?

Accepted Answer

A) The economy is expanding. 
B) The availability of jobs falls. 
C) The economy is undergoing inflation. 
D) The economy is undergoing deflation. 
A) The economy is expanding. 
B) The availability of jobs falls. 
C) The economy is undergoing inflation. 
D) The economy is undergoing deflation.

Question 3

If the labor force becomes younger, the natural rate of unemployment will fall.

Accepted Answer

A) True 
 B)False

Question 4

If the labor force totals 100 million workers and 90 million are working, then the unemployment rate is:

Accepted Answer

A) 1%. 
B) 5%. 
C) 10%. 
D) 90%. 
A) 1%. 
B) 5%. 
C) 10%. 
D) 90%.

Question 5

Last month Brent lost his job at the auto parts factory because the factory relocated to Asia. Brent has been looking for similar jobs in his town but has found no openings. Brent 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 6

In periods of unexpected inflation:

Accepted Answer

A) borrowers benefit, since they repay their loans in dollars with lower real value. 
B) lenders benefit, since they are repaid in dollars with a higher real value. 
C) neither borrowers nor lenders are affected by the inflation rate, since their nominal interest rate stays the same. 
D) lenders benefit, since the nominal interest rate does not change. 
A) borrowers benefit, since they repay their loans in dollars with lower real value. 
B) lenders benefit, since they are repaid in dollars with a higher real value. 
C) neither borrowers nor lenders are affected by the inflation rate, since their nominal interest rate stays the same. 
D) lenders benefit, since the nominal interest rate does not change.

Question 7

During Brazil's hyperinflation of the 1990s the economy lost real resources when the transportation sector grew very large to cope with the consequences of the high rate of inflation.

Accepted Answer

A) True 
 B)False

Question 8

Use the following to answer questions :
Figure: The Minimum Wage  
-(Figure: The Minimum Wage) Look at the figure The Minimum Wage. By how much does the quantity of labor demanded fall when the government imposes a binding minimum wage of P3?

Accepted Answer

A) Q4 - Q1 
B) Q3 - Q2 
C) Q2 - Q1 
D) Q4 - Q2 
A) Q4 - Q1 
B) Q3 - Q2 
C) Q2 - Q1 
D) Q4 - Q2

Question 9

The _____ interest rate _____.

Accepted Answer

A) nominal; can be negative 
B) real; cannot be negative 
C) real; can only be positive 
D) real; can be zero, positive, or negative 
A) nominal; can be negative 
B) real; cannot be negative 
C) real; can only be positive 
D) real; can be zero, positive, or negative

Question 10

The inflation rate for the current year is the price level in the current year minus the price level in the previous year.

Accepted Answer

A) True 
 B)False

Question 11

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its unemployment rate is:

Accepted Answer

A) 4%. 
B) 7.5%. 
C) 10%. 
D) 67.5%. 
A) 4%. 
B) 7.5%. 
C) 10%. 
D) 67.5%.

Question 12

Since the 1950s, the natural unemployment rate in the United States has:

Accepted Answer

A) remained relatively constant. 
B) increased steadily. 
C) decreased steadily. 
D) risen and fallen. 
A) remained relatively constant. 
B) increased steadily. 
C) decreased steadily. 
D) risen and fallen.

Question 13

When policies drop the inflation rate from 10% to 5%, the economy is undergoing disinflation.

Accepted Answer

A) True 
 B)False

Question 14

Shoe-leather costs are the:

Accepted Answer

A) effect of inflation on the prices of food, clothes, and other necessities. 
B) increased cost of transactions due to inflation. 
C) high price of leather goods. 
D) effect of inflation on transportation costs. 
A) effect of inflation on the prices of food, clothes, and other necessities. 
B) increased cost of transactions due to inflation. 
C) high price of leather goods. 
D) effect of inflation on transportation costs.

Question 15

If the price level increases, real wages will:

Accepted Answer

A) increase. 
B) decrease. 
C) remain constant. 
D) fluctuate randomly. 
A) increase. 
B) decrease. 
C) remain constant. 
D) fluctuate randomly.

Question 16

Use the following to answer questions :
Figure: The Minimum Wage  
-(Figure: The Minimum Wage) Look at the figure The Minimum Wage. What is the quantity of labor supplied at a binding minimum wage of P3?

Accepted Answer

A) Q1 
B) Q2 
C) Q3 
D) Q4 
A) Q1 
B) Q2 
C) Q3 
D) Q4

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is a LIKELY response to inflation?

Accepted Answer

A) People choose to carry higher money balances. 
B) People tend to make fewer transactions. 
C) People tend to make more transactions. 
D) People tend to hold on to fewer interest-bearing assets. 
A) People choose to carry higher money balances. 
B) People tend to make fewer transactions. 
C) People tend to make more transactions. 
D) People tend to hold on to fewer interest-bearing assets.

Question 19

A drop in the inflation rate is called:

Accepted Answer

A) disinflation. 
B) deflation. 
C) stagflation. 
D) hyperinflation. 
A) disinflation. 
B) deflation. 
C) stagflation. 
D) hyperinflation.

Question 20

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

Accepted Answer

A) 64% 
B) 48% 
C) 17% 
D) 6% 
A) 64% 
B) 48% 
C) 17% 
D) 6%

Generous unemployment benefits are likely to cause:

Which of the following situations is likely to lead to an increase in discouraged workers?

If the labor force becomes younger, the natural rate of unemployment will fall.

If the labor force totals 100 million workers and 90 million are working, then the unemployment rate is:

Last month Brent lost his job at the auto parts factory because the factory relocated to Asia. Brent has been looking for similar jobs in his town but has found no openings. Brent is best classified as:

In periods of unexpected inflation:

During Brazil's hyperinflation of the 1990s the economy lost real resources when the transportation sector grew very large to cope with the consequences of the high rate of inflation.

Use the following to answer questions : Figure: The Minimum Wage -(Figure: The Minimum Wage) Look at the figure The Minimum Wage. By how much does the quantity of labor demanded fall when the government imposes a binding minimum wage of P₃?

The _ interest rate _.

The inflation rate for the current year is the price level in the current year minus the price level in the previous year.

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its unemployment rate is:

Since the 1950s, the natural unemployment rate in the United States has:

When policies drop the inflation rate from 10% to 5%, the economy is undergoing disinflation.

Shoe-leather costs are the:

If the price level increases, real wages will:

Use the following to answer questions : Figure: The Minimum Wage -(Figure: The Minimum Wage) Look at the figure The Minimum Wage. What is the quantity of labor supplied at a binding minimum wage of P₃?

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

Which of the following is a LIKELY response to inflation?

A drop in the inflation rate is called:

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

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

Generous unemployment benefits are likely to cause:

Which of the following situations is likely to lead to an increase in discouraged workers?

If the labor force becomes younger, the natural rate of unemployment will fall.

If the labor force totals 100 million workers and 90 million are working, then the unemployment rate is:

Last month Brent lost his job at the auto parts factory because the factory relocated to Asia. Brent has been looking for similar jobs in his town but has found no openings. Brent is best classified as:

In periods of unexpected inflation:

During Brazil's hyperinflation of the 1990s the economy lost real resources when the transportation sector grew very large to cope with the consequences of the high rate of inflation.

Use the following to answer questions : Figure: The Minimum Wage -(Figure: The Minimum Wage) Look at the figure The Minimum Wage. By how much does the quantity of labor demanded fall when the government imposes a binding minimum wage of P3?

The _____ interest rate _____.

The inflation rate for the current year is the price level in the current year minus the price level in the previous year.

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its unemployment rate is:

Since the 1950s, the natural unemployment rate in the United States has:

When policies drop the inflation rate from 10% to 5%, the economy is undergoing disinflation.

Shoe-leather costs are the:

If the price level increases, real wages will:

Use the following to answer questions : Figure: The Minimum Wage -(Figure: The Minimum Wage) Look at the figure The Minimum Wage. What is the quantity of labor supplied at a binding minimum wage of P3?

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

Which of the following is a LIKELY response to inflation?

A drop in the inflation rate is called:

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

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

Use the following to answer questions : Figure: The Minimum Wage -(Figure: The Minimum Wage) Look at the figure The Minimum Wage. By how much does the quantity of labor demanded fall when the government imposes a binding minimum wage of P₃?

The _ interest rate _.

Use the following to answer questions : Figure: The Minimum Wage -(Figure: The Minimum Wage) Look at the figure The Minimum Wage. What is the quantity of labor supplied at a binding minimum wage of P₃?