Question 1

Productivity is the ratio of

Accepted Answer

A)  total output to the total number of worker hours. 
B)  total output to the total population. 
C)  total output to the total number of unemployed. 
D)  total capital to the total number of workers. 
A)  total output to the total number of worker hours. 
B)  total output to the total population. 
C)  total output to the total number of unemployed. 
D)  total capital to the total number of workers.

Question 2

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 2016 is

Accepted Answer

A)  81.2. 
B)  86.8. 
C)  118.8. 
D)  123.2. 
A)  81.2. 
B)  86.8. 
C)  118.8. 
D)  123.2.

Question 3

Matt graduated from college six months ago and is currently without work. He accepted a job that will start in three months. Today, Matt is

Accepted Answer

A)  in the labor force. 
B)  employed. 
C)  a discouraged worker. 
D)  not in the labor force. 
A)  in the labor force. 
B)  employed. 
C)  a discouraged worker. 
D)  not in the labor force.

Question 4

The ratio of total output to the total number of worker hours measures

Accepted Answer

A)  productivity. 
B)  capital per worker. 
C)  the ratio of labor cost to total cost. 
D)  labor force participation. 
A)  productivity. 
B)  capital per worker. 
C)  the ratio of labor cost to total cost. 
D)  labor force participation.

Question 5

Inflation is an increase 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.

Question 6

Related to the Economics in Practice on p. 127: If the number of women entering the labor force is equal to the number of men leaving the labor force, the labor force participation rate will, ceteris paribus,

Accepted Answer

A)  increase. 
B)  decrease. 
C)  not change. 
D)  drop to zero. 
A)  increase. 
B)  decrease. 
C)  not change. 
D)  drop to zero.

Question 7

A customer service representative in Nebraska who loses his job because the company relocated the customer service department to India represents an example of

Accepted Answer

A)  frictional unemployment. 
B)  structural unemployment. 
C)  cyclical unemployment. 
D)  seasonal unemployment. 
A)  frictional unemployment. 
B)  structural unemployment. 
C)  cyclical unemployment. 
D)  seasonal unemployment.

Question 8

You want to make a 10% real return on a loan that you are planning to make, and the expected inflation rate during the period of the loan is 10%. You should charge a nominal interest rate of

Accepted Answer

A)  0%. 
B)  5%. 
C)  10%. 
D)  20%. 
A)  0%. 
B)  5%. 
C)  10%. 
D)  20%.

Question 9

The labor force participation rate is the

Accepted Answer

A)  total number of people who are participating in the labor force. 
B)  ratio of the number of employed people to the number of unemployed people. 
C)  ratio of the labor force to the total population 16 years old or older. 
D)  the number of people in the labor force minus the number of people who are unemployed. 
A)  total number of people who are participating in the labor force. 
B)  ratio of the number of employed people to the number of unemployed people. 
C)  ratio of the labor force to the total population 16 years old or older. 
D)  the number of people in the labor force minus the number of people who are unemployed.

Question 10

During the severe recession of the early 1980s, cyclical unemployment increased as the recession continued. This increase in cyclical unemployment would have

Accepted Answer

A)  increased the natural rate of unemployment. 
B)  decreased the natural rate of unemployment. 
C)  had no effect on the natural rate of unemployment. 
D)  caused structural unemployment to decrease. 
A)  increased the natural rate of unemployment. 
B)  decreased the natural rate of unemployment. 
C)  had no effect on the natural rate of unemployment. 
D)  caused structural unemployment to decrease.

Question 11

The labor force participation rate is the

Accepted Answer

A)  total number of people who are participating in the labor force. 
B)  ratio of the number of employed people to the number of unemployed people. 
C)  ratio of the labor force to the total population 16 years old or older. 
D)  the number of people in the labor force minus the number of people who are unemployed. 
A)  total number of people who are participating in the labor force. 
B)  ratio of the number of employed people to the number of unemployed people. 
C)  ratio of the labor force to the total population 16 years old or older. 
D)  the number of people in the labor force minus the number of people who are unemployed.

Question 12

If the unemployment rate is 7% and the number of people employed is 300,000, total number of people unemployed is approximately

Accepted Answer

A)  21,000 people. 
B)  22,580 people. 
C)  23,330 people. 
D)  42,050 people. 
A)  21,000 people. 
B)  22,580 people. 
C)  23,330 people. 
D)  42,050 people.

Question 13

Refer to the information provided in Table 7.6 below to answer the questions that follow.
Table 7.6  
-Refer to Table 7.6. The bundle price for the goods in period 2015 is

Accepted Answer

A)  $100. 
B)  $57.50. 
C)  $50.50. 
D)  $41.00. 
A)  $100. 
B)  $57.50. 
C)  $50.50. 
D)  $41.00.

Question 14

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 period, the price index in 2014 is

Accepted Answer

A)  1000. 
B)  100. 
C)  10. 
D)  1. 
A)  1000. 
B)  100. 
C)  10. 
D)  1.

Question 15

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 2015 is ________%, and the inflation rate between 2015 and 2016 is ________%.

Accepted Answer

A)  9.4; 11.2 
B)  4.0; 4.9 
C)  6.2; 16.1 
D)  5.8; 5.8 
A)  9.4; 11.2 
B)  4.0; 4.9 
C)  6.2; 16.1 
D)  5.8; 5.8

Question 16

If Homer is paid an interest rate of 2% on his savings, but the inflation rate is 12%, the real interest rate Homer earns is

Accepted Answer

A)  -12%. 
B)  -10%. 
C)  2%. 
D)  14%. 
A)  -12%. 
B)  -10%. 
C)  2%. 
D)  14%.

Question 17

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

Accepted Answer

A)  high inflation 
B)  rapid increase in the general price level 
C)  low unemployment 
D)  low employment 
A)  high inflation 
B)  rapid increase in the general price level 
C)  low unemployment 
D)  low employment

Question 18

A software firm moves its headquarters from California to Ireland. The CFO of the software firm is given the opportunity to move to Ireland. He turns down this opportunity because he does not want to move out of the country. While he is searching for a new job within the United States he would be classified as

Accepted Answer

A)  frictionally unemployed. 
B)  cyclically unemployed. 
C)  structurally unemployed. 
D)  not in the labor force because he turned down the opportunity to relocate. 
A)  frictionally unemployed. 
B)  cyclically unemployed. 
C)  structurally unemployed. 
D)  not in the labor force because he turned down the opportunity to relocate.

Question 19

If the price index in period 2 is 109 and the price index in period 3 is 125, the rate of inflation between period 2 and period 3 is

Accepted Answer

A)  16.0%. 
B)  14.7%. 
C)  9.0%. 
D)  8.7%. 
A)  16.0%. 
B)  14.7%. 
C)  9.0%. 
D)  8.7%.

Question 20

We can safely say that total output can increase if there is a(n)

Accepted Answer

A)  increase in the size of the labor force and a decrease in the productivity of workers. 
B)  decrease in the size of capital and an increase in the productivity of machines. 
C)  increase in the number of machines per worker. 
D)  decrease in the number of workers per machine. 
A)  increase in the size of the labor force and a decrease in the productivity of workers. 
B)  decrease in the size of capital and an increase in the productivity of machines. 
C)  increase in the number of machines per worker. 
D)  decrease in the number of workers per machine.

Productivity is the ratio of

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 2016 is

Matt graduated from college six months ago and is currently without work. He accepted a job that will start in three months. Today, Matt is

The ratio of total output to the total number of worker hours measures

Inflation is an increase in

Related to the Economics in Practice on p. 127: If the number of women entering the labor force is equal to the number of men leaving the labor force, the labor force participation rate will, ceteris paribus,

A customer service representative in Nebraska who loses his job because the company relocated the customer service department to India represents an example of

You want to make a 10% real return on a loan that you are planning to make, and the expected inflation rate during the period of the loan is 10%. You should charge a nominal interest rate of

The labor force participation rate is the

During the severe recession of the early 1980s, cyclical unemployment increased as the recession continued. This increase in cyclical unemployment would have

The labor force participation rate is the

If the unemployment rate is 7% and the number of people employed is 300,000, total number of people unemployed is approximately

Refer to the information provided in Table 7.6 below to answer the questions that follow. Table 7.6 -Refer to Table 7.6. The bundle price for the goods in period 2015 is

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 period, the price index in 2014 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 2015 is %, and the inflation rate between 2015 and 2016 is %.

If Homer is paid an interest rate of 2% on his savings, but the inflation rate is 12%, the real interest rate Homer earns is

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

If the price index in period 2 is 109 and the price index in period 3 is 125, the rate of inflation between period 2 and period 3 is

We can safely say that total output can increase if there is a(n)

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

Filters

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

Productivity is the ratio of

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 2016 is

Matt graduated from college six months ago and is currently without work. He accepted a job that will start in three months. Today, Matt is

The ratio of total output to the total number of worker hours measures

Inflation is an increase in

Related to the Economics in Practice on p. 127: If the number of women entering the labor force is equal to the number of men leaving the labor force, the labor force participation rate will, ceteris paribus,

A customer service representative in Nebraska who loses his job because the company relocated the customer service department to India represents an example of

You want to make a 10% real return on a loan that you are planning to make, and the expected inflation rate during the period of the loan is 10%. You should charge a nominal interest rate of

The labor force participation rate is the

During the severe recession of the early 1980s, cyclical unemployment increased as the recession continued. This increase in cyclical unemployment would have

The labor force participation rate is the

If the unemployment rate is 7% and the number of people employed is 300,000, total number of people unemployed is approximately

Refer to the information provided in Table 7.6 below to answer the questions that follow. Table 7.6 -Refer to Table 7.6. The bundle price for the goods in period 2015 is

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 period, the price index in 2014 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 2015 is ________%, and the inflation rate between 2015 and 2016 is ________%.

If Homer is paid an interest rate of 2% on his savings, but the inflation rate is 12%, the real interest rate Homer earns is

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

If the price index in period 2 is 109 and the price index in period 3 is 125, the rate of inflation between period 2 and period 3 is

We can safely say that total output can increase if there is a(n)

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

Filters

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 2015 is %, and the inflation rate between 2015 and 2016 is %.