Question 1

Suzie Homemaker works in her home as a full-time caretaker and homemaker. Officially, she is:

Accepted Answer

A) ​employed. 
B) ​unemployed. 
C) ​not in the labor force. 
D) ​a discouraged worker. 
A) ​employed. 
B) ​unemployed. 
C) ​not in the labor force. 
D) ​a discouraged worker.

Question 2

Job losers typically account for ____ of the unemployed.

Accepted Answer

A) ​80 to 90 percent 
B) ​50 to 60 percent 
C) ​30 to 40 percent 
D) ​10 to 20 percent 
A) ​80 to 90 percent 
B) ​50 to 60 percent 
C) ​30 to 40 percent 
D) ​10 to 20 percent

Question 3

If the numbers of people officially employed and officially unemployed each increased by 5%, with no change in the non-institutional civilian population, what would be the effect?

Accepted Answer

A) ​an increase in the unemployment rate and no change in the labor force participation rate 
B) ​a decrease in the unemployment rate and no an increase 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 no change in the labor force participation rate 
B) ​a decrease in the unemployment rate and no an increase 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 4

If a large number of individuals file unemployment claims while working in the underground economy:

Accepted Answer

A) ​the unemployment rate overstates the level of unemployment. 
B) ​the unemployment rate understates the level of unemployment. 
C) ​the accuracy of the unemployment rate is not affected. 
D) ​discouraged worker statistics will underestimate the true state of frustration by job seekers. 
A) ​the unemployment rate overstates the level of unemployment. 
B) ​the unemployment rate understates the level of unemployment. 
C) ​the accuracy of the unemployment rate is not affected. 
D) ​discouraged worker statistics will underestimate the true state of frustration by job seekers.

Question 5

Billy loses his job as a road construction worker and cannot find another position with equivalent pay and benefits. As a result, he is still checking the want ads and reporting to the unemployment office on a weekly basis. He is considered to be:

Accepted Answer

A) ​unemployed. 
B) ​out of the labor force. 
C) ​underemployed. 
D) ​lazy. 
A) ​unemployed. 
B) ​out of the labor force. 
C) ​underemployed. 
D) ​lazy.

Question 6

High rates of unemployment are undesirable because:

Accepted Answer

A) ​they cause increased levels of societal tension. 
B) ​society loses potential production of goods and services. 
C) ​families of the unemployed may find it difficult to survive. 
D) ​all of the above. 
A) ​they cause increased levels of societal tension. 
B) ​society loses potential production of goods and services. 
C) ​families of the unemployed may find it difficult to survive. 
D) ​all of the above.

Question 7

In the 1970s, savings and loan associations primarily earned their income from extending fixed-rate home loans. They extended many of these loans in the early 1970s when inflation was low. Were the savings and loans winners or losers as inflation skyrocketed in the late 1970s?
​
​

Accepted Answer

The savings and loan associations were b

Question 8

Which of the following statements is correct?

Accepted Answer

A) ​If unions successfully bargain for higher wages for their union members, employment among union members will increase. 
B) ​Wages are higher in nonunion jobs than in union jobs of comparable skill. 
C) ​The efficiency wage model asserts that higher wages will lead to higher productivity. 
D) ​The imposition of a minimum wage above the market price for unskilled labor creates a shortage of labor. 
A) ​If unions successfully bargain for higher wages for their union members, employment among union members will increase. 
B) ​Wages are higher in nonunion jobs than in union jobs of comparable skill. 
C) ​The efficiency wage model asserts that higher wages will lead to higher productivity. 
D) ​The imposition of a minimum wage above the market price for unskilled labor creates a shortage of labor.

Question 9

Offering employees an efficiency wage may:

Accepted Answer

A) ​reduce turnover. 
B) ​attract the most productive workers. 
C) ​lead to a reduction in training costs. 
D) ​result in any of the above. 
A) ​reduce turnover. 
B) ​attract the most productive workers. 
C) ​lead to a reduction in training costs. 
D) ​result in any of the above.

Question 10

New inventions may displace some workers, but generally lead to the growth of jobs in new industries.

Accepted Answer

A) True 
 B)False

Question 11

The real interest rate equals:

Accepted Answer

A) ​the nominal interest rate minus the inflation rate. 
B) ​the nominal interest rate plus the inflation rate. 
C) ​the inflation rate minus the nominal interest rate. 
D) ​none of the above. 
A) ​the nominal interest rate minus the inflation rate. 
B) ​the nominal interest rate plus the inflation rate. 
C) ​the inflation rate minus the nominal interest rate. 
D) ​none of the above.

Question 12

Which of the following people is most likely to be structurally unemployed?

Accepted Answer

A) Brendan left his job as a short-order cook in New Jersey to become a short-order cook in Madrid, New Mexico.He was unemployed for six weeks during the transition. 
B) Mildred quit her job after giving birth to a child. 
C) Clem, a skilled corset maker, lost his job when his factory shut down due to a permanent reduction in the demand for corsets. 
D) Danielle lost her job when the electronics assembly plant was shut down temporarily due to low product sales in a slumping economy. 
A) Brendan left his job as a short-order cook in New Jersey to become a short-order cook in Madrid, New Mexico.He was unemployed for six weeks during the transition. 
B) Mildred quit her job after giving birth to a child. 
C) Clem, a skilled corset maker, lost his job when his factory shut down due to a permanent reduction in the demand for corsets. 
D) Danielle lost her job when the electronics assembly plant was shut down temporarily due to low product sales in a slumping economy.

Question 13

____ experience lower rates of unemployment than do ____.

Accepted Answer

A) ​High school graduates; college graduates 
B) ​College graduates; high school graduates 
C) ​Adult females; adult males 
D) ​Black males; white males 
A) ​High school graduates; college graduates 
B) ​College graduates; high school graduates 
C) ​Adult females; adult males 
D) ​Black males; white males

Question 14

If a minimum wage law is passed imposing a price floor above the equilibrium price of unskilled labor and employers increasingly used efficiency wages, it would ___ structural unemployment and ____ the natural rate of unemployment:

Accepted Answer

A) ​Increase; increase. 
B) ​Increase; not change. 
C) ​Not change, increase. 
D) ​Do none of the above. 
A) ​Increase; increase. 
B) ​Increase; not change. 
C) ​Not change, increase. 
D) ​Do none of the above.

Question 15

In general, the only thing that can cause a sustained increase in the rate of inflation is:

Accepted Answer

A) ​a high rate of growth in the supply of money. 
B) ​a significant increase in unemployment. 
C) ​a decrease in real GDP. 
D) ​an increase in federal income taxes. 
A) ​a high rate of growth in the supply of money. 
B) ​a significant increase in unemployment. 
C) ​a decrease in real GDP. 
D) ​an increase in federal income taxes.

Question 16

Economists usually use the term "recession" to refer to:

Accepted Answer

A) ​any slowdown in the growth of real GDP. 
B) ​zero real GDP growth. 
C) ​two or more consecutive quarters of declining real GDP. 
D) ​a reduction in nominal GDP lasting more than six months. 
A) ​any slowdown in the growth of real GDP. 
B) ​zero real GDP growth. 
C) ​two or more consecutive quarters of declining real GDP. 
D) ​a reduction in nominal GDP lasting more than six months.

Question 17

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

Question 18

In the typical CPI shopping basket, which of the categories below represents the largest percentage of consumer spending?

Accepted Answer

A) ​housing 
B) ​food & beverages 
C) ​transportation 
D) ​medical care 
A) ​housing 
B) ​food & beverages 
C) ​transportation 
D) ​medical care

Question 19

Parts of the unemployment rate which might increase when labor market conditions are better do include:

Accepted Answer

A) ​Those who voluntarily quit existing jobs. 
B) ​Those who are newly entering the labor force. 
C) ​Those who are re-entering the labor force after leaving it earlier. 
D) ​All of the above. 
A) ​Those who voluntarily quit existing jobs. 
B) ​Those who are newly entering the labor force. 
C) ​Those who are re-entering the labor force after leaving it earlier. 
D) ​All of the above.

Question 20

The unemployment rate measures the number of unemployed people expressed as a percentage of the total population.

Accepted Answer

A) True 
 B)False

Exam 10: Consumer Choice Theory

Suzie Homemaker works in her home as a full-time caretaker and homemaker. Officially, she is:

Job losers typically account for ____ of the unemployed.

If the numbers of people officially employed and officially unemployed each increased by 5%, with no change in the non-institutional civilian population, what would be the effect?

If a large number of individuals file unemployment claims while working in the underground economy:

Billy loses his job as a road construction worker and cannot find another position with equivalent pay and benefits. As a result, he is still checking the want ads and reporting to the unemployment office on a weekly basis. He is considered to be:

High rates of unemployment are undesirable because:

In the 1970s, savings and loan associations primarily earned their income from extending fixed-rate home loans. They extended many of these loans in the early 1970s when inflation was low. Were the savings and loans winners or losers as inflation skyrocketed in the late 1970s? ​ ​

Which of the following statements is correct?

Offering employees an efficiency wage may:

New inventions may displace some workers, but generally lead to the growth of jobs in new industries.

The real interest rate equals:

Which of the following people is most likely to be structurally unemployed?

____ experience lower rates of unemployment than do ____.

If a minimum wage law is passed imposing a price floor above the equilibrium price of unskilled labor and employers increasingly used efficiency wages, it would ___ structural unemployment and ____ the natural rate of unemployment:

In general, the only thing that can cause a sustained increase in the rate of inflation is:

Economists usually use the term "recession" to refer to:

Which of the following is true?

In the typical CPI shopping basket, which of the categories below represents the largest percentage of consumer spending?

Parts of the unemployment rate which might increase when labor market conditions are better do include:

The unemployment rate measures the number of unemployed people expressed as a percentage of the total population.

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

In the 1970s, savings and loan associations primarily earned their income from extending fixed-rate home loans. They extended many of these loans in the early 1970s when inflation was low. Were the savings and loans winners or losers as inflation skyrocketed in the late 1970s?

experience lower rates of unemployment than do .

If a minimum wage law is passed imposing a price floor above the equilibrium price of unskilled labor and employers increasingly used efficiency wages, it would _ structural unemployment and __ the natural rate of unemployment: