Question 1

The inflation rate measures the average prices of goods and services in the economy.

Accepted Answer

A) True 
 B)False

Question 2

The "new product bias" in the consumer price index refers to the idea that

Accepted Answer

A) consumers switch to new goods when the prices of old goods increase,and the CPI overestimates the cost to consumers. 
B) consumers switch to old goods when the prices of new goods increase,and the CPI underestimates the cost to consumers. 
C) consumers prefer new goods,even if they are worse in quality than old goods,and this causes the CPI to underestimate the cost to consumers. 
D) new products' prices often decrease after their initial introduction,and the CPI is adjusted infrequently and overestimates the cost to consumers. 
A) consumers switch to new goods when the prices of old goods increase,and the CPI overestimates the cost to consumers. 
B) consumers switch to old goods when the prices of new goods increase,and the CPI underestimates the cost to consumers. 
C) consumers prefer new goods,even if they are worse in quality than old goods,and this causes the CPI to underestimate the cost to consumers. 
D) new products' prices often decrease after their initial introduction,and the CPI is adjusted infrequently and overestimates the cost to consumers.

Question 3

The costs to firms of changing prices are called menu costs.

Accepted Answer

A) True 
 B)False

Question 4

Suppose you lend $1,000 at an interest rate of 10 percent over the next year.If the expected real interest rate at the beginning of the loan contract is 4 percent,then what rate of inflation over the upcoming year would be most beneficial to you as the lender? An inflation rate

Accepted Answer

A) equal to 0 percent. 
B) greater than 6 percent. 
C) equal to 6 percent. 
D) equal to 4 percent. 
A) equal to 0 percent. 
B) greater than 6 percent. 
C) equal to 6 percent. 
D) equal to 4 percent.

Question 5

The nominal interest rate equals the real interest rate ________ the inflation rate.

Accepted Answer

A) times 
B) divided by 
C) plus 
D) minus 
A) times 
B) divided by 
C) plus 
D) minus

Question 6

In the United States,the typical person who has lost his or her job finds another one in a few months except during severe recessions.

Accepted Answer

A) True 
 B)False

Question 7

If firms pay what are called "efficiency wages," they pay wages that

Accepted Answer

A) motivate workers to increase their productivity. 
B) are lower than average to ensure maximum profit. 
C) will eventually lower the unemployment rate. 
D) are mandated by the government. 
A) motivate workers to increase their productivity. 
B) are lower than average to ensure maximum profit. 
C) will eventually lower the unemployment rate. 
D) are mandated by the government.

Question 8

The recession of 2007-2009 and its aftermath had different effects on various sectors of the economy.Which of the following sectors of the U.S.economy had the highest unemployment rate in August 2011,topping 12 percent?

Accepted Answer

A) education and health services 
B) manufacturing 
C) construction 
D) financial activities 
A) education and health services 
B) manufacturing 
C) construction 
D) financial activities

Question 9

The nominal interest rate plus the inflation rate equals the real interest rate.

Accepted Answer

A) True 
 B)False

Question 10

Fill in the missing values in the table of data collected in the household survey for December,1996.The working-age population,employment,unemployment,and labor force are measured in thousands.Show your work.

Accepted Answer

@#IMG-DLM& Unemployment rate = @#IMG-DLM& × 100.
Unemployed

Question 11

Which of the following policies would reduce frictional unemployment?

Accepted Answer

A) a decrease in the minimum wage 
B) a job retraining program 
C) implementing an unemployment insurance policy 
D) building an on-line job database that helps workers find jobs 
A) a decrease in the minimum wage 
B) a job retraining program 
C) implementing an unemployment insurance policy 
D) building an on-line job database that helps workers find jobs

Question 12

When the actual inflation rate turns out to be greater than the expected inflation rate,who gains - the borrower or the lender - and who loses? Explain why.

Accepted Answer

The borrower gains because he pays back

Question 13

The reasons why someone cannot get a job are similar to the reasons why someone cannot get a date.Using the ideas of frictionally unemployed,structurally unemployed,and cyclically unemployed,describe and explain how a student at your university might be frictionally "undated," structurally "undated," and cyclically "undated."

Accepted Answer

The frictionally "undated" student does

Question 14

Which of the following would be the best measure of the cost of living?

Accepted Answer

A) real GDP 
B) real GDP per person 
C) GDP deflator 
D) consumer price index 
A) real GDP 
B) real GDP per person 
C) GDP deflator 
D) consumer price index

Question 15

Full employment is not considered to be zero unemployment,because

Accepted Answer

A) some cyclical unemployment always exists. 
B) some people do not want a job. 
C) there are not enough jobs for everyone who wants one. 
D) people do not find jobs instantaneously. 
A) some cyclical unemployment always exists. 
B) some people do not want a job. 
C) there are not enough jobs for everyone who wants one. 
D) people do not find jobs instantaneously.

Question 16

A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat.This lumberjack would be

Accepted Answer

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

Question 17

Efficiency wages cause unemployment because

Accepted Answer

A) firms pay wages that are below the market wage,causing the quantity of labor demanded to be greater than the quantity of labor supplied. 
B) firms pay wages that are below the market wage,causing the quantity of labor demanded to be less than the quantity of labor supplied. 
C) firms pay wages that are above the market wage,causing the quantity of labor demanded to be greater than the quantity of labor supplied. 
D) firms pay wages that are above the market wage,causing the quantity of labor demanded to be less than the quantity of labor supplied. 
A) firms pay wages that are below the market wage,causing the quantity of labor demanded to be greater than the quantity of labor supplied. 
B) firms pay wages that are below the market wage,causing the quantity of labor demanded to be less than the quantity of labor supplied. 
C) firms pay wages that are above the market wage,causing the quantity of labor demanded to be greater than the quantity of labor supplied. 
D) firms pay wages that are above the market wage,causing the quantity of labor demanded to be less than the quantity of labor supplied.

Question 18

In the modern U.S.economy,the typical unemployed person stays unemployed for

Accepted Answer

A) a relatively long time,over a year. 
B) a relatively short time,less than six months. 
C) for a long time during expansions and short time during recessions. 
D) an amount of time that is hard to quantify. 
A) a relatively long time,over a year. 
B) a relatively short time,less than six months. 
C) for a long time during expansions and short time during recessions. 
D) an amount of time that is hard to quantify.

Question 19

Table 13-4
  
-Refer to Table 13-4.Assume the market basket for the consumer price index has two products - meat and potatoes - with the following values in 2006 and 2011 for price and quantity: The Consumer Price Index for 2011 equals

Accepted Answer

A) 125. 
B) 129. 
C) 135. 
D) 141. 
A) 125. 
B) 129. 
C) 135. 
D) 141.

Question 20

The stated interest rate on a loan is the

Accepted Answer

A) real interest rate. 
B) nominal interest rate. 
C) actual inflation rate. 
D) expected inflation rate. 
A) real interest rate. 
B) nominal interest rate. 
C) actual inflation rate. 
D) expected inflation rate.

The inflation rate measures the average prices of goods and services in the economy.

The "new product bias" in the consumer price index refers to the idea that

The costs to firms of changing prices are called menu costs.

Suppose you lend $1,000 at an interest rate of 10 percent over the next year.If the expected real interest rate at the beginning of the loan contract is 4 percent,then what rate of inflation over the upcoming year would be most beneficial to you as the lender? An inflation rate

The nominal interest rate equals the real interest rate ________ the inflation rate.

In the United States,the typical person who has lost his or her job finds another one in a few months except during severe recessions.

If firms pay what are called "efficiency wages," they pay wages that

The recession of 2007-2009 and its aftermath had different effects on various sectors of the economy.Which of the following sectors of the U.S.economy had the highest unemployment rate in August 2011,topping 12 percent?

The nominal interest rate plus the inflation rate equals the real interest rate.

Fill in the missing values in the table of data collected in the household survey for December,1996.The working-age population,employment,unemployment,and labor force are measured in thousands.Show your work.

Which of the following policies would reduce frictional unemployment?

When the actual inflation rate turns out to be greater than the expected inflation rate,who gains - the borrower or the lender - and who loses? Explain why.

Which of the following would be the best measure of the cost of living?

Full employment is not considered to be zero unemployment,because

A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat.This lumberjack would be

Efficiency wages cause unemployment because

In the modern U.S.economy,the typical unemployed person stays unemployed for

Table 13-4 -Refer to Table 13-4.Assume the market basket for the consumer price index has two products - meat and potatoes - with the following values in 2006 and 2011 for price and quantity: The Consumer Price Index for 2011 equals

The stated interest rate on a loan is the

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

Exam 13: Unemployment and Inflation

The inflation rate measures the average prices of goods and services in the economy.

The "new product bias" in the consumer price index refers to the idea that

The costs to firms of changing prices are called menu costs.

Suppose you lend $1,000 at an interest rate of 10 percent over the next year.If the expected real interest rate at the beginning of the loan contract is 4 percent,then what rate of inflation over the upcoming year would be most beneficial to you as the lender? An inflation rate

The nominal interest rate equals the real interest rate ________ the inflation rate.

In the United States,the typical person who has lost his or her job finds another one in a few months except during severe recessions.

If firms pay what are called "efficiency wages," they pay wages that

The recession of 2007-2009 and its aftermath had different effects on various sectors of the economy.Which of the following sectors of the U.S.economy had the highest unemployment rate in August 2011,topping 12 percent?

The nominal interest rate plus the inflation rate equals the real interest rate.

Fill in the missing values in the table of data collected in the household survey for December,1996.The working-age population,employment,unemployment,and labor force are measured in thousands.Show your work.

Which of the following policies would reduce frictional unemployment?

When the actual inflation rate turns out to be greater than the expected inflation rate,who gains - the borrower or the lender - and who loses? Explain why.

Which of the following would be the best measure of the cost of living?

Full employment is not considered to be zero unemployment,because

A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat.This lumberjack would be

Efficiency wages cause unemployment because

In the modern U.S.economy,the typical unemployed person stays unemployed for

Table 13-4 -Refer to Table 13-4.Assume the market basket for the consumer price index has two products - meat and potatoes - with the following values in 2006 and 2011 for price and quantity: The Consumer Price Index for 2011 equals

The stated interest rate on a loan is the

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