Question 1

The difference between the nominal interest rate and the rate of inflation is:

Accepted Answer

A) ​the prime rate. 
B) ​the real interest rate. 
C) ​the discount rate. 
D) ​coupon rate. 
A) ​the prime rate. 
B) ​the real interest rate. 
C) ​the discount rate. 
D) ​coupon rate.

Question 2

If the unemployment rate is 8 percent, this means:

Accepted Answer

A) ​8 percent of the population is unemployed. 
B) ​8 percent of the population over age 16 is unemployed. 
C) ​8 percent of the labor force is unemployed. 
D) ​the number of unemployed persons equals 8 percent of the employed persons. 
A) ​8 percent of the population is unemployed. 
B) ​8 percent of the population over age 16 is unemployed. 
C) ​8 percent of the labor force is unemployed. 
D) ​the number of unemployed persons equals 8 percent of the employed persons.

Question 3

How do high rates of inflation lead to an increased frequency of cash withdrawals from an ATM or a bank?

Accepted Answer

High rates of inflation erode the value

Question 4

Economists use the term "business cycle" to refer to:

Accepted Answer

A) ​the growth of small businesses into major corporations. 
B) ​qualitative changes in products resulting from improved technology. 
C) ​fluctuations in economic activity, measured by GDP or unemployment. 
D) ​periods of increase or decrease in the rate of inflation. 
A) ​the growth of small businesses into major corporations. 
B) ​qualitative changes in products resulting from improved technology. 
C) ​fluctuations in economic activity, measured by GDP or unemployment. 
D) ​periods of increase or decrease in the rate of inflation.

Question 5

The term full employment implies an unemployment rate of:

Accepted Answer

A) ​zero 
B) ​approximately 5% 
C) ​approximately 10% 
D) ​100% 
A) ​zero 
B) ​approximately 5% 
C) ​approximately 10% 
D) ​100%

Question 6

In the expansion phase of the business cycle

Accepted Answer

A) ​output is rising. 
B) ​unemployment is falling. 
C) ​consumer and business confidence is high. 
D) ​all of the above are true. 
A) ​output is rising. 
B) ​unemployment is falling. 
C) ​consumer and business confidence is high. 
D) ​all of the above are true.

Question 7

The unemployment rate is the number of people classified as unemployed as a percentage of:

Accepted Answer

A) ​the entire population. 
B) ​the population over the age of sixteen. 
C) ​the labor force. 
D) ​the number of people over the age of sixteen who are employed. 
A) ​the entire population. 
B) ​the population over the age of sixteen. 
C) ​the labor force. 
D) ​the number of people over the age of sixteen who are employed.

Question 8

If inflation had long been 4% and was therefore expected to continue, then it unexpectedly increased to 7% inflation:

Accepted Answer

A) ​the real interest rate on loans issued just before the change occurred would decrease by three percentage points. 
B) ​the real interest rate on loans issued just before the change occurred would increase by three percentage points. 
C) ​the real interest rate on loans issued just before the change occurred would not change. 
D) ​none of the above. 
A) ​the real interest rate on loans issued just before the change occurred would decrease by three percentage points. 
B) ​the real interest rate on loans issued just before the change occurred would increase by three percentage points. 
C) ​the real interest rate on loans issued just before the change occurred would not change. 
D) ​none of the above.

Question 9

If unemployment benefits, payable for 26 weeks, became more generous it would be likely to _____ structural unemployment and _____ the natural rate of unemployment:

Accepted Answer

A) ​Not change; not change 
B) ​Not change; increase 
C) ​Increase; increase 
D) ​Increase; not change 
A) ​Not change; not change 
B) ​Not change; increase 
C) ​Increase; increase 
D) ​Increase; not change

Question 10

The most significant real economic cost of high unemployment is:

Accepted Answer

A) ​the money cost of unemployment insurance payments to the unemployed. 
B) ​the lost tax revenue that might have been paid by persons if they had worked. 
C) ​the difference in income between a person's lost job and new job. 
D) ​the potential goods and services that might have been produced but weren't. 
A) ​the money cost of unemployment insurance payments to the unemployed. 
B) ​the lost tax revenue that might have been paid by persons if they had worked. 
C) ​the difference in income between a person's lost job and new job. 
D) ​the potential goods and services that might have been produced but weren't.

Question 11

If the numbers of people officially employed and officially unemployed each increased by 10%, while the non-institutional population increased by 15%, what would be the effect?

Accepted Answer

A) ​an increase in the unemployment rate and an increase in the labor force participation rate 
B) ​an increase in the unemployment rate and a decrease in the labor force participation rate 
C) ​No change in the unemployment rate and an increase in the labor force participation rate 
D) ​No change in the unemployment rate and a decrease in the labor force participation rate 
A) ​an increase in the unemployment rate and an increase in the labor force participation rate 
B) ​an increase in the unemployment rate and a decrease in the labor force participation rate 
C) ​No change in the unemployment rate and an increase in the labor force participation rate 
D) ​No change in the unemployment rate and a decrease in the labor force participation rate

Question 12

____ experience higher rates of unemployment than do ____.

Accepted Answer

A) ​Teenagers; adults 
B) ​Adult males; adult females 
C) ​Skilled workers; unskilled workers 
D) ​White males; Hispanic males 
A) ​Teenagers; adults 
B) ​Adult males; adult females 
C) ​Skilled workers; unskilled workers 
D) ​White males; Hispanic males

Question 13

Which of the following is true?

Accepted Answer

A) ​At below the natural rate of unemployment, the economy is considered to be beyond full employment. 
B) ​At below full employment, the economy is producing more than potential output. 
C) ​At below full employment, unemployment would be below its natural rate. 
D) ​All of the above are true. 
A) ​At below the natural rate of unemployment, the economy is considered to be beyond full employment. 
B) ​At below full employment, the economy is producing more than potential output. 
C) ​At below full employment, unemployment would be below its natural rate. 
D) ​All of the above are true.

Question 14

The category of unemployment that is a byproduct of geographic and occupational mobility and generally considered to be a limited problem is:

Accepted Answer

A) ​frictional unemployment. 
B) ​underemployment. 
C) ​cyclical unemployment. 
D) ​structural unemployment. 
A) ​frictional unemployment. 
B) ​underemployment. 
C) ​cyclical unemployment. 
D) ​structural unemployment.

Question 15

Which of the following individuals are considered officially unemployed?

Accepted Answer

A) ​a discouraged worker 
B) ​an individual who quits his job to raise a child 
C) ​an individual who is not looking for a job because he works in the underground economy 
D) ​None of the above 
A) ​a discouraged worker 
B) ​an individual who quits his job to raise a child 
C) ​an individual who is not looking for a job because he works in the underground economy 
D) ​None of the above

Question 16

If you were a borrower, which of the following unexpected changes in inflation would you prefer once you have taken out a long term fixed rate loan?

Accepted Answer

A) ​An increase from 2% inflation to 6% inflation. 
B) ​An increase from 7% inflation to 10% inflation. 
C) ​A decrease from 14% inflation to 8% inflation. 
D) ​A decrease from 6% inflation to 3%. 
A) ​An increase from 2% inflation to 6% inflation. 
B) ​An increase from 7% inflation to 10% inflation. 
C) ​A decrease from 14% inflation to 8% inflation. 
D) ​A decrease from 6% inflation to 3%.

Question 17

The portion of unemployment that is attributable to an overall decline in the economy's business activity is called:

Accepted Answer

A) ​frictional unemployment. 
B) ​underemployment. 
C) ​cyclical unemployment. 
D) ​structural unemployment. 
A) ​frictional unemployment. 
B) ​underemployment. 
C) ​cyclical unemployment. 
D) ​structural unemployment.

Question 18

Fred lost his factory job, replaced by welding robots. He is now going to technical school to learn computer repair because he cannot find a similar job to the one he lost. Fred is:

Accepted Answer

A) ​Frictionally unemployed. 
B) ​Structurally unemployed. 
C) ​Cyclically unemployed. 
D) ​Not unemployed. 
A) ​Frictionally unemployed. 
B) ​Structurally unemployed. 
C) ​Cyclically unemployed. 
D) ​Not unemployed.

Question 19

If the real interest rate is 3% and the inflation rate is 6%, the nominal interest rate is

Accepted Answer

A) ​2% 
B) ​3% 
C) ​9% 
D) 18% 
A) ​2% 
B) ​3% 
C) ​9% 
D) 18%

Question 20

What are the four phases of the classical business cycle and how is employment typically affected during each phase?​

Accepted Answer

The four phases of the business cycle ar

Exam 10: Consumer Choice Theory

The difference between the nominal interest rate and the rate of inflation is:

If the unemployment rate is 8 percent, this means:

How do high rates of inflation lead to an increased frequency of cash withdrawals from an ATM or a bank?

Economists use the term "business cycle" to refer to:

The term full employment implies an unemployment rate of:

In the expansion phase of the business cycle

The unemployment rate is the number of people classified as unemployed as a percentage of:

If inflation had long been 4% and was therefore expected to continue, then it unexpectedly increased to 7% inflation:

If unemployment benefits, payable for 26 weeks, became more generous it would be likely to _____ structural unemployment and _____ the natural rate of unemployment:

The most significant real economic cost of high unemployment is:

If the numbers of people officially employed and officially unemployed each increased by 10%, while the non-institutional population increased by 15%, what would be the effect?

____ experience higher rates of unemployment than do ____.

Which of the following is true?

The category of unemployment that is a byproduct of geographic and occupational mobility and generally considered to be a limited problem is:

Which of the following individuals are considered officially unemployed?

If you were a borrower, which of the following unexpected changes in inflation would you prefer once you have taken out a long term fixed rate loan?

The portion of unemployment that is attributable to an overall decline in the economy's business activity is called:

Fred lost his factory job, replaced by welding robots. He is now going to technical school to learn computer repair because he cannot find a similar job to the one he lost. Fred is:

If the real interest rate is 3% and the inflation rate is 6%, the nominal interest rate is

What are the four phases of the classical business cycle and how is employment typically affected during each phase?​

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

If unemployment benefits, payable for 26 weeks, became more generous it would be likely to _ structural unemployment and _ the natural rate of unemployment:

experience higher rates of unemployment than do .

What are the four phases of the classical business cycle and how is employment typically affected during each phase?