Question 1

Most economists believe that labor unions significantly increase the overall unemployment rate in the United States.

Accepted Answer

A) True 
 B)False

Question 2

Eliminating structural unemployment would be good for the economy.

Accepted Answer

A) True 
 B)False

Question 3

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 4

Which of the following labor market statistics best indicates the amount of labor that is available to the economy from a given working-age population?

Accepted Answer

A) unemployment rate 
B) discouraged-worker ratio 
C) labor force participation rate 
D) the ratio of minimum wage to inflation 
A) unemployment rate 
B) discouraged-worker ratio 
C) labor force participation rate 
D) the ratio of minimum wage to inflation

Question 5

If inflation is higher than expected,this helps borrowers (by reducing the real interest rate they pay)and hurts lenders (by reducing the real interest rate they receive).

Accepted Answer

A) True 
 B)False

Question 6

Table 9-19
  
-Refer to Table 9-19.Looking at the table above,what is the rate of growth of the average price level from 2014 to 2015?

Accepted Answer

A) 1% 
B) 2% 
C) 3% 
D) 4% 
E) 5% 
A) 1% 
B) 2% 
C) 3% 
D) 4% 
E) 5%

Question 7

Table 9-3
Base Year (2011)2016
  
-Refer to Table 9-3.Assume the market basket for the consumer price index has three products - Cokes,hamburgers,and CDs - with the following values in 2011 and 2016 for price and quantity: The Consumer Price Index for 2016 equals

Accepted Answer

A) 75. 
B) 93. 
C) 108. 
D) 121. 
A) 75. 
B) 93. 
C) 108. 
D) 121.

Question 8

What are menu costs?

Accepted Answer

A) the full list of a firm's costs of production 
B) the costs to a firm of changing prices 
C) the cost to a household of borrowing money when there is deflation 
D) the opportunity cost of dining in a restaurant instead of at home 
A) the full list of a firm's costs of production 
B) the costs to a firm of changing prices 
C) the cost to a household of borrowing money when there is deflation 
D) the opportunity cost of dining in a restaurant instead of at home

Question 9

Which of the following describes actual trends in the U.S.labor force participation rate?

Accepted Answer

A) The labor force participation rate of adult men has risen since 1950. 
B) The labor force participation rate of adult women has fallen since 1950. 
C) The labor force participation rate of adult men not in school,but too young to retire has risen since 1950. 
D) The labor force participation rate of adult women has risen since 1950. 
E) The labor force participation rate of all adults has fallen since 1950. 
A) The labor force participation rate of adult men has risen since 1950. 
B) The labor force participation rate of adult women has fallen since 1950. 
C) The labor force participation rate of adult men not in school,but too young to retire has risen since 1950. 
D) The labor force participation rate of adult women has risen since 1950. 
E) The labor force participation rate of all adults has fallen since 1950.

Question 10

If you want to earn a real interest rate of 3% on money you lend,and you expect that inflation will be 2%,what nominal rate of interest will you charge?

Accepted Answer

A) 1% 
B) 5% 
C) 6% 
D) 9% 
A) 1% 
B) 5% 
C) 6% 
D) 9%

Question 11

If the number employed is 190 million,the number unemployed is 10 million,and the working-age population is 250 million,then the labor force participation rate is

Accepted Answer

A) 4%. 
B) 5.2%. 
C) 60%. 
D) 76%. 
E) 80%. 
A) 4%. 
B) 5.2%. 
C) 60%. 
D) 76%. 
E) 80%.

Question 12

Most economists believe that biases cause changes in the CPI to overstate the inflation rate by ________ percentage points.

Accepted Answer

A) 0.1 to 0.2 
B) 0.2 to 2.0 
C) 0.4 
D) 0.5 to 1.0 
E) 1.0 to 3.0 
A) 0.1 to 0.2 
B) 0.2 to 2.0 
C) 0.4 
D) 0.5 to 1.0 
E) 1.0 to 3.0

Question 13

According to the text,economists consider full employment to occur when

Accepted Answer

A) everyone who wants a job has a job. 
B) frictional unemployment equals zero. 
C) the sum of frictional unemployment and structural unemployment equals zero. 
D) the unemployment rate consists of only frictional and structural unemployment. 
A) everyone who wants a job has a job. 
B) frictional unemployment equals zero. 
C) the sum of frictional unemployment and structural unemployment equals zero. 
D) the unemployment rate consists of only frictional and structural unemployment.

Question 14

Which of the following would be a consequence of substitution bias in the CPI?

Accepted Answer

A) Social Security payments would not adequately compensate retired workers for inflation. 
B) Businesses would overcompensate employees for inflation when giving cost of living raises. 
C) The inflation rate based on the CPI would underestimate the true level of inflation. 
D) Judges would award child support payments that would not adequately keep up with the true cost of inflation. 
A) Social Security payments would not adequately compensate retired workers for inflation. 
B) Businesses would overcompensate employees for inflation when giving cost of living raises. 
C) The inflation rate based on the CPI would underestimate the true level of inflation. 
D) Judges would award child support payments that would not adequately keep up with the true cost of inflation.

Question 15

The U.S.unemployment insurance program

Accepted Answer

A) increases the amount of time the unemployed spend searching for a job. 
B) decreases the level of frictional unemployment. 
C) pays the unemployed a benefit equal to twice the average wage. 
D) eliminates structural unemployment. 
A) increases the amount of time the unemployed spend searching for a job. 
B) decreases the level of frictional unemployment. 
C) pays the unemployed a benefit equal to twice the average wage. 
D) eliminates structural unemployment.

Question 16

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 17

The CPI is also referred to as

Accepted Answer

A) the GDP deflator. 
B) the inflation-consumption index. 
C) the cost-of-living index. 
D) the producer price index. 
A) the GDP deflator. 
B) the inflation-consumption index. 
C) the cost-of-living index. 
D) the producer price index.

Question 18

During the Great Depression,cyclical unemployment increased as the recession continued.This increase in cyclical unemployment

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) could have increased or decreased the natural rate of unemployment. 
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) could have increased or decreased the natural rate of unemployment.

Question 19

If inflation is positive and is perfectly anticipated,

Accepted Answer

A) those that borrow money lose. 
B) those that lend money lose. 
C) those that hold paper money lose. 
D) no one in the economy loses. 
A) those that borrow money lose. 
B) those that lend money lose. 
C) those that hold paper money lose. 
D) no one in the economy loses.

Question 20

Which of the following policies would reduce structural unemployment?

Accepted Answer

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

Most economists believe that labor unions significantly increase the overall unemployment rate in the United States.

Eliminating structural unemployment would be good for the economy.

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

Which of the following labor market statistics best indicates the amount of labor that is available to the economy from a given working-age population?

If inflation is higher than expected,this helps borrowers (by reducing the real interest rate they pay)and hurts lenders (by reducing the real interest rate they receive).

Table 9-19 -Refer to Table 9-19.Looking at the table above,what is the rate of growth of the average price level from 2014 to 2015?

Table 9-3 Base Year (2011)2016 -Refer to Table 9-3.Assume the market basket for the consumer price index has three products - Cokes,hamburgers,and CDs - with the following values in 2011 and 2016 for price and quantity: The Consumer Price Index for 2016 equals

What are menu costs?

Which of the following describes actual trends in the U.S.labor force participation rate?

If you want to earn a real interest rate of 3% on money you lend,and you expect that inflation will be 2%,what nominal rate of interest will you charge?

If the number employed is 190 million,the number unemployed is 10 million,and the working-age population is 250 million,then the labor force participation rate is

Most economists believe that biases cause changes in the CPI to overstate the inflation rate by ________ percentage points.

According to the text,economists consider full employment to occur when

Which of the following would be a consequence of substitution bias in the CPI?

The U.S.unemployment insurance program

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.

The CPI is also referred to as

During the Great Depression,cyclical unemployment increased as the recession continued.This increase in cyclical unemployment

If inflation is positive and is perfectly anticipated,

Which of the following policies would reduce structural unemployment?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 9: Unemployment and Inflation

Most economists believe that labor unions significantly increase the overall unemployment rate in the United States.

Eliminating structural unemployment would be good for the economy.

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

Which of the following labor market statistics best indicates the amount of labor that is available to the economy from a given working-age population?

If inflation is higher than expected,this helps borrowers (by reducing the real interest rate they pay)and hurts lenders (by reducing the real interest rate they receive).

Table 9-19 -Refer to Table 9-19.Looking at the table above,what is the rate of growth of the average price level from 2014 to 2015?

Table 9-3 Base Year (2011)2016 -Refer to Table 9-3.Assume the market basket for the consumer price index has three products - Cokes,hamburgers,and CDs - with the following values in 2011 and 2016 for price and quantity: The Consumer Price Index for 2016 equals

What are menu costs?

Which of the following describes actual trends in the U.S.labor force participation rate?

If you want to earn a real interest rate of 3% on money you lend,and you expect that inflation will be 2%,what nominal rate of interest will you charge?

If the number employed is 190 million,the number unemployed is 10 million,and the working-age population is 250 million,then the labor force participation rate is

Most economists believe that biases cause changes in the CPI to overstate the inflation rate by ________ percentage points.

According to the text,economists consider full employment to occur when

Which of the following would be a consequence of substitution bias in the CPI?

The U.S.unemployment insurance program

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.

The CPI is also referred to as

During the Great Depression,cyclical unemployment increased as the recession continued.This increase in cyclical unemployment

If inflation is positive and is perfectly anticipated,

Which of the following policies would reduce structural unemployment?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters