Question 1

The labour force includes:

Accepted Answer

A) employed workers and persons who are officially unemployed. 
B) employed workers, but excludes persons who are officially unemployed. 
C) full-time workers, but excludes part-time workers. 
D) permanent employees, but excludes temporary employees. 
A) employed workers and persons who are officially unemployed. 
B) employed workers, but excludes persons who are officially unemployed. 
C) full-time workers, but excludes part-time workers. 
D) permanent employees, but excludes temporary employees. A

Question 2

In what circumstances would lenders most benefit?

Accepted Answer

A) when there is an unanticipated decrease in inflation 
B) when there is an anticipated increase in inflation 
C) when there is an unanticipated increase in inflation 
D) when there is an anticipated decrease in inflation 
A) when there is an unanticipated decrease in inflation 
B) when there is an anticipated increase in inflation 
C) when there is an unanticipated increase in inflation 
D) when there is an anticipated decrease in inflation A

Question 3

Structural unemployment:

Accepted Answer

A) is also known as frictional unemployment. 
B) is the main component of cyclical unemployment. 
C) is said to occur when people are waiting to be called back to previous jobs. 
D) may involve a locational mismatch between unemployed workers and job openings. 
A) is also known as frictional unemployment. 
B) is the main component of cyclical unemployment. 
C) is said to occur when people are waiting to be called back to previous jobs. 
D) may involve a locational mismatch between unemployed workers and job openings. D

Question 4

In which industry or sector of the economy is output least likely to be affected by the business cycle?

Accepted Answer

A) housing construction 
B) automobile production 
C) agricultural commodities 
D) capital goods production 
A) housing construction 
B) automobile production 
C) agricultural commodities 
D) capital goods production

Question 5

Given the annual rate of inflation, the "rule of 70" allows one to:

Accepted Answer

A) determine whether the inflation is demand-pull or cost-push. 
B) calculate the accompanying rate of unemployment. 
C) determine when the value of a real asset will approach zero. 
D) calculate the number of years required for the price level to double. 
A) determine whether the inflation is demand-pull or cost-push. 
B) calculate the accompanying rate of unemployment. 
C) determine when the value of a real asset will approach zero. 
D) calculate the number of years required for the price level to double.

Question 6

The natural rate of unemployment is:

Accepted Answer

A) higher than the full-employment rate of unemployment. 
B) lower than the full-employment rate of unemployment. 
C) found by dividing total unemployment by the size of the labour force. 
D) that rate of unemployment occurring when the economy is at its potential output. 
A) higher than the full-employment rate of unemployment. 
B) lower than the full-employment rate of unemployment. 
C) found by dividing total unemployment by the size of the labour force. 
D) that rate of unemployment occurring when the economy is at its potential output.

Question 7

In 2014, Ortega's nominal income rose by 8 percent and the price level rose by 5 percent.We can conclude that Ortega's real income:

Accepted Answer

A) fell by 13 percent. 
B) rose by 13 percent. 
C) rose by 3 percent. 
D) fell by 3 percent. 
A) fell by 13 percent. 
B) rose by 13 percent. 
C) rose by 3 percent. 
D) fell by 3 percent.

Question 8

In Year 1, the price level was 120 and the average nominal income was $30,000.In Year 2, the price level was 125 and the average nominal level of income was $32,000.What happened to real income from Year 1 to Year 2?

Accepted Answer

A) It fell by $400. 
B) It rose by $400. 
C) It rose by $600. 
D) It rose by $2,000. 
A) It fell by $400. 
B) It rose by $400. 
C) It rose by $600. 
D) It rose by $2,000.

Question 9

One perspective on low levels of inflation is that it can:

Accepted Answer

A) reduce real output. 
B) increase real output. 
C) have no effect on real output. 
D) have no effect on businesses. 
A) reduce real output. 
B) increase real output. 
C) have no effect on real output. 
D) have no effect on businesses.

Question 10

When unanticipated deflation occurs:

Accepted Answer

A) creditors and people with fixed income benefit. 
B) both creditors and debtors are hurt. 
C) both debtors and creditors benefit. 
D) people with fixed income benefit but creditors are hurt. 
A) creditors and people with fixed income benefit. 
B) both creditors and debtors are hurt. 
C) both debtors and creditors benefit. 
D) people with fixed income benefit but creditors are hurt.

Question 11

Assume that there is a fixed rate of interest on contracts for borrowers and lenders.If unanticipated inflation occurs in the economy, then:

Accepted Answer

A) both lenders and borrowers benefit. 
B) both lenders and borrowers are hurt. 
C) borrowers are hurt, but lenders benefit. 
D) lenders are hurt, but borrowers benefit. 
A) both lenders and borrowers benefit. 
B) both lenders and borrowers are hurt. 
C) borrowers are hurt, but lenders benefit. 
D) lenders are hurt, but borrowers benefit.

Question 12

Which of the following countries experienced hyperinflation after World War II?

Accepted Answer

A) Japan 
B) Germany 
C) Canada 
D) United Kingdom 
A) Japan 
B) Germany 
C) Canada 
D) United Kingdom

Question 13

Waiting for employment and "searching for employment" are both types of:

Accepted Answer

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

Question 14

Anne Kasperson works in her own home as a full-time caretaker and homemaker.Officially, she is:

Accepted Answer

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

Question 15

To be officially unemployed a person must be in the labour force and must:

Accepted Answer

A) be actively seeking work. 
B) be 21 years of age or older. 
C) have just lost a job. 
D) be waiting to be called back from a layoff. 
A) be actively seeking work. 
B) be 21 years of age or older. 
C) have just lost a job. 
D) be waiting to be called back from a layoff.

Question 16

A peak in the business cycle:

Accepted Answer

A) occurs when the unemployment rate is its greatest. 
B) occurs when the inflation rate is its lowest. 
C) is a temporary maximum point. 
D) is a temporary minimum point. 
A) occurs when the unemployment rate is its greatest. 
B) occurs when the inflation rate is its lowest. 
C) is a temporary maximum point. 
D) is a temporary minimum point.

Question 17

A large negative GDP gap implies:

Accepted Answer

A) an excess of imports over exports. 
B) a low rate of unemployment. 
C) a high rate of unemployment. 
D) a sharply rising price level. 
A) an excess of imports over exports. 
B) a low rate of unemployment. 
C) a high rate of unemployment. 
D) a sharply rising price level.

Question 18

Unanticipated inflation benefits some groups in the economy.

Accepted Answer

A) True 
 B)False

Question 19

A mismatch between the geographic location of workers and the location of job openings would result in what type of unemployment?

Accepted Answer

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

Question 20

In 2017, the number of people who worked part-time was:

Accepted Answer

A) 3.3 million. 
B) 4.5 million. 
C) 2.5 million. 
D) 1.1 million. 
A) 3.3 million. 
B) 4.5 million. 
C) 2.5 million. 
D) 1.1 million.

Exam 9: Part B: Business Cycles, Unemployment, and Inflation

The labour force includes:

In what circumstances would lenders most benefit?

Structural unemployment:

In which industry or sector of the economy is output least likely to be affected by the business cycle?

Given the annual rate of inflation, the "rule of 70" allows one to:

The natural rate of unemployment is:

In 2014, Ortega's nominal income rose by 8 percent and the price level rose by 5 percent.We can conclude that Ortega's real income:

In Year 1, the price level was 120 and the average nominal income was $30,000.In Year 2, the price level was 125 and the average nominal level of income was $32,000.What happened to real income from Year 1 to Year 2?

One perspective on low levels of inflation is that it can:

When unanticipated deflation occurs:

Assume that there is a fixed rate of interest on contracts for borrowers and lenders.If unanticipated inflation occurs in the economy, then:

Which of the following countries experienced hyperinflation after World War II?

Waiting for employment and "searching for employment" are both types of:

Anne Kasperson works in her own home as a full-time caretaker and homemaker.Officially, she is:

To be officially unemployed a person must be in the labour force and must:

A peak in the business cycle:

A large negative GDP gap implies:

Unanticipated inflation benefits some groups in the economy.

A mismatch between the geographic location of workers and the location of job openings would result in what type of unemployment?

In 2017, the number of people who worked part-time was:

Part A: Limits, Alternatives, and Choices

Part B: Limits, Alternatives, and Choices

Part A: The Market System and the Circular Flow

Part B: The Market System and the Circular Flow

Part A: Demand, Supply, and Market Equilibrium

Part B: Demand, Supply, and Market Equilibrium

Part A: Market Failures: Public Goods and Externalities

Part B: Market Failures: Public Goods and Externalities

Part A: Governments Role and Government Failure

Part B: Governments Role and Government Failure

Part A: An Introduction to Macroeconomics

Part B: An Introduction to Macroeconomics

Part A: Measuring the Economys Output

Part B: Measuring the Economys Output

Part A: Economic Growth

Part B: Economic Growth

Part A: Business Cycles, Unemployment, and Inflation

Part A: Basic Macroeconomic Relationships

Part B: Basic Macroeconomic Relationships

Part A: The Aggregate Expenditures Model

Part B: The Aggregate Expenditures Model

Part A: Aggregate Demand and Aggregate Supply

Part B: Aggregate Demand and Aggregate Supply

Part A: Fiscal Policy, Deficits, Surpluses, and Debt

Part B: Fiscal Policy, Deficits, Surpluses, and Debt

Part A: Money, Banking, and Money Creation

Part B: Money, Banking, and Money Creation

Part A: Interest Rates and Monetary Policy

Part B: Interest Rates and Monetary Policy

Part A: Long-Run Macroeconomic Adjustments

Part B: Long-Run Macroeconomic Adjustments

Part A: International Trade

Part B: International Trade

Part C: Financial Economics

Part A: The Balance of Payments and Exchange Rates

Part B: The Balance of Payments and Exchange Rates

The Economics of Developing Countries

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