Exam 9: Business Cycles, Unemployment, and Inflation

Unemployment that is the result of deregulation, corporate downsizing, and the closure of military bases is best categorized as frictional unemployment.

You are given the following information about the economy: the nominal interest rate = 8 percent; the real rate of interest = 6 percent. The inflation premium is:

Over a ten-year period, the Consumer Price Index doubled. On the basis of this information and using the rule of 70, we can say that the average annual rate of inflation over this period was approximately:

On the issue of whether or not a little inflation helps reduce unemployment:

The full-employment rate of unemployment is also called the:

The percentage change in real income can be approximated by subtracting the percentage change in the price level from the percentage change in nominal income.

Cross-country studies that bolster the "zero inflation" view indicate that lower rates of inflation are associated with:

Real income will rise from one year to the next if nominal income:

Which measure of inflation would include consumer goods and capital goods?

Cost-push inflation increases real output and employment.

"Full employment" refers to the situation when there is:

When the economy goes into a recession and firms require less labor, managers tend to:

The rate of unemployment tends to be lowest for:

Inflation caused by an increase in aggregate spending is referred to as:

If the GDP gap is positive, then:

A nation has a population of 260 million people. Of these, 60 million are retired, in the military, institutionalized, or under 16 years old. There are 188 million who are employed and 12 million who are unemployed. What is the unemployment rate?

When oil and energy prices rise, the economy tends to experience:

Which statement about inflation is correct?

With mild demand-pull inflation, the economy's output level would tend to be:

The Great Recession that started in 2007 was triggered by shocks in which of the following economic sectors?