Question 1

Looking at the labor statistics of the United States from 1951 to 2002, we find that the unemployment rate for women is higher than that for men in most years.

Accepted Answer

A) True 
 B)False

Question 2

Assume that the U.S.labor force consists of 185 million workers and that 17.5 million are officially unemployed.What is the unemployment rate if 68.5 million are under age 16 and 6 million are institutionalized?

Accepted Answer

A) 11.4 percent 
B) 10.0 percent 
C) 9.5 percent 
D) 7.5 percent 
E) 10.8 percent 
A) 11.4 percent 
B) 10.0 percent 
C) 9.5 percent 
D) 7.5 percent 
E) 10.8 percent

Question 3

Which of the following countries did not experience hyperinflation in the past 20 years?

Accepted Answer

A) South Korea 
B) Nicaragua 
C) Ukraine 
D) Bolivia 
E) Argentina 
A) South Korea 
B) Nicaragua 
C) Ukraine 
D) Bolivia 
E) Argentina

Question 4

During the off season, a fruit picker did not work, so he should be considered:

Accepted Answer

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

Question 5

Which of the following is the closest example of structural unemployment?

Accepted Answer

A) An accountant quits her job to become an investment banker. 
B) An auto worker is fired for poor job performance. 
C) Workers in a firms manufacturing films for roll film cameras lost jobs once digital cameras became common. 
D) A consultant is laid off because poor economic conditions have depressed the market for consultants. 
E) A college graduate seeking his/her first job in the IT industry. 
A) An accountant quits her job to become an investment banker. 
B) An auto worker is fired for poor job performance. 
C) Workers in a firms manufacturing films for roll film cameras lost jobs once digital cameras became common. 
D) A consultant is laid off because poor economic conditions have depressed the market for consultants. 
E) A college graduate seeking his/her first job in the IT industry.

Question 6

The figure given below represents the demand and supply conditions of an economy. Figure 7.3   Refer to Figure 7.3.Which of the following explains the shift in supply curve from S1 to S2?

Accepted Answer

A) decreases in oil supplies as experienced in the 1970s. 
B) wage concessions by union members. 
C) businesses reducing their profit margins. 
D) discoveries of natural gas. 
E) increased foreign demand for domestic products. 
A) decreases in oil supplies as experienced in the 1970s. 
B) wage concessions by union members. 
C) businesses reducing their profit margins. 
D) discoveries of natural gas. 
E) increased foreign demand for domestic products.

Question 7

At potential real GDP:

Accepted Answer

A) there is zero unemployment. 
B) there is no seasonal unemployment. 
C) there is no frictional unemployment. 
D) unemployment is at its natural rate. 
E) cyclical unemployment equals approximately 5 percent. 
A) there is zero unemployment. 
B) there is no seasonal unemployment. 
C) there is no frictional unemployment. 
D) unemployment is at its natural rate. 
E) cyclical unemployment equals approximately 5 percent.

Question 8

Demand-pull inflation is more likely to occur when the economy is producing at maximum capacity.

Accepted Answer

A) True 
 B)False

Question 9

The table given below reports the consumer price index in a country for four different years. Table 7.1
  Refer to Table 7.1.By how much did consumer prices rise between 1980 and 2003 (rounded to the first decimal place)?

Accepted Answer

A) 34.5 percent 
B) 10.5 percent 
C) 13.3 percent 
D) 31.2 percent 
E) 76.2 percent 
A) 34.5 percent 
B) 10.5 percent 
C) 13.3 percent 
D) 31.2 percent 
E) 76.2 percent

Question 10

Which of the following is true of expected inflation?

Accepted Answer

A) It increases the efficiency of the economy. 
B) It is more of a problem than unexpected inflation. 
C) It results in lower prices over time as people make adjustments. 
D) It is not a major problem if people can make the right interest rate and income level adjustments. 
E) It is necessarily tied to a decline in purchasing power. 
A) It increases the efficiency of the economy. 
B) It is more of a problem than unexpected inflation. 
C) It results in lower prices over time as people make adjustments. 
D) It is not a major problem if people can make the right interest rate and income level adjustments. 
E) It is necessarily tied to a decline in purchasing power.

Question 11

Which of the following is an example of cyclical unemployment?

Accepted Answer

A) A recent college graduate still looking for her first job 
B) A car salesman who loses his job because of a recession 
C) A ski instructor who is out of work during the summer 
D) An economics journalist who just quit her writing job in order to begin a new career as a college professor next month 
E) A worker displaced from his factory job because of greater mechanization in the workplace 
A) A recent college graduate still looking for her first job 
B) A car salesman who loses his job because of a recession 
C) A ski instructor who is out of work during the summer 
D) An economics journalist who just quit her writing job in order to begin a new career as a college professor next month 
E) A worker displaced from his factory job because of greater mechanization in the workplace

Question 12

Variable-rate mortgages decrease the risks associated with unexpected inflation.

Accepted Answer

A) True 
 B)False

Question 13

The table given below lists the average price level in a country for four consecutive years. Table 7.2
  Refer to Table 7.2.What was the purchasing power of the dollar in 1995 relative to the base year 1992?

Accepted Answer

A) 0.54 
B) 0.72 
C) 0.91 
D) 0.97 
E) 1.93 
A) 0.54 
B) 0.72 
C) 0.91 
D) 0.97 
E) 1.93

Question 14

The part of a business cycle that follows a peak is the:

Accepted Answer

A) trough phase of the cycle. 
B) break-even point of the cycle. 
C) peak period of the cycle. 
D) recessionary phase of the cycle. 
E) expansionary phase of the cycle. 
A) trough phase of the cycle. 
B) break-even point of the cycle. 
C) peak period of the cycle. 
D) recessionary phase of the cycle. 
E) expansionary phase of the cycle.

Question 15

If a student borrowed $5, 000 at a fixed rate of 8.9 percent to pay for this year's college expenses and the annual inflation rate turns out to be 11 percent, then the student's purchasing power for the year has increased.

Accepted Answer

A) True 
 B)False

Question 16

The cost-of-living adjustments that are included in the wage contracts protect:

Accepted Answer

A) businesses from unexpected inflation. 
B) workers from unexpected inflation. 
C) workers from expected inflation. 
D) employers from unexpected inflation. 
E) consumers from expected inflation. 
A) businesses from unexpected inflation. 
B) workers from unexpected inflation. 
C) workers from expected inflation. 
D) employers from unexpected inflation. 
E) consumers from expected inflation.

Question 17

The official dating of recessions in the United States is the responsibility of the:

Accepted Answer

A) Bureau of Labor Statistics (BLS). 
B) Internal Revenue Service (IRS). 
C) Federal Reserve. 
D) Congress. 
E) National Bureau of Economic Research (NBER). 
A) Bureau of Labor Statistics (BLS). 
B) Internal Revenue Service (IRS). 
C) Federal Reserve. 
D) Congress. 
E) National Bureau of Economic Research (NBER).

Question 18

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.According to the data provided, the number of workers officially unemployed is:

Accepted Answer

A) 122. 
B) 36. 
C) 40. 
D) 21. 
E) 55. 
A) 122. 
B) 36. 
C) 40. 
D) 21. 
E) 55.

Question 19

When the economy moves into recession, some companies lay off workers.Those unemployed workers are experiencing cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 20

If an economy operates on its production possibilities frontier, the natural unemployment rate must be:

Accepted Answer

A) zero. 
B) positive. 
C) negative. 
D) at 1 percent. 
E) at 5 percent. 
A) zero. 
B) positive. 
C) negative. 
D) at 1 percent. 
E) at 5 percent.

Exam 10: Unemployment and Inflation

Looking at the labor statistics of the United States from 1951 to 2002, we find that the unemployment rate for women is higher than that for men in most years.

Assume that the U.S.labor force consists of 185 million workers and that 17.5 million are officially unemployed.What is the unemployment rate if 68.5 million are under age 16 and 6 million are institutionalized?

Which of the following countries did not experience hyperinflation in the past 20 years?

During the off season, a fruit picker did not work, so he should be considered:

Which of the following is the closest example of structural unemployment?

The figure given below represents the demand and supply conditions of an economy. Figure 7.3 Refer to Figure 7.3.Which of the following explains the shift in supply curve from S1 to S2?

At potential real GDP:

Demand-pull inflation is more likely to occur when the economy is producing at maximum capacity.

The table given below reports the consumer price index in a country for four different years. Table 7.1 Refer to Table 7.1.By how much did consumer prices rise between 1980 and 2003 (rounded to the first decimal place)?

Which of the following is true of expected inflation?

Which of the following is an example of cyclical unemployment?

Variable-rate mortgages decrease the risks associated with unexpected inflation.

The table given below lists the average price level in a country for four consecutive years. Table 7.2 Refer to Table 7.2.What was the purchasing power of the dollar in 1995 relative to the base year 1992?

The part of a business cycle that follows a peak is the:

If a student borrowed $5, 000 at a fixed rate of 8.9 percent to pay for this year's college expenses and the annual inflation rate turns out to be 11 percent, then the student's purchasing power for the year has increased.

The cost-of-living adjustments that are included in the wage contracts protect:

The official dating of recessions in the United States is the responsibility of the:

When the economy moves into recession, some companies lay off workers.Those unemployed workers are experiencing cyclical unemployment.

If an economy operates on its production possibilities frontier, the natural unemployment rate must be:

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

The figure given below represents the demand and supply conditions of an economy. Figure 7.3 Refer to Figure 7.3.Which of the following explains the shift in supply curve from S₁ to S₂?