Question 1

If the rate of unemployment is 10% and the labor force is 130 million, the number of unemployed workers is:

Accepted Answer

A) 1.3 million. 
B) 13 million. 
C) 10 million. 
D) 8 million. 
A) 1.3 million. 
B) 13 million. 
C) 10 million. 
D) 8 million.

Question 2

Structural changes in an economy and changes in consumer tastes are reasons for:

Accepted Answer

A) job creation and job destruction. 
B) job searches. 
C) unemployment during recessions. 
D) unemployment during expansions. 
A) job creation and job destruction. 
B) job searches. 
C) unemployment during recessions. 
D) unemployment during expansions.

Question 3

The costs that arise from the way inflation makes money a less reliable unit of measurement are:

Accepted Answer

A) shoe-leather costs. 
B) menu costs. 
C) unit-of-account costs. 
D) medium of exchange costs. 
A) shoe-leather costs. 
B) menu costs. 
C) unit-of-account costs. 
D) medium of exchange costs.

Question 4

If the U.S. dollar were replaced with a "new dollar" at an exchange rate of 1 new dollar for 4 old dollars, then an hourly wage of $12 would become an hourly wage of 3 new dollars.

Accepted Answer

A) True 
 B)False

Question 5

Frictional unemployment is considered to be:

Accepted Answer

A) bad, because people are not getting a paycheck. 
B) good, because people learn how other folks live. 
C) good, since that means people may be seeking jobs that match their job skills. 
D) bad, because people are out of work. 
A) bad, because people are not getting a paycheck. 
B) good, because people learn how other folks live. 
C) good, since that means people may be seeking jobs that match their job skills. 
D) bad, because people are out of work.

Question 6

A jobless recovery occurs when GDP is decreasing and unemployment is rising.

Accepted Answer

A) True 
 B)False

Question 7

Suppose banks are issuing personal loans at 9%. If expected inflation is 3%, then the nominal interest rate is _____ and the real interest rate is _____.

Accepted Answer

A) 6%; 9% 
B) 9%; 6% 
C) 9%; 3% 
D) 6%; 12% 
A) 6%; 9% 
B) 9%; 6% 
C) 9%; 3% 
D) 6%; 12%

Question 8

Sally works 20 hours a week for an accounting firm. She would like to work full-time and expects that she will in the future. Sally is a(n) _____ worker.

Accepted Answer

A) discouraged 
B) unemployed 
C) underemployed 
D) full-time 
A) discouraged 
B) unemployed 
C) underemployed 
D) full-time

Question 9

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 menu costs.

Accepted Answer

A) True 
 B)False

Question 10

Kelli is a server at a casual restaurant in a small town. In each of the following situations, explain Kelli's type of unemployment.
a. The local economy is in a minor recession and the restaurant lays Kelli off. The owner assures her that she will be rehired when business picks up again.
b. A large factory, the major employer in the town, permanently closes, and this hurts all restaurants in town. The restaurant fires Kelli because the owner can only afford to stay open on the weekends.
c. Kelli is dissatisfied with her schedule at the restaurant and quits her job. She is qualified to work at other restaurants and immediately begins to send her résumé to restaurants all over town.

Accepted Answer

a. This is cyclical unemployment, due to

Question 11

Menu costs of inflation are the:

Accepted Answer

A) costs associated with money not being a reliable unit of measurement. 
B) costs of transactions associated with avoiding the inflation tax. 
C) costs associated with businesses changing prices. 
D) revenue the government gets from printing money. 
A) costs associated with money not being a reliable unit of measurement. 
B) costs of transactions associated with avoiding the inflation tax. 
C) costs associated with businesses changing prices. 
D) revenue the government gets from printing money.

Question 12

If Jenny's income is $120,000 and the price level is 4, then Jenny's real income is $30,000.

Accepted Answer

A) True 
 B)False

Question 13

Use the following to answer questions :  
-(Table: Employment Data) Look at the table Employment Data. The unemployment rate is:

Accepted Answer

A) 6.25%. 
B) 6.45%. 
C) 9.09%. 
D) 9.37%. 
A) 6.25%. 
B) 6.45%. 
C) 9.09%. 
D) 9.37%.

Question 14

A person who has no job but is looking for one is:

Accepted Answer

A) unemployed. 
B) a discouraged worker. 
C) part of the labor force. 
D) unemployed and part of the labor force. 
A) unemployed. 
B) a discouraged worker. 
C) part of the labor force. 
D) unemployed and part of the labor force.

Question 15

Deflation is:

Accepted Answer

A) a decrease in unemployment. 
B) a decreasing aggregate price level. 
C) a decline in wages. 
D) a recession. 
A) a decrease in unemployment. 
B) a decreasing aggregate price level. 
C) a decline in wages. 
D) a recession.

Question 16

Both binding minimum wages and union wages may cause structural unemployment.

Accepted Answer

A) True 
 B)False

Question 17

Use the following to answer questions :  
-(Table: Employment Data) Look at the table Employment Data. The labor force is:

Accepted Answer

A) 33 million. 
B) 32 million. 
C) 31 million. 
D) 22 million. 
A) 33 million. 
B) 32 million. 
C) 31 million. 
D) 22 million.

Question 18

Explain the difference between shoe-leather costs and menu costs of inflation.

Accepted Answer

Shoe-leather costs occur when consumers

Question 19

You are a college student and not working or looking for work. You are:

Accepted Answer

A) unemployed. 
B) in the labor force but not employed. 
C) not part of the labor force. 
D) counted in the labor force as underemployed. 
A) unemployed. 
B) in the labor force but not employed. 
C) not part of the labor force. 
D) counted in the labor force as underemployed.

Question 20

Donna was laid off at the beginning of 2011. She looked for a job for three months but could not find anything suitable. She then decided to volunteer for a soup kitchen and stopped looking for a job. Donna is considered to be:

Accepted Answer

A) unemployed. 
B) underemployed. 
C) a discouraged worker. 
D) a part-time worker. 
A) unemployed. 
B) underemployed. 
C) a discouraged worker. 
D) a part-time worker.

If the rate of unemployment is 10% and the labor force is 130 million, the number of unemployed workers is:

Structural changes in an economy and changes in consumer tastes are reasons for:

The costs that arise from the way inflation makes money a less reliable unit of measurement are:

If the U.S. dollar were replaced with a "new dollar" at an exchange rate of 1 new dollar for 4 old dollars, then an hourly wage of $12 would become an hourly wage of 3 new dollars.

Frictional unemployment is considered to be:

A jobless recovery occurs when GDP is decreasing and unemployment is rising.

Suppose banks are issuing personal loans at 9%. If expected inflation is 3%, then the nominal interest rate is _ and the real interest rate is _.

Sally works 20 hours a week for an accounting firm. She would like to work full-time and expects that she will in the future. Sally is a(n) _____ worker.

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 menu costs.

Menu costs of inflation are the:

If Jenny's income is $120,000 and the price level is 4, then Jenny's real income is $30,000.

Use the following to answer questions : -(Table: Employment Data) Look at the table Employment Data. The unemployment rate is:

A person who has no job but is looking for one is:

Deflation is:

Both binding minimum wages and union wages may cause structural unemployment.

Use the following to answer questions : -(Table: Employment Data) Look at the table Employment Data. The labor force is:

Explain the difference between shoe-leather costs and menu costs of inflation.

You are a college student and not working or looking for work. You are:

Donna was laid off at the beginning of 2011. She looked for a job for three months but could not find anything suitable. She then decided to volunteer for a soup kitchen and stopped looking for a job. Donna is considered to be:

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 rate of unemployment is 10% and the labor force is 130 million, the number of unemployed workers is:

Structural changes in an economy and changes in consumer tastes are reasons for:

The costs that arise from the way inflation makes money a less reliable unit of measurement are:

If the U.S. dollar were replaced with a "new dollar" at an exchange rate of 1 new dollar for 4 old dollars, then an hourly wage of $12 would become an hourly wage of 3 new dollars.

Frictional unemployment is considered to be:

A jobless recovery occurs when GDP is decreasing and unemployment is rising.

Suppose banks are issuing personal loans at 9%. If expected inflation is 3%, then the nominal interest rate is _____ and the real interest rate is _____.

Sally works 20 hours a week for an accounting firm. She would like to work full-time and expects that she will in the future. Sally is a(n) _____ worker.

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 menu costs.

Menu costs of inflation are the:

If Jenny's income is $120,000 and the price level is 4, then Jenny's real income is $30,000.

Use the following to answer questions : -(Table: Employment Data) Look at the table Employment Data. The unemployment rate is:

A person who has no job but is looking for one is:

Deflation is:

Both binding minimum wages and union wages may cause structural unemployment.

Use the following to answer questions : -(Table: Employment Data) Look at the table Employment Data. The labor force is:

Explain the difference between shoe-leather costs and menu costs of inflation.

You are a college student and not working or looking for work. You are:

Donna was laid off at the beginning of 2011. She looked for a job for three months but could not find anything suitable. She then decided to volunteer for a soup kitchen and stopped looking for a job. Donna is considered to be:

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

Suppose banks are issuing personal loans at 9%. If expected inflation is 3%, then the nominal interest rate is _ and the real interest rate is _.