Question 1

Which of the following is a desirable characteristic in an economy?

Accepted Answer

A)  growing per-capita output 
B)  high inflation 
C)  cyclical unemployment 
D)  sustained deflation 
A)  growing per-capita output 
B)  high inflation 
C)  cyclical unemployment 
D)  sustained deflation

Question 2

Which of the following is not considered capital?

Accepted Answer

A)  a factory a company builds to produce other output 
B)  a tractor produced by John Deere 
C)  the knowledge an individual acquires through education 
D)  10,000 U.S. dollars 
A)  a factory a company builds to produce other output 
B)  a tractor produced by John Deere 
C)  the knowledge an individual acquires through education 
D)  10,000 U.S. dollars

Question 3

The Humphrey-Hawkins Act formally established a specific unemployment target for the economy of

Accepted Answer

A)  2%. 
B)  4%. 
C)  6%. 
D)  8%. 
A)  2%. 
B)  4%. 
C)  6%. 
D)  8%.

Question 4

A depression is

Accepted Answer

A)  deflation with economic growth. 
B)  a general increase in the price level. 
C)  a prolonged and deep recession. 
D)  most common in an expansionary economy. 
A)  deflation with economic growth. 
B)  a general increase in the price level. 
C)  a prolonged and deep recession. 
D)  most common in an expansionary economy.

Question 5

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 inflation rate between 2014 and 2016 is

Accepted Answer

A)  4.0%. 
B)  5.8%. 
C)  6.2%. 
D)  9.4%. 
A)  4.0%. 
B)  5.8%. 
C)  6.2%. 
D)  9.4%.

Question 6

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 2014 is the base year, the price index in 2013 is

Accepted Answer

A)  89.3. 
B)  96.0. 
C)  104.0. 
D)  111.9. 
A)  89.3. 
B)  96.0. 
C)  104.0. 
D)  111.9.

Question 7

An inflation rate that is higher than expected benefits debtors.

Accepted Answer

A) True 
 B)False

Question 8

When an economics professor quits his/her job at a university and starts looking for a better job in another university, he/she is

Accepted Answer

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

Question 9

If the number of people classified as unemployed is 20,000 and the number of people classified as employed is 400,000, what is the unemployment rate?

Accepted Answer

A)  2.0% 
B)  4.8% 
C)  5.0% 
D)  9.2% 
A)  2.0% 
B)  4.8% 
C)  5.0% 
D)  9.2%

Question 10

If Lola is classified as a discouraged worker, she is

Accepted Answer

A)  part of the labor force. 
B)  structurally unemployed. 
C)  frictionally unemployed. 
D)  not part of the labor force. 
A)  part of the labor force. 
B)  structurally unemployed. 
C)  frictionally unemployed. 
D)  not part of the labor force.

Question 11

When anticipated inflation occurs regularly, the degree of risk associated with investments in the economy

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains stable. 
D)  falls to zero. 
A)  increases. 
B)  decreases. 
C)  remains stable. 
D)  falls to zero.

Question 12

In the United States in 2015, the highest unemployment rate was for ________ and the lowest was for ________.

Accepted Answer

A)  African-American teenagers; white women 
B)  African-American men; white men 
C)  white teenagers; white men 
D)  African-American women; white men 
A)  African-American teenagers; white women 
B)  African-American men; white men 
C)  white teenagers; white men 
D)  African-American women; white men

Question 13

Sustained inflation is

Accepted Answer

A)  the same as hyperinflation. 
B)  also called stagflation. 
C)  a constant increase in the price of one product or service in the economy. 
D)  an increase in the overall price level that continues over a significant period of time. 
A)  the same as hyperinflation. 
B)  also called stagflation. 
C)  a constant increase in the price of one product or service in the economy. 
D)  an increase in the overall price level that continues over a significant period of time.

Question 14

Any unemployment that does not occur as a part of a normal functioning economy is most likely ________ unemployment.

Accepted Answer

A)  cyclical 
B)  structural 
C)  natural 
D)  frictional 
A)  cyclical 
B)  structural 
C)  natural 
D)  frictional

Question 15

If 2015 is the base year and the inflation rate between 2015 and 2016 is 5.2%, the price index in 2016 is

Accepted Answer

A)  52.0. 
B)  100.52. 
C)  102.50. 
D)  105.20. 
A)  52.0. 
B)  100.52. 
C)  102.50. 
D)  105.20.

Question 16

Discouraged workers are

Accepted Answer

A)  considered cyclically unemployed. 
B)  considered structurally unemployed. 
C)  considered frictionally unemployed. 
D)  not considered as part of the labor force. 
A)  considered cyclically unemployed. 
B)  considered structurally unemployed. 
C)  considered frictionally unemployed. 
D)  not considered as part of the labor force.

Question 17

The consumer price index is the index most often used to measure

Accepted Answer

A)  unemployment. 
B)  per capita income. 
C)  inflation. 
D)  the labor force. 
A)  unemployment. 
B)  per capita income. 
C)  inflation. 
D)  the labor force.

Question 18

Which of the following statements is true?

Accepted Answer

A)  One benefit with any fixed-bundle index as a measure of the cost of living is that it does not account for substitutions that consumers might make in response to price changes. 
B)  The producer price index is considered to be a leading indicator of future inflation rates. 
C)  The best overall indicator of inflationary pressures in the economy is the CPI. 
D)  The consumer price index somewhat understates changes in the cost of living. 
A)  One benefit with any fixed-bundle index as a measure of the cost of living is that it does not account for substitutions that consumers might make in response to price changes. 
B)  The producer price index is considered to be a leading indicator of future inflation rates. 
C)  The best overall indicator of inflationary pressures in the economy is the CPI. 
D)  The consumer price index somewhat understates changes in the cost of living.

Question 19

If the labor force is 575,000 and the total population 16 years of age or older is 650,000, the labor-force participation rate is

Accepted Answer

A)  65.0%. 
B)  75.0%. 
C)  88.5%. 
D)  92.5%. 
A)  65.0%. 
B)  75.0%. 
C)  88.5%. 
D)  92.5%.

Question 20

If the labor-force participation rate is 90% and the total population 16 years of age or older is 3 million people, the labor force is

Accepted Answer

A)  2,450,000 people. 
B)  2,700,000 people. 
C)  3,300,000 people. 
D)  3,900,000 people. 
A)  2,450,000 people. 
B)  2,700,000 people. 
C)  3,300,000 people. 
D)  3,900,000 people.

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

Which of the following is a desirable characteristic in an economy?

Which of the following is not considered capital?

The Humphrey-Hawkins Act formally established a specific unemployment target for the economy of

A depression 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 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 2014 is the base year, the price index in 2013 is

An inflation rate that is higher than expected benefits debtors.

When an economics professor quits his/her job at a university and starts looking for a better job in another university, he/she is

If the number of people classified as unemployed is 20,000 and the number of people classified as employed is 400,000, what is the unemployment rate?

If Lola is classified as a discouraged worker, she is

When anticipated inflation occurs regularly, the degree of risk associated with investments in the economy

In the United States in 2015, the highest unemployment rate was for ________ and the lowest was for ________.

Sustained inflation is

Any unemployment that does not occur as a part of a normal functioning economy is most likely ________ unemployment.

If 2015 is the base year and the inflation rate between 2015 and 2016 is 5.2%, the price index in 2016 is

Discouraged workers are

The consumer price index is the index most often used to measure

Which of the following statements is true?

If the labor force is 575,000 and the total population 16 years of age or older is 650,000, the labor-force participation rate is

If the labor-force participation rate is 90% and the total population 16 years of age or older is 3 million people, the labor force is

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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In the United States in 2015, the highest unemployment rate was for and the lowest was for .