Question 1

Which of the following individuals is not among the underemployed or discouraged workers?

Accepted Answer

A) A person employed part-time but willing to work full-time 
B) A homeless person who has not found work for a year and has given up looking for jobs 
C) A nuclear physicist unable to work because of illness 
D) A gourmet French chef working part-time at Burger King 
E) A 60-year-old professor who has stopped looking for a teaching job because schools consider him too old 
A) A person employed part-time but willing to work full-time 
B) A homeless person who has not found work for a year and has given up looking for jobs 
C) A nuclear physicist unable to work because of illness 
D) A gourmet French chef working part-time at Burger King 
E) A 60-year-old professor who has stopped looking for a teaching job because schools consider him too old C

Question 2

To be counted as part of the labor force, a person must:

Accepted Answer

A) be less than 65 years old. 
B) have worked at some time in the past. 
C) be employed in some productive activity. 
D) be working or actively looking for work. 
E) be above 16 years of age. 
A) be less than 65 years old. 
B) have worked at some time in the past. 
C) be employed in some productive activity. 
D) be working or actively looking for work. 
E) be above 16 years of age. D

Question 3

Scenario 7.1 Of 1, 350 people surveyed, 318 are not working.
The status of those not working is as follows:
122 full-time students
29 discouraged workers
18 in long-term-care facilities
21 seeking employment and age 16 or older
50 retirees
63 under age 16
15 working in the underground economy and not looking for a "real" job
Eight of those working were under 16 years of age.
Refer to Scenario 7.1.If any two individuals who were actively looking for a job, got tired of not finding one and decided to become full-time students, then:

Accepted Answer

A) the official unemployment rate would remain unchanged. 
B) the U.S.Bureau of Labor Statistics would have to be informed immediately. 
C) the official unemployment rate would increase. 
D) the number officially in the labor force would remain unchanged. 
E) the official unemployment rate would decrease. 
A) the official unemployment rate would remain unchanged. 
B) the U.S.Bureau of Labor Statistics would have to be informed immediately. 
C) the official unemployment rate would increase. 
D) the number officially in the labor force would remain unchanged. 
E) the official unemployment rate would decrease. E

Question 4

Inflation is defined as the sustained increase in relative prices.

Accepted Answer

A) True 
 B)False

Question 5

Technological advancements cause structural unemployment, however they help in:

Accepted Answer

A) lowering the rate of interest in the economy. 
B) increasing the price level in the economy and hence makes business more profitable for the firms. 
C) improving living standards by giving consumers a greater variety of goods at lower costs. 
D) raising government's tax revenue. 
E) raising the aggregate income in the economy. 
A) lowering the rate of interest in the economy. 
B) increasing the price level in the economy and hence makes business more profitable for the firms. 
C) improving living standards by giving consumers a greater variety of goods at lower costs. 
D) raising government's tax revenue. 
E) raising the aggregate income in the economy.

Question 6

Economists call a severe prolonged economic recession a:

Accepted Answer

A) slump. 
B) depression. 
C) stagnation. 
D) stagflation. 
E) trend. 
A) slump. 
B) depression. 
C) stagnation. 
D) stagflation. 
E) trend.

Question 7

In the 1990s, the unemployment rates in the U.S.were higher than that in the European nations.

Accepted Answer

A) True 
 B)False

Question 8

In the business cycle, a trough marks the end of a(n)_____ and the beginning of a new _____.

Accepted Answer

A) contraction;expansion 
B) peak;expansion 
C) expansion;contraction 
D) peak;contraction 
E) expansion;peak 
A) contraction;expansion 
B) peak;expansion 
C) expansion;contraction 
D) peak;contraction 
E) expansion;peak

Question 9

An increase in stock prices can be considered as an increase in:

Accepted Answer

A) a leading indicator. 
B) a coincident indicator. 
C) the consumer index. 
D) the consumer leverage ratio. 
E) a lagging indicator. 
A) a leading indicator. 
B) a coincident indicator. 
C) the consumer index. 
D) the consumer leverage ratio. 
E) a lagging indicator.

Question 10

The table given below lists the average price level in a country for four consecutive years. Table 7.2
  Refer to Table 7.2.Between 1993 and 1994, the annual inflation rate was _____ percent.

Accepted Answer

A) 2.4 
B) 2.7 
C) 3.8 
D) 6.0 
E) 8.5 
A) 2.4 
B) 2.7 
C) 3.8 
D) 6.0 
E) 8.5

Question 11

The long-run growth in the economy depends on all of the following, except:

Accepted Answer

A) the growth in productive resources. 
B) the level of technological development in the country. 
C) the increase in the availability of inputs. 
D) the increase in the productivity of inputs. 
E) the total number of contractions witnessed during a decade. 
A) the growth in productive resources. 
B) the level of technological development in the country. 
C) the increase in the availability of inputs. 
D) the increase in the productivity of inputs. 
E) the total number of contractions witnessed during a decade.

Question 12

The inflation rate is a:

Accepted Answer

A) change in price level. 
B) percentage increase in price level. 
C) sustained increase in relative prices. 
D) sustained increase in price level. 
E) sudden increase in the weighted average of all prices. 
A) change in price level. 
B) percentage increase in price level. 
C) sustained increase in relative prices. 
D) sustained increase in price level. 
E) sudden increase in the weighted average of all prices.

Question 13

Other things equal, the equation for the real interest rate indicates that:

Accepted Answer

A) as inflation increases, the real interest rate will rise. 
B) as inflation increases, the nominal interest rate will fall. 
C) as inflation decreases, real income will fall. 
D) as inflation decreases, the real interest rate will rise. 
E) as inflation changes, the real interest rate will not change. 
A) as inflation increases, the real interest rate will rise. 
B) as inflation increases, the nominal interest rate will fall. 
C) as inflation decreases, real income will fall. 
D) as inflation decreases, the real interest rate will rise. 
E) as inflation changes, the real interest rate will not change.

Question 14

Unexpected inflation redistributes income:

Accepted Answer

A) away from workers with cost-of-living adjustments, benefiting employers. 
B) away from renters, benefiting landlords. 
C) away from poor people, benefiting the rich. 
D) away from people with fixed incomes, benefiting people with fixed costs. 
E) away from debtors, benefiting creditors. 
A) away from workers with cost-of-living adjustments, benefiting employers. 
B) away from renters, benefiting landlords. 
C) away from poor people, benefiting the rich. 
D) away from people with fixed incomes, benefiting people with fixed costs. 
E) away from debtors, benefiting creditors.

Question 15

Because there is no way to account for them, the official unemployment rate does not include discouraged workers.What would happen to the unemployment rate if, because of a program that gave them new hope, all discouraged workers suddenly begin reporting themselves as ready to work?

Accepted Answer

A) The official unemployment rate would remain unchanged. 
B) The size of the labor force would increase. 
C) The number of individuals officially in the labor force would remain unchanged. 
D) The official unemployment rate would decrease. 
E) The size of the underground economy would shrink. 
A) The official unemployment rate would remain unchanged. 
B) The size of the labor force would increase. 
C) The number of individuals officially in the labor force would remain unchanged. 
D) The official unemployment rate would decrease. 
E) The size of the underground economy would shrink.

Question 16

Which of the following monthly data series are closely observed by the Business Cycle Dating Committee of the NBER?

Accepted Answer

A) Real personal income less transfer payments 
B) Wholesale prices of goods 
C) Real GDP 
D) Total unemployment 
E) Real interest rates 
A) Real personal income less transfer payments 
B) Wholesale prices of goods 
C) Real GDP 
D) Total unemployment 
E) Real interest rates

Question 17

Unemployment will decrease over time if:

Accepted Answer

A) actual GDP increases faster than potential GDP. 
B) actual GDP increases at the same rate as potential GDP. 
C) the GDP gap widens. 
D) actual GDP increases at a less than proportionate rate than potential GDP. 
E) actual GDP decreases but potential GDP increases. 
A) actual GDP increases faster than potential GDP. 
B) actual GDP increases at the same rate as potential GDP. 
C) the GDP gap widens. 
D) actual GDP increases at a less than proportionate rate than potential GDP. 
E) actual GDP decreases but potential GDP increases.

Question 18

General trends in the incidence of unemployment across different demographic groups in the United States show which of the following groups to have the lowest unemployment rates in the country?

Accepted Answer

A) Teenagers 
B) Hispanics 
C) Whites 
D) Nonwhites 
E) Women 
A) Teenagers 
B) Hispanics 
C) Whites 
D) Nonwhites 
E) Women

Question 19

When the real interest rate is less than zero, then:

Accepted Answer

A) a creditor will gain purchasing power. 
B) a creditor will just break even on his or her real loan return. 
C) a creditor will lose purchasing power. 
D) a creditor will benefit from inflation. 
E) a creditor's purchasing power will not be affected, because the nominal interest rate is greater than zero. 
A) a creditor will gain purchasing power. 
B) a creditor will just break even on his or her real loan return. 
C) a creditor will lose purchasing power. 
D) a creditor will benefit from inflation. 
E) a creditor's purchasing power will not be affected, because the nominal interest rate is greater than zero.

Question 20

Hyperinflation is usually accompanied by a great macroeconomic expansion.

Accepted Answer

A) True 
 B)False

Exam 10: Unemployment and Inflation

Which of the following individuals is not among the underemployed or discouraged workers?

To be counted as part of the labor force, a person must:

Inflation is defined as the sustained increase in relative prices.

Technological advancements cause structural unemployment, however they help in:

Economists call a severe prolonged economic recession a:

In the 1990s, the unemployment rates in the U.S.were higher than that in the European nations.

In the business cycle, a trough marks the end of a(n)_____ and the beginning of a new _____.

An increase in stock prices can be considered as an increase in:

The table given below lists the average price level in a country for four consecutive years. Table 7.2 Refer to Table 7.2.Between 1993 and 1994, the annual inflation rate was _____ percent.

The long-run growth in the economy depends on all of the following, except:

The inflation rate is a:

Other things equal, the equation for the real interest rate indicates that:

Unexpected inflation redistributes income:

Because there is no way to account for them, the official unemployment rate does not include discouraged workers.What would happen to the unemployment rate if, because of a program that gave them new hope, all discouraged workers suddenly begin reporting themselves as ready to work?

Which of the following monthly data series are closely observed by the Business Cycle Dating Committee of the NBER?

Unemployment will decrease over time if:

General trends in the incidence of unemployment across different demographic groups in the United States show which of the following groups to have the lowest unemployment rates in the country?

When the real interest rate is less than zero, then:

Hyperinflation is usually accompanied by a great macroeconomic expansion.

Economics: The World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

National Income Accounting

an Introduction to the Foreign Exchange Market and the Balance of Payments

Consumer Choice

Supply: The Costs of Doing Business

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

The Labor Market

Capital Markets

Economic Growth

Development Economics

the Land Market and Natural Resources

Aging, Social Security and Health Care

Globalization

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

Consumer Choice

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Exchange Rates and Financial Links Between Countries

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

In the business cycle, a trough marks the end of a(n)_ and the beginning of a new _.