Question 1

If the price level rose in three consecutive years from 100 to 120 to 140,then the annual inflation rate over those years would

Accepted Answer

A) increase. 
B) remain the same. 
C) decrease. 
D) equal 20%. 
A) increase. 
B) remain the same. 
C) decrease. 
D) equal 20%.

Question 2

Based in part on the aftermath of the financial crisis that began in 2008 and the speed of the recovery of the U.S.economy following the recession of 2007-2009,Bank of America ________ the number of persons it employed in September 2011 and this ________ the total number of persons unemployed in the economy.

Accepted Answer

A) decreased;increased 
B) decreased;decreased 
C) increased;decreased 
D) increased;increased 
A) decreased;increased 
B) decreased;decreased 
C) increased;decreased 
D) increased;increased

Question 3

If cyclical unemployment is eliminated in the economy,then

Accepted Answer

A) the economy is considered to be at full employment. 
B) the unemployment rate is below the natural rate of unemployment. 
C) the unemployment rate is above the natural rate of unemployment. 
D) the economy is at less than full employment. 
A) the economy is considered to be at full employment. 
B) the unemployment rate is below the natural rate of unemployment. 
C) the unemployment rate is above the natural rate of unemployment. 
D) the economy is at less than full employment.

Question 4

Suppose you borrow $1,000 at an interest rate of 12 percent.If the expected real interest rate is 5 percent,then the rate of inflation over the upcoming year that would be most beneficial to you would be a rate of inflation

Accepted Answer

A) equal to 0 percent. 
B) greater than 7 percent. 
C) equal to 7 percent. 
D) less than 7 percent. 
A) equal to 0 percent. 
B) greater than 7 percent. 
C) equal to 7 percent. 
D) less than 7 percent.

Question 5

If the nominal rate of interest is 6.5% and the inflation rate is 3.0%,what is the real rate of interest?

Accepted Answer

A) -9.5% 
B) -3.5% 
C) 1.5% 
D) 3.5% 
E) 9.5% 
A) -9.5% 
B) -3.5% 
C) 1.5% 
D) 3.5% 
E) 9.5%

Question 6

Eliminating frictional unemployment would be good for the economy.

Accepted Answer

A) True 
 B)False

Question 7

If the federal government implements programs so that the unemployed are more quickly matched with jobs,then

Accepted Answer

A) the natural rate of unemployment will increase. 
B) the natural rate of unemployment will decrease. 
C) the natural rate of unemployment will not change. 
D) the natural rate of unemployment could either increase or decrease. 
A) the natural rate of unemployment will increase. 
B) the natural rate of unemployment will decrease. 
C) the natural rate of unemployment will not change. 
D) the natural rate of unemployment could either increase or decrease.

Question 8

The labor force participation rates of women have rapidly increased since 1948.

Accepted Answer

A) True 
 B)False

Question 9

To understand why someone cannot get a job,it helps to know the three types of unemployment.List the three types of unemployment and explain what causes each type.What advice for finding a job would be appropriate for someone in each type of unemployment?

Accepted Answer

Frictional unemployment is the unemploym

Question 10

After the recession of 2007-2009,the unemployment rate peaked at 10.1 percent in October 2009.23 months later,it had

Accepted Answer

A) dropped by 50 percent. 
B) declined by only 1 percentage point. 
C) remained at 10.1 percent. 
D) fallen to the natural rate of unemployment. 
A) dropped by 50 percent. 
B) declined by only 1 percentage point. 
C) remained at 10.1 percent. 
D) fallen to the natural rate of unemployment.

Question 11

Fill in the missing values in the table of data collected in the household survey for November,2009.The working-age population,employment,unemployment,and labor force are measured in thousands.Show your work.

Accepted Answer

@#IMG-DLM& Labor force participation rate = @#IMG-DLM& × 100

Question 12

If inflation is anticipated,some effects of inflation on the redistribution of income can be avoided.

Accepted Answer

A) True 
 B)False

Question 13

During the 1990s,Japan experienced periods of deflation and very low nominal interest rates,approaching zero percent.Why would lenders of money agree to a nominal interest rate of almost zero?

Accepted Answer

With the deflation,the real in

Question 14

Which of the following statements is true about the U.S.economy?

Accepted Answer

A) Each year,many new jobs are created,but few existing jobs are destroyed,and the unemployed find jobs quickly. 
B) Each year,few new jobs are created,but few existing jobs are destroyed,keeping unemployment low. 
C) Each year,many new jobs are created and many existing jobs are destroyed. 
D) Each year few jobs are created,and therefore it takes the unemployed a long time to find a new job. 
A) Each year,many new jobs are created,but few existing jobs are destroyed,and the unemployed find jobs quickly. 
B) Each year,few new jobs are created,but few existing jobs are destroyed,keeping unemployment low. 
C) Each year,many new jobs are created and many existing jobs are destroyed. 
D) Each year few jobs are created,and therefore it takes the unemployed a long time to find a new job.

Question 15

Which of the following would increase the unemployment rate?

Accepted Answer

A) a law making it illegal to work more than 35 hours per week 
B) a cut in unemployment compensation 
C) an increase in unemployment insurance payments 
D) a decrease in the minimum wage 
A) a law making it illegal to work more than 35 hours per week 
B) a cut in unemployment compensation 
C) an increase in unemployment insurance payments 
D) a decrease in the minimum wage

Question 16

When actual inflation is less than expected inflation,

Accepted Answer

A) borrowers lose and lenders gain. 
B) borrowers gain and lenders lose. 
C) borrowers and lenders both gain. 
D) borrowers and lenders both lose. 
A) borrowers lose and lenders gain. 
B) borrowers gain and lenders lose. 
C) borrowers and lenders both gain. 
D) borrowers and lenders both lose.

Question 17

The labor force participation rate equals the

Accepted Answer

A) (number of employed divided by the labor force)× 100. 
B) (labor force divided by the number of people not in the labor force)× 100. 
C) (labor force divided by working-age population)× 100. 
D) (labor force divided by the total population)× 100. 
A) (number of employed divided by the labor force)× 100. 
B) (labor force divided by the number of people not in the labor force)× 100. 
C) (labor force divided by working-age population)× 100. 
D) (labor force divided by the total population)× 100.

Question 18

Which of the following is true about the consumer price index?

Accepted Answer

A) It accounts for people switching to goods whose prices have fallen. 
B) It assumes that consumers purchase the same amount of each product in the market basket each month. 
C) It frequently updates the price changes of new products added to the market basket,as these have a tendency to fall. 
D) It filters out the part of price increases that occurs because of quality improvements in products. 
A) It accounts for people switching to goods whose prices have fallen. 
B) It assumes that consumers purchase the same amount of each product in the market basket each month. 
C) It frequently updates the price changes of new products added to the market basket,as these have a tendency to fall. 
D) It filters out the part of price increases that occurs because of quality improvements in products.

Question 19

Imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest.If the inflation rate was 7%,what was the real interest rate you paid?

Accepted Answer

A) 17 percent 
B) 10 percent 
C) 7 percent 
D) 3 percent 
A) 17 percent 
B) 10 percent 
C) 7 percent 
D) 3 percent

Question 20

The cost to firms of changing prices

Accepted Answer

A) is small even when there is rapid inflation. 
B) is called a menu cost. 
C) does not exist if inflation is perfectly anticipated. 
D) all of the above 
A) is small even when there is rapid inflation. 
B) is called a menu cost. 
C) does not exist if inflation is perfectly anticipated. 
D) all of the above

If the price level rose in three consecutive years from 100 to 120 to 140,then the annual inflation rate over those years would

Based in part on the aftermath of the financial crisis that began in 2008 and the speed of the recovery of the U.S.economy following the recession of 2007-2009,Bank of America the number of persons it employed in September 2011 and this the total number of persons unemployed in the economy.

If cyclical unemployment is eliminated in the economy,then

Suppose you borrow $1,000 at an interest rate of 12 percent.If the expected real interest rate is 5 percent,then the rate of inflation over the upcoming year that would be most beneficial to you would be a rate of inflation

If the nominal rate of interest is 6.5% and the inflation rate is 3.0%,what is the real rate of interest?

Eliminating frictional unemployment would be good for the economy.

If the federal government implements programs so that the unemployed are more quickly matched with jobs,then

The labor force participation rates of women have rapidly increased since 1948.

To understand why someone cannot get a job,it helps to know the three types of unemployment.List the three types of unemployment and explain what causes each type.What advice for finding a job would be appropriate for someone in each type of unemployment?

After the recession of 2007-2009,the unemployment rate peaked at 10.1 percent in October 2009.23 months later,it had

Fill in the missing values in the table of data collected in the household survey for November,2009.The working-age population,employment,unemployment,and labor force are measured in thousands.Show your work.

If inflation is anticipated,some effects of inflation on the redistribution of income can be avoided.

During the 1990s,Japan experienced periods of deflation and very low nominal interest rates,approaching zero percent.Why would lenders of money agree to a nominal interest rate of almost zero?

Which of the following statements is true about the U.S.economy?

Which of the following would increase the unemployment rate?

When actual inflation is less than expected inflation,

The labor force participation rate equals the

Which of the following is true about the consumer price index?

Imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest.If the inflation rate was 7%,what was the real interest rate you paid?

The cost to firms of changing prices

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

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Exam 13: Unemployment and Inflation

If the price level rose in three consecutive years from 100 to 120 to 140,then the annual inflation rate over those years would

If cyclical unemployment is eliminated in the economy,then

Suppose you borrow $1,000 at an interest rate of 12 percent.If the expected real interest rate is 5 percent,then the rate of inflation over the upcoming year that would be most beneficial to you would be a rate of inflation

If the nominal rate of interest is 6.5% and the inflation rate is 3.0%,what is the real rate of interest?

Eliminating frictional unemployment would be good for the economy.

If the federal government implements programs so that the unemployed are more quickly matched with jobs,then

The labor force participation rates of women have rapidly increased since 1948.

To understand why someone cannot get a job,it helps to know the three types of unemployment.List the three types of unemployment and explain what causes each type.What advice for finding a job would be appropriate for someone in each type of unemployment?

After the recession of 2007-2009,the unemployment rate peaked at 10.1 percent in October 2009.23 months later,it had

Fill in the missing values in the table of data collected in the household survey for November,2009.The working-age population,employment,unemployment,and labor force are measured in thousands.Show your work.

If inflation is anticipated,some effects of inflation on the redistribution of income can be avoided.

During the 1990s,Japan experienced periods of deflation and very low nominal interest rates,approaching zero percent.Why would lenders of money agree to a nominal interest rate of almost zero?

Which of the following statements is true about the U.S.economy?

Which of the following would increase the unemployment rate?

When actual inflation is less than expected inflation,

The labor force participation rate equals the

Which of the following is true about the consumer price index?

Imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest.If the inflation rate was 7%,what was the real interest rate you paid?

The cost to firms of changing prices

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

Filters