Question 1

A decline in business activity is called

Accepted Answer

A)  a recession. 
B)  a trough. 
C)  an expansion. 
D)  a peak. 
A)  a recession. 
B)  a trough. 
C)  an expansion. 
D)  a peak.

Question 2

The total civilian labor force is comprised of

Accepted Answer

A)  the unemployed and the employed. 
B)  only the employed. 
C)  all individuals over 16 years of age, whether or not they work or are seeking work. 
D)  only full-time employed individuals between the ages of 18 and 55. 
A)  the unemployed and the employed. 
B)  only the employed. 
C)  all individuals over 16 years of age, whether or not they work or are seeking work. 
D)  only full-time employed individuals between the ages of 18 and 55.

Question 3

What are the four criteria used by the Bureau of Labor Statistics to determine whether an individual is unemployed or not?

Accepted Answer

First are job losers, who became unemplo

Question 4

By definition, the purchasing power of money always drops when

Accepted Answer

A)  inflation occurs. 
B)  deflation occurs. 
C)  the economy is experiencing full employment. 
D)  there is a presidential election year. 
A)  inflation occurs. 
B)  deflation occurs. 
C)  the economy is experiencing full employment. 
D)  there is a presidential election year.

Question 5

The unemployment rate reported by the Bureau of Labor Statistics includes all of the following type of unemployment with the exception of

Accepted Answer

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

Question 6

When the unanticipated inflation rate is zero

Accepted Answer

A)  creditors gain at the expense of debtors. 
B)  debtors gain at the expense of creditors. 
C)  neither creditors not debtors gain or lose. 
D)  both creditors and debtors lose at the expense of the government. 
A)  creditors gain at the expense of debtors. 
B)  debtors gain at the expense of creditors. 
C)  neither creditors not debtors gain or lose. 
D)  both creditors and debtors lose at the expense of the government.

Question 7

If an outdoor vendor loses her job when winter weather comes, this individual is

Accepted Answer

A)  seasonally unemployed. 
B)  cyclically unemployed. 
C)  structurally unemployed. 
D)  chronically unemployed. 
A)  seasonally unemployed. 
B)  cyclically unemployed. 
C)  structurally unemployed. 
D)  chronically unemployed.

Question 8

If Tim works at home taking care of the household

Accepted Answer

A)  he is part of the labor force. 
B)  he is not part of the labor force. 
C)  he is considered to be employed. 
D)  he is considered to be unemployed. 
A)  he is part of the labor force. 
B)  he is not part of the labor force. 
C)  he is considered to be employed. 
D)  he is considered to be unemployed.

Question 9

Frictional unemployment always exists because

Accepted Answer

A)  some workers quit their jobs without having another job already lined up. 
B)  the government has never instituted full employment policies. 
C)  workers are lazy and refuse to accept certain jobs. 
D)  recessions are necessary sometimes to keep the economy healthy. 
A)  some workers quit their jobs without having another job already lined up. 
B)  the government has never instituted full employment policies. 
C)  workers are lazy and refuse to accept certain jobs. 
D)  recessions are necessary sometimes to keep the economy healthy.

Question 10

Frictional unemployment is

Accepted Answer

A)  related to job search difficulties for potential workers. 
B)  a result of a poor match of worker's abilities and skills with current requirements of employers. 
C)  a result of business recessions that occur when aggregate demand is insufficient to create full employment. 
D)  a result of the seasonal pattern of work in specific industries. 
A)  related to job search difficulties for potential workers. 
B)  a result of a poor match of worker's abilities and skills with current requirements of employers. 
C)  a result of business recessions that occur when aggregate demand is insufficient to create full employment. 
D)  a result of the seasonal pattern of work in specific industries.

Question 11

According to business activity charts for the last 100 years, the point of the highest business activity in the United States occurred

Accepted Answer

A)  during the 1920s bull market boom. 
B)  during World War II. 
C)  during the Vietnam War. 
D)  during the Clinton administration. 
A)  during the 1920s bull market boom. 
B)  during World War II. 
C)  during the Vietnam War. 
D)  during the Clinton administration.

Question 12

Fred recently lost his job as a teller at the bank. The bank explained that they were replacing Frank and others with ATM machines. Fred falls into a category of unemployment known as

Accepted Answer

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

Question 13

The purchasing power of money increases when

Accepted Answer

A)  the inflation rate increases. 
B)  there is inflation. 
C)  there is deflation. 
D)  there are more dollars in the economy. 
A)  the inflation rate increases. 
B)  there is inflation. 
C)  there is deflation. 
D)  there are more dollars in the economy.

Question 14

Unemployment is a

Accepted Answer

A)  flow concept. 
B)  stock concept. 
C)  both a flow and a stock concept. 
D)  neither a stock nor a flow concept. 
A)  flow concept. 
B)  stock concept. 
C)  both a flow and a stock concept. 
D)  neither a stock nor a flow concept.

Question 15

Debtors gain and creditors lose when

Accepted Answer

A)  the anticipated rate of inflation is greater than the actual rate of inflation. 
B)  the anticipated rate of inflation is less than the actual rate of inflation. 
C)  the anticipated rate of inflation is the same as the unanticipated rate of inflation. 
D)  the unanticipated rate of inflation is zero. 
A)  the anticipated rate of inflation is greater than the actual rate of inflation. 
B)  the anticipated rate of inflation is less than the actual rate of inflation. 
C)  the anticipated rate of inflation is the same as the unanticipated rate of inflation. 
D)  the unanticipated rate of inflation is zero.

Question 16

A recession causes a decrease in the demand for housing, resulting in substantial layoffs in the construction industry. This is an example of

Accepted Answer

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

Question 17

Examples of external shocks are all of the following EXCEPT

Accepted Answer

A)  war. 
B)  drought. 
C)  oil shock. 
D)  U. S. federal tax policies. 
A)  war. 
B)  drought. 
C)  oil shock. 
D)  U. S. federal tax policies.

Question 18

Fully anticipated inflation occurs when

Accepted Answer

A)  the actual inflation rate equals the anticipated inflation rate. 
B)  the actual inflation rate is less than the anticipated inflation rate. 
C)  the inflation rate is zero. 
D)  the anticipated inflation rate and the unanticipated inflation rate are equal. 
A)  the actual inflation rate equals the anticipated inflation rate. 
B)  the actual inflation rate is less than the anticipated inflation rate. 
C)  the inflation rate is zero. 
D)  the anticipated inflation rate and the unanticipated inflation rate are equal.

Question 19

The definition of a job loser is an individual

Accepted Answer

A)  who quits his job voluntarily. 
B)  whose employment was terminated involuntarily due to a downturn in the economy. 
C)  who competed for a promotion at his company and did not get it. 
D)  who is underemployed. 
A)  who quits his job voluntarily. 
B)  whose employment was terminated involuntarily due to a downturn in the economy. 
C)  who competed for a promotion at his company and did not get it. 
D)  who is underemployed.

Question 20

When Joe, who is among the highest-paid workers in a field in which there are numerous job openings across the nation, recently became unemployed, his opportunity cost of job search is

Accepted Answer

A)  average, so the length of his period of unemployment is likely to be long. 
B)  relatively high, so the length of his period of unemployment is likely to be short. 
C)  relatively low, so the length of his period of unemployment is likely to be long. 
D)  relatively high, so the length of his period of unemployment is likely to be long. 
A)  average, so the length of his period of unemployment is likely to be long. 
B)  relatively high, so the length of his period of unemployment is likely to be short. 
C)  relatively low, so the length of his period of unemployment is likely to be long. 
D)  relatively high, so the length of his period of unemployment is likely to be long.

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

A decline in business activity is called

The total civilian labor force is comprised of

What are the four criteria used by the Bureau of Labor Statistics to determine whether an individual is unemployed or not?

By definition, the purchasing power of money always drops when

The unemployment rate reported by the Bureau of Labor Statistics includes all of the following type of unemployment with the exception of

When the unanticipated inflation rate is zero

If an outdoor vendor loses her job when winter weather comes, this individual is

If Tim works at home taking care of the household

Frictional unemployment always exists because

Frictional unemployment is

According to business activity charts for the last 100 years, the point of the highest business activity in the United States occurred

Fred recently lost his job as a teller at the bank. The bank explained that they were replacing Frank and others with ATM machines. Fred falls into a category of unemployment known as

The purchasing power of money increases when

Unemployment is a

Debtors gain and creditors lose when

A recession causes a decrease in the demand for housing, resulting in substantial layoffs in the construction industry. This is an example of

Examples of external shocks are all of the following EXCEPT

Fully anticipated inflation occurs when

The definition of a job loser is an individual

When Joe, who is among the highest-paid workers in a field in which there are numerous job openings across the nation, recently became unemployed, his opportunity cost of job search is

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

Filters