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

What is the definition of a discouraged worker?

The purchasing power of the dollar

To prevent frictional unemployment, we would have to

The CPI tends to overstate the true inflation rate because

When economy-wide business activities are increasing, they are referred to as

During an unanticipated inflation

An increase in inflation will cause a reduction in which of the following?

If the duration of unemployment increases, what happens to the unemployment rate, other things being equal? Why?

When, over a sustained period of time, the growth of aggregate business activity falls below what is considered the normal growth rate, the economy necessarily experiences

Most of the problems caused by inflation are caused by the fact that

The real interest rate is

The price index for any designated base year must always equal

-Refer to the above figure. Point C is known as

The consumer price index (CPI) is a measure of inflation for

Changes in leading indicators signal

The major change in American labor markets this century is

The nominal rate of interest is

The value of money for buying goods and services is known as

You receive a five percent raise in your hourly wage. The inflation rate is four percent. Your purchasing power has

Is it possible for the unemployment rate to rise at the same time that the number of people working increases?