Question 1

An increase in the labor force participation rate

Accepted Answer

A)  implies that the unemployment rate must fall. 
B)  implies that the unemployment rate must rise. 
C)  means there are more discouraged workers. 
D)  is consistent with either a rise or a fall in the unemployment rate. 
A)  implies that the unemployment rate must fall. 
B)  implies that the unemployment rate must rise. 
C)  means there are more discouraged workers. 
D)  is consistent with either a rise or a fall in the unemployment rate.

Question 2

The level of unemployment that is equal to the frictional and structural rate in the long run is sometimes referred to as

Accepted Answer

A)  cyclical employment. 
B)  the natural rate of unemployment. 
C)  the total rate of unemployment. 
D)  the zero unemployment rate. 
A)  cyclical employment. 
B)  the natural rate of unemployment. 
C)  the total rate of unemployment. 
D)  the zero unemployment rate.

Question 3

A job leaver is an individual

Accepted Answer

A)  in the labor force whose employment was involuntarily terminated. 
B)  who used to work full time but left the labor force and has now reentered it looking for a job. 
C)  in the labor force who quits voluntarily. 
D)  who has never held a full-time job lasting two weeks or longer but is now seeking employment. 
A)  in the labor force whose employment was involuntarily terminated. 
B)  who used to work full time but left the labor force and has now reentered it looking for a job. 
C)  in the labor force who quits voluntarily. 
D)  who has never held a full-time job lasting two weeks or longer but is now seeking employment.

Question 4

Which one of the following would benefit financially from unanticipated inflation?

Accepted Answer

A)  a borrower whose loan has a fixed nominal interest rate 
B)  a borrower with an adjustable rate mortgage 
C)  a bank that has made loans at a fixed nominal interest rate 
D)  a firm whose workers are covered by a COLA agreement 
A)  a borrower whose loan has a fixed nominal interest rate 
B)  a borrower with an adjustable rate mortgage 
C)  a bank that has made loans at a fixed nominal interest rate 
D)  a firm whose workers are covered by a COLA agreement

Question 5

Which federal agency publishes the United States' unemployment figures?

Accepted Answer

A)  Health and Human Services 
B)  The Bureau of Labor Statistics 
C)  the Federal Reserve 
D)  the Senate Committee on Labor Relations 
A)  Health and Human Services 
B)  The Bureau of Labor Statistics 
C)  the Federal Reserve 
D)  the Senate Committee on Labor Relations

Question 6

How much should a bank charge for a loan, if the anticipated inflation rate is 3 percent, and the bank wants to earn 3 percent on this $1,000,000 loan?

Accepted Answer

A)  $30,000 
B)  $10,000 
C)  6 percent 
D)  0 percent 
A)  $30,000 
B)  $10,000 
C)  6 percent 
D)  0 percent

Question 7

The National Bureau of Economic Research is

Accepted Answer

A)  funded by Congress and evaluates the budget appropriations. 
B)  funded by the Federal Reserve Banks and analyzes the banking system. 
C)  a nonprofit organization and evaluates the business cycles. 
D)  a nonprofit organization and evaluates the U.S. monetary policy. 
A)  funded by Congress and evaluates the budget appropriations. 
B)  funded by the Federal Reserve Banks and analyzes the banking system. 
C)  a nonprofit organization and evaluates the business cycles. 
D)  a nonprofit organization and evaluates the U.S. monetary policy.

Question 8

How has the pattern of fluctuations in overall U.S. business activity changed since World War II?

Accepted Answer

A)  It has become less volatile. 
B)  Expansions have been eliminated. 
C)  Contractions have been eliminated. 
D)  Recessions have been eliminated. 
A)  It has become less volatile. 
B)  Expansions have been eliminated. 
C)  Contractions have been eliminated. 
D)  Recessions have been eliminated.

Question 9

Which of the following groups would NOT be considered as part of the civilian labor force?

Accepted Answer

A)  full-time students who are not working or looking for work 
B)  those already employed 
C)  those who are unemployed 
D)  all individuals only working part-time 
A)  full-time students who are not working or looking for work 
B)  those already employed 
C)  those who are unemployed 
D)  all individuals only working part-time

Question 10

Tiffany just graduated from college, is unemployed, and looking for her first real job. This is an example of

Accepted Answer

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

Question 11

The market basket cost $300 in 2015, while it cost $250 in the base year. Therefore, the price index for 2015 is

Accepted Answer

A)  83. 
B)  120. 
C)  80. 
D)  cannot be calculated because the inflation rate is not given. 
A)  83. 
B)  120. 
C)  80. 
D)  cannot be calculated because the inflation rate is not given.

Question 12

What are the costs to society of inflation? Who is harmed by inflation and who benefits?

Accepted Answer

The resources used by people to protect

Question 13

A price index is the

Accepted Answer

A)  cost of a market basket of goods today. 
B)  cost of a market basket of goods and services a year ago expressed as a percentage of the cost of the same market basket today. 
C)  cost of a market basket of goods and services today expressed as a percentage of the cost of the same market basket during a base year. 
D)  year that is chosen as the point of reference for comparison of prices in other years. 
A)  cost of a market basket of goods today. 
B)  cost of a market basket of goods and services a year ago expressed as a percentage of the cost of the same market basket today. 
C)  cost of a market basket of goods and services today expressed as a percentage of the cost of the same market basket during a base year. 
D)  year that is chosen as the point of reference for comparison of prices in other years.

Question 14

According to your text, during the 2000s, the inflation rate was in which range of percentages?

Accepted Answer

A)  0-5% 
B)  5-10% 
C)  10-15% 
D)  15-20% 
A)  0-5% 
B)  5-10% 
C)  10-15% 
D)  15-20%

Question 15

Contractions are characterized by

Accepted Answer

A)  increases in the rate of growth of economic activity. 
B)  an upward movement toward a peak in economic activity. 
C)  a downward movement toward a trough in economic activity. 
D)  a long period in which no cycles are observed in economic activity. 
A)  increases in the rate of growth of economic activity. 
B)  an upward movement toward a peak in economic activity. 
C)  a downward movement toward a trough in economic activity. 
D)  a long period in which no cycles are observed in economic activity.

Question 16

-Refer to the above figure. A recession is best described as

Accepted Answer

A)  the upward linear line. 
B)  the period between Point B and Point C. 
C)  the period between Point A and Point B. 
D)  none of the above. 
A)  the upward linear line. 
B)  the period between Point B and Point C. 
C)  the period between Point A and Point B. 
D)  none of the above.

Question 17

If the duration of unemployment in a country increases from 16 weeks to 18 weeks, then

Accepted Answer

A)  the unemployment rate will decrease. 
B)  the unemployment rate will increase. 
C)  the size of the labor force will increase. 
D)  the size of the labor force will decrease. 
A)  the unemployment rate will decrease. 
B)  the unemployment rate will increase. 
C)  the size of the labor force will increase. 
D)  the size of the labor force will decrease.

Question 18

Last year the price of a dozen eggs was $1, and this year the price is $1.30. Which of the following does NOT express this price change accurately?

Accepted Answer

A)  The price increased 30 percent. 
B)  The price increased by 30 cents. 
C)  If last year was the base year, the index number for this year would be 130. 
D)  If this year is the base year, the index number for last year would be 130. 
A)  The price increased 30 percent. 
B)  The price increased by 30 cents. 
C)  If last year was the base year, the index number for this year would be 130. 
D)  If this year is the base year, the index number for last year would be 130.

Question 19

The population is 1,000 million, the labor force is 700 million, and the number of unemployed is 35 million. What is the unemployment rate?

Accepted Answer

A)  7 percent 
B)  5 percent 
C)  10 percent 
D)  3.5 percent 
A)  7 percent 
B)  5 percent 
C)  10 percent 
D)  3.5 percent

Question 20

Describe the major types of unemployment.

Accepted Answer

Frictional unemployment is the continuou

Exam 7: The Macroeconomy: Unemployment, Inflation, and Deflation

An increase in the labor force participation rate

The level of unemployment that is equal to the frictional and structural rate in the long run is sometimes referred to as

A job leaver is an individual

Which one of the following would benefit financially from unanticipated inflation?

Which federal agency publishes the United States' unemployment figures?

How much should a bank charge for a loan, if the anticipated inflation rate is 3 percent, and the bank wants to earn 3 percent on this $1,000,000 loan?

The National Bureau of Economic Research is

How has the pattern of fluctuations in overall U.S. business activity changed since World War II?

Which of the following groups would NOT be considered as part of the civilian labor force?

Tiffany just graduated from college, is unemployed, and looking for her first real job. This is an example of

The market basket cost $300 in 2015, while it cost $250 in the base year. Therefore, the price index for 2015 is

What are the costs to society of inflation? Who is harmed by inflation and who benefits?

A price index is the

According to your text, during the 2000s, the inflation rate was in which range of percentages?

Contractions are characterized by

-Refer to the above figure. A recession is best described as

If the duration of unemployment in a country increases from 16 weeks to 18 weeks, then

Last year the price of a dozen eggs was $1, and this year the price is $1.30. Which of the following does NOT express this price change accurately?

The population is 1,000 million, the labor force is 700 million, and the number of unemployed is 35 million. What is the unemployment rate?

Describe the major types of unemployment.

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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