Question 1

When an individual is frictionally unemployed, the unemployment arises from

Accepted Answer

A)  a short-term elimination of jobs because of a slowdown in business activity. 
B)  imperfect labor market information which requires individuals to search for appropriate employment. 
C)  the permanent elimination of jobs because of a change in the structure of the economy. 
D)  a reduction in the overall demand for labor's skills. 
A)  a short-term elimination of jobs because of a slowdown in business activity. 
B)  imperfect labor market information which requires individuals to search for appropriate employment. 
C)  the permanent elimination of jobs because of a change in the structure of the economy. 
D)  a reduction in the overall demand for labor's skills.

Question 2

A lifeguard who is out of work in the winter is

Accepted Answer

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

Question 3

All of the following are signals of a recession EXCEPT

Accepted Answer

A)  a cyclical reduction in employment of labor. 
B)  a slight reduction in a currently high rate of growth in economic activity. 
C)  increasing unemployment. 
D)  a falling level of economic activity. 
A)  a cyclical reduction in employment of labor. 
B)  a slight reduction in a currently high rate of growth in economic activity. 
C)  increasing unemployment. 
D)  a falling level of economic activity.

Question 4

A reentrant 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 5

Inflation can be defined as

Accepted Answer

A)  an increase in the purchasing power of money. 
B)  a decrease in the purchasing power of money. 
C)  no change in the purchasing power of money. 
D)  an increase in real income. 
A)  an increase in the purchasing power of money. 
B)  a decrease in the purchasing power of money. 
C)  no change in the purchasing power of money. 
D)  an increase in real income.

Question 6

-Refer to the above table. You are given information on Collin's consumption for 2007 and 2017. Using 2007 as the base year compute the price index for 2017. The index equals

Accepted Answer

A)  0.75. 
B)  73.007. 
C)  87.50. 
D)  136.842. 
A)  0.75. 
B)  73.007. 
C)  87.50. 
D)  136.842.

Question 7

A business fluctuation when the pace of economic activity is slowing down is called

Accepted Answer

A)  a reduction. 
B)  a contraction. 
C)  a depression. 
D)  a slowdown. 
A)  a reduction. 
B)  a contraction. 
C)  a depression. 
D)  a slowdown.

Question 8

Who stands to gain as a result of unanticipated inflation?

Accepted Answer

A)  creditors 
B)  debtors 
C)  persons living on a fixed income 
D)  retired individuals 
A)  creditors 
B)  debtors 
C)  persons living on a fixed income 
D)  retired individuals

Question 9

Distinguishing between stock measures and flow measures, the flow measures are

Accepted Answer

A)  the labor force only. 
B)  the number of people who lost their jobs and the number of people who found jobs only. 
C)  the total number of people who are unemployed only. 
D)  the total number in the labor force and the total number of people who are unemployed only. 
A)  the labor force only. 
B)  the number of people who lost their jobs and the number of people who found jobs only. 
C)  the total number of people who are unemployed only. 
D)  the total number in the labor force and the total number of people who are unemployed only.

Question 10

Which of the following is NOT a measure of the general level of prices?

Accepted Answer

A)  Consumer Price Index 
B)  Producer Price Index 
C)  GDP Deflator 
D)  Personal Sales Deflator Index 
A)  Consumer Price Index 
B)  Producer Price Index 
C)  GDP Deflator 
D)  Personal Sales Deflator Index

Question 11

Throughout U.S. history, inflation has been highest

Accepted Answer

A)  right after a recession. 
B)  right before a recession. 
C)  during periods of war. 
D)  during Republican administrations. 
A)  right after a recession. 
B)  right before a recession. 
C)  during periods of war. 
D)  during Republican administrations.

Question 12

Which of the following people would be considered unemployed by the Bureau of Labor Statistics? I. Mrs. X works 20 hours a week but wishes to work 40 hours a week.
II) Mr. Y is laid off from his job as a welder, but expects to be rehired in 8 months.

Accepted Answer

A)  I only 
B)  II only 
C)  Both I and II 
D)  Neither I nor II 
A)  I only 
B)  II only 
C)  Both I and II 
D)  Neither I nor II

Question 13

Inflation is best described as a situation in which

Accepted Answer

A)  relative prices are changing. 
B)  some prices are rising faster than others. 
C)  relative prices are changing, but the purchasing power of the dollar is unchanged. 
D)  the average of all prices are on a sustained rise over a period of time. 
A)  relative prices are changing. 
B)  some prices are rising faster than others. 
C)  relative prices are changing, but the purchasing power of the dollar is unchanged. 
D)  the average of all prices are on a sustained rise over a period of time.

Question 14

Which of the following people would be considered unemployed assuming that they are actively seeking employment?

Accepted Answer

A)  those who were fired from their job 
B)  those who resigned from their job 
C)  new entrants into the job market 
D)  All of the above are correct. 
A)  those who were fired from their job 
B)  those who resigned from their job 
C)  new entrants into the job market 
D)  All of the above are correct.

Question 15

The real rate of interest can be defined as the

Accepted Answer

A)  nominal interest rate less the anticipated rate of inflation. 
B)  anticipated rate of inflation less the nominal interest rate. 
C)  the market rate of interest expressed in today's dollars. 
D)  nominal rate of interest less the unanticipated rate of inflation. 
A)  nominal interest rate less the anticipated rate of inflation. 
B)  anticipated rate of inflation less the nominal interest rate. 
C)  the market rate of interest expressed in today's dollars. 
D)  nominal rate of interest less the unanticipated rate of inflation.

Question 16

Unemployment is measured as

Accepted Answer

A)  all teens and adults in the civilian labor force who are not working. 
B)  all adults in the civilian labor force who are willing and able to work and who are actively looking for work, but have not found a job. 
C)  all adults in the civilian labor force, regardless of whether or not they have been engaged in actively seeking employment, who do not have the job they want. 
D)  all adults in the civilian labor force who are not working. 
A)  all teens and adults in the civilian labor force who are not working. 
B)  all adults in the civilian labor force who are willing and able to work and who are actively looking for work, but have not found a job. 
C)  all adults in the civilian labor force, regardless of whether or not they have been engaged in actively seeking employment, who do not have the job they want. 
D)  all adults in the civilian labor force who are not working.

Question 17

An unexpected increase in the rate of inflation

Accepted Answer

A)  benefits both creditors and debtors. 
B)  hurts both creditors and debtors. 
C)  benefits creditors but hurts debtors. 
D)  hurts creditors but benefits debtors. 
A)  benefits both creditors and debtors. 
B)  hurts both creditors and debtors. 
C)  benefits creditors but hurts debtors. 
D)  hurts creditors but benefits debtors.

Question 18

A sustained decrease in the average of all prices of goods and services in the economy is known as

Accepted Answer

A)  inflation. 
B)  disinflation. 
C)  deflation. 
D)  hyperinflation. 
A)  inflation. 
B)  disinflation. 
C)  deflation. 
D)  hyperinflation.

Question 19

Business fluctuations in the United States are

Accepted Answer

A)  smooth and steady. 
B)  predictable. 
C)  controllable. 
D)  irregular and unpredictable. 
A)  smooth and steady. 
B)  predictable. 
C)  controllable. 
D)  irregular and unpredictable.

Question 20

Collin has lost his job with a telemarketing company, which has moved its operation to India. Collin is considered

Accepted Answer

A)  structurally unemployed. 
B)  frictionally unemployed. 
C)  seasonally unemployed. 
D)  a discouraged worker. 
A)  structurally unemployed. 
B)  frictionally unemployed. 
C)  seasonally unemployed. 
D)  a discouraged worker.

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

When an individual is frictionally unemployed, the unemployment arises from

A lifeguard who is out of work in the winter is

All of the following are signals of a recession EXCEPT

A reentrant is an individual

Inflation can be defined as

-Refer to the above table. You are given information on Collin's consumption for 2007 and 2017. Using 2007 as the base year compute the price index for 2017. The index equals

A business fluctuation when the pace of economic activity is slowing down is called

Who stands to gain as a result of unanticipated inflation?

Distinguishing between stock measures and flow measures, the flow measures are

Which of the following is NOT a measure of the general level of prices?

Throughout U.S. history, inflation has been highest

Which of the following people would be considered unemployed by the Bureau of Labor Statistics? I. Mrs. X works 20 hours a week but wishes to work 40 hours a week. II) Mr. Y is laid off from his job as a welder, but expects to be rehired in 8 months.

Inflation is best described as a situation in which

Which of the following people would be considered unemployed assuming that they are actively seeking employment?

The real rate of interest can be defined as the

Unemployment is measured as

An unexpected increase in the rate of inflation

A sustained decrease in the average of all prices of goods and services in the economy is known as

Business fluctuations in the United States are

Collin has lost his job with a telemarketing company, which has moved its operation to India. Collin is considered

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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