Question 1

If discouraged workers were counted as unemployed, the measured unemployment rate would increase.

Accepted Answer

A) True 
 B)False

Question 2

Estimates for the natural rate of unemployment in the United States range from

Accepted Answer

A)  4% to 6%. 
B)  2% to 10%. 
C)  1% to 5%. 
D)  3% to 8%. 
A)  4% to 6%. 
B)  2% to 10%. 
C)  1% to 5%. 
D)  3% to 8%.

Question 3

Refer to the information provided in Table 7.6 below to answer the questions that follow.
Table 7.6  
-Refer to Table 7.6. If 2014 is the base year, the inflation rate between 2014 and 2016 is

Accepted Answer

A)  40.2%. 
B)  28.7%. 
C)  25.1%. 
D)  17.4%. 
A)  40.2%. 
B)  28.7%. 
C)  25.1%. 
D)  17.4%.

Question 4

Refer to the information provided in Table 7.5 below to answer the questions that follow.
Table 7.5  
-Refer to Table 7.5. If 2015 is the base year, the price index in 2013 is

Accepted Answer

A)  75.4. 
B)  84.2. 
C)  118.8. 
D)  133.5. 
A)  75.4. 
B)  84.2. 
C)  118.8. 
D)  133.5.

Question 5

For Joanna to be considered out of the labor force, she can be

Accepted Answer

A)  a full-time student. 
B)  temporarily laid off. 
C)  working only 10 hours per week. 
D)  self-employed. 
A)  a full-time student. 
B)  temporarily laid off. 
C)  working only 10 hours per week. 
D)  self-employed.

Question 6

The only source of economic growth is growth in the number of workers in the economy.

Accepted Answer

A) True 
 B)False

Question 7

Refer to the information provided in Table 7.2 below to answer the questions that follow.
Table 7.2  
-Refer to Table 7.2. The labor force

Accepted Answer

A)  equals 130 million. 
B)  equals 150 million. 
C)  equals 170 million 
D)  cannot be determined from this information. 
A)  equals 130 million. 
B)  equals 150 million. 
C)  equals 170 million 
D)  cannot be determined from this information.

Question 8

When a radiologist quits her job at a public hospital and starts looking for a better radiology job in a private practice, she is

Accepted Answer

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

Question 9

Jake retired from the police force. He started working an hour or two a day at a paid job in city's courthouse. Jake is

Accepted Answer

A)  employed. 
B)  in the labor force. 
C)  unemployed. 
D)  not in the labor force. 
A)  employed. 
B)  in the labor force. 
C)  unemployed. 
D)  not in the labor force.

Question 10

A measurement showing how the average price of a bundle of goods changes over time is a

Accepted Answer

A)  nominal price. 
B)  price index. 
C)  real price. 
D)  sticky price. 
A)  nominal price. 
B)  price index. 
C)  real price. 
D)  sticky price.

Question 11

If period 1 is the base year, the bundle price of goods in period 1 is $200, and the bundle price of goods in period 2 is $240, the period 2 price index is

Accepted Answer

A)  80.0. 
B)  83.3. 
C)  116.7. 
D)  120.0. 
A)  80.0. 
B)  83.3. 
C)  116.7. 
D)  120.0.

Question 12

The sum of frictional and structural unemployment is thought of as the

Accepted Answer

A)  natural rate of unemployment. 
B)  normal rate of unemployment. 
C)  cyclical rate of unemployment. 
D)  seasonal rate of unemployment. 
A)  natural rate of unemployment. 
B)  normal rate of unemployment. 
C)  cyclical rate of unemployment. 
D)  seasonal rate of unemployment.

Question 13

When an individual quits his job and decides to look for a new job immediately, the labor-force participation rate

Accepted Answer

A)  decreases. 
B)  increases. 
C)  stays the same. 
D)  may increase or decrease, depending on the length of time he/she stays at home. 
A)  decreases. 
B)  increases. 
C)  stays the same. 
D)  may increase or decrease, depending on the length of time he/she stays at home.

Question 14

Which of the following is not a desirable feature in an economy?

Accepted Answer

A)  rapid increase in output per worker 
B)  rapid increase in the general price level 
C)  low unemployment 
D)  low inflation 
A)  rapid increase in output per worker 
B)  rapid increase in the general price level 
C)  low unemployment 
D)  low inflation

Question 15

Refer to the information provided in Table 7.4 below to answer the questions that follow.
Table 7.4  
-Refer to Table 7.4. The total number of people unemployed is

Accepted Answer

A)  10 million. 
B)  8 million. 
C)  6 million. 
D)  3 million. 
A)  10 million. 
B)  8 million. 
C)  6 million. 
D)  3 million.

Question 16

If the price index in 2015 is 115 and the price index in 2016 is 102, the rate of inflation between 2015 and 2016 is

Accepted Answer

A)  13.0%. 
B)  12.7%. 
C)  -11.3%. 
D)  -13.0%. 
A)  13.0%. 
B)  12.7%. 
C)  -11.3%. 
D)  -13.0%.

Question 17

The difference between the interest rate on a loan and the inflation rate is the

Accepted Answer

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

Question 18

Refer to the information provided in Table 7.6 below to answer the questions that follow.
Table 7.6  
-Refer to Table 7.6. If 2014 is the base year, the inflation rate between 2014 and 2015 is

Accepted Answer

A)  12.4%. 
B)  17.6%. 
C)  19.1%. 
D)  23.2%. 
A)  12.4%. 
B)  17.6%. 
C)  19.1%. 
D)  23.2%.

Question 19

The CPI in period 1 is 300 and the CPI in period 2 is 150. The rate of inflation between period 1 and period 2 is

Accepted Answer

A)  -100%. 
B)  -60%. 
C)  -50%. 
D)  33.33%. 
A)  -100%. 
B)  -60%. 
C)  -50%. 
D)  33.33%.

Question 20

Deflation is a decrease in

Accepted Answer

A)  the price of one item. 
B)  the overall price level. 
C)  the average income level. 
D)  real gross national product. 
A)  the price of one item. 
B)  the overall price level. 
C)  the average income level. 
D)  real gross national product.

Exam 7: Unemployment, Inflation, and Long-Run Growth

If discouraged workers were counted as unemployed, the measured unemployment rate would increase.

Estimates for the natural rate of unemployment in the United States range from

Refer to the information provided in Table 7.6 below to answer the questions that follow. Table 7.6 -Refer to Table 7.6. If 2014 is the base year, the inflation rate between 2014 and 2016 is

Refer to the information provided in Table 7.5 below to answer the questions that follow. Table 7.5 -Refer to Table 7.5. If 2015 is the base year, the price index in 2013 is

For Joanna to be considered out of the labor force, she can be

The only source of economic growth is growth in the number of workers in the economy.

Refer to the information provided in Table 7.2 below to answer the questions that follow. Table 7.2 -Refer to Table 7.2. The labor force

When a radiologist quits her job at a public hospital and starts looking for a better radiology job in a private practice, she is

Jake retired from the police force. He started working an hour or two a day at a paid job in city's courthouse. Jake is

A measurement showing how the average price of a bundle of goods changes over time is a

If period 1 is the base year, the bundle price of goods in period 1 is $200, and the bundle price of goods in period 2 is $240, the period 2 price index is

The sum of frictional and structural unemployment is thought of as the

When an individual quits his job and decides to look for a new job immediately, the labor-force participation rate

Which of the following is not a desirable feature in an economy?

Refer to the information provided in Table 7.4 below to answer the questions that follow. Table 7.4 -Refer to Table 7.4. The total number of people unemployed is

If the price index in 2015 is 115 and the price index in 2016 is 102, the rate of inflation between 2015 and 2016 is

The difference between the interest rate on a loan and the inflation rate is the

Refer to the information provided in Table 7.6 below to answer the questions that follow. Table 7.6 -Refer to Table 7.6. If 2014 is the base year, the inflation rate between 2014 and 2015 is

The CPI in period 1 is 300 and the CPI in period 2 is 150. The rate of inflation between period 1 and period 2 is

Deflation is a decrease in

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

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