Question 1

Cyclical unemployment results from:

Accepted Answer

A) a mismatch of skills. 
B) being in the wrong geographical location. 
C) monetary cost and the time it takes to find the best job. 
D) seasonal decreases in demand for labor. 
E) prolonged declines in business activity. 
A) a mismatch of skills. 
B) being in the wrong geographical location. 
C) monetary cost and the time it takes to find the best job. 
D) seasonal decreases in demand for labor. 
E) prolonged declines in business activity.

Question 2

The unemployment rate measures the:

Accepted Answer

A) number of people in the labor force divided by the adult population. 
B) percentage of people in the labor force who are unemployed. 
C) percentage of people in an economy who have dropped out of the labor force. 
D) number of people in the adult population who are looking for work. 
E) number of people in the labor force who are not working. 
A) number of people in the labor force divided by the adult population. 
B) percentage of people in the labor force who are unemployed. 
C) percentage of people in an economy who have dropped out of the labor force. 
D) number of people in the adult population who are looking for work. 
E) number of people in the labor force who are not working.

Question 3

Recently,banking has become easier with automated teller machines replacing bank tellers.The loss of tellers' jobs is an example of _____.

Accepted Answer

A) cyclical unemployment 
B) structural unemployment 
C) frictional unemployment 
D) underemployment 
E) voluntary unemployment 
A) cyclical unemployment 
B) structural unemployment 
C) frictional unemployment 
D) underemployment 
E) voluntary unemployment

Question 4

Which of the following people would be classified as unemployed?

Accepted Answer

A) A person who wants a job as a fashion model but cannot find work in that field 
B) Someone who quits a part-time job to attend school full time 
C) Someone who does not have a job and gives up looking for one 
D) A person who works at a job that underutilizes his or her skills 
E) A person who works part-time and would rather work full time 
A) A person who wants a job as a fashion model but cannot find work in that field 
B) Someone who quits a part-time job to attend school full time 
C) Someone who does not have a job and gives up looking for one 
D) A person who works at a job that underutilizes his or her skills 
E) A person who works part-time and would rather work full time

Question 5

Full employment is considered a major economic goal because:

Accepted Answer

A) specialization is not possible without full employment. 
B) economic growth can only occur when there is full employment. 
C) the opportunity cost of unemployment is lost production. 
D) profit maximization of firms can only occur when there is full employment. 
E) inflation will be lower when full employment is achieved. 
A) specialization is not possible without full employment. 
B) economic growth can only occur when there is full employment. 
C) the opportunity cost of unemployment is lost production. 
D) profit maximization of firms can only occur when there is full employment. 
E) inflation will be lower when full employment is achieved.

Question 6

Suppose the nominal wages of workers in an economy increase by 7 percent while the price level rises by 5 percent.The real wages:

Accepted Answer

A) would increase by about 2 percent. 
B) would decrease by about 5 percent. 
C) would increase by about 50 percent. 
D) would increase by about 10 percent. 
E) would decrease by about 25 percent. 
A) would increase by about 2 percent. 
B) would decrease by about 5 percent. 
C) would increase by about 50 percent. 
D) would increase by about 10 percent. 
E) would decrease by about 25 percent.

Question 7

In an economy,U = the number of adults who are unemployed,E = the number of adults who are employed,and NLF = the number of adults not in the labor force.The unemployment rate of the economy is equal to:

Accepted Answer

A) U/(E + NLF). 
B) U/E. 
C) U/(U + 
E) . 
D) U/(U + E − NLF). 
A) U/(E + NLF). 
B) U/E. 
C) U/(U + 
E) . 
D) U/(U + E − NLF).

Question 8

Suppose an economy had an inflation rate of 7 percent last year.This has decreased to 6 percent this year.This means that the economy is:

Accepted Answer

A) suffering from hyperinflation. 
B) experiencing deflation. 
C) experiencing disinflation. 
D) experiencing a wage-price spiral. 
E) experiencing a decrease in real wage. 
A) suffering from hyperinflation. 
B) experiencing deflation. 
C) experiencing disinflation. 
D) experiencing a wage-price spiral. 
E) experiencing a decrease in real wage.

Question 9

Inflation:

Accepted Answer

A) always reduces real income. 
B) never reduces real income. 
C) reduces the real income of workers when wages increase more than prices do. 
D) reduces the real income of workers when wages increase less than prices do. 
E) increases the real income of workers only when wages increase less than prices do. 
A) always reduces real income. 
B) never reduces real income. 
C) reduces the real income of workers when wages increase more than prices do. 
D) reduces the real income of workers when wages increase less than prices do. 
E) increases the real income of workers only when wages increase less than prices do.

Question 10

Which of the following people would be counted as employed?

Accepted Answer

A) A retired naval officer 
B) A high school student 
C) A stay-at-home father 
D) A teenager who has given up looking for work after a year of trying 
E) A ski instructor who is working during the summer 
A) A retired naval officer 
B) A high school student 
C) A stay-at-home father 
D) A teenager who has given up looking for work after a year of trying 
E) A ski instructor who is working during the summer

Question 11

A recent college graduate who is looking for her first job would be considered _____.

Accepted Answer

A) a discouraged worker 
B) underemployed 
C) overemployed 
D) unemployed 
E) not in the labor force 
A) a discouraged worker 
B) underemployed 
C) overemployed 
D) unemployed 
E) not in the labor force

Question 12

If the aggregate demand curve shifts rightward,then _____.

Accepted Answer

A) the price level increases and output decreases 
B) the resulting increase in the price level is usually called cost-push inflation 
C) the resulting increase in the price level is usually called demand-pull inflation 
D) the price level increases as long as the aggregate supply curve shifts leftward 
E) the price level decreases and output decreases 
A) the price level increases and output decreases 
B) the resulting increase in the price level is usually called cost-push inflation 
C) the resulting increase in the price level is usually called demand-pull inflation 
D) the price level increases as long as the aggregate supply curve shifts leftward 
E) the price level decreases and output decreases

Question 13

Demand-pull inflation is worse than cost-push inflation because,in addition to higher prices,demand-pull inflation also reduces employment.

Accepted Answer

A) True 
 B)False

Question 14

Construction workers at times face high rates of unemployment because their work is both seasonal and subject to wide swings over the business cycle.

Accepted Answer

A) True 
 B)False

Question 15

If inflation is much higher than originally anticipated,_____ are better off and _____ are worse off.

Accepted Answer

A) lenders who extended loans at fixed interest rates;people who borrowed at fixed interest rates 
B) people who borrowed at fixed interest rates;banks that extended loans at fixed interest rates 
C) retired people living on a fixed income;people who had borrowed fixed interest rate loans 
D) people who deposited their savings at fixed interest rates;banks that accepted deposits at fixed interest rates 
E) oil refiners who signed labor contracts agreeing to pay their workers the cost-of-living wage;workers who receive that cost-of-living wage 
A) lenders who extended loans at fixed interest rates;people who borrowed at fixed interest rates 
B) people who borrowed at fixed interest rates;banks that extended loans at fixed interest rates 
C) retired people living on a fixed income;people who had borrowed fixed interest rate loans 
D) people who deposited their savings at fixed interest rates;banks that accepted deposits at fixed interest rates 
E) oil refiners who signed labor contracts agreeing to pay their workers the cost-of-living wage;workers who receive that cost-of-living wage

Question 16

Anne is an accountant who lost her job in the last recession and has given up looking for work after an unsuccessful job search.Which of the following is true in this case?

Accepted Answer

A) She is a discouraged worker. 
B) She is underemployed. 
C) This is an example of cyclical unemployment. 
D) This is an example of seasonal unemployment. 
E) She is overemployed. 
A) She is a discouraged worker. 
B) She is underemployed. 
C) This is an example of cyclical unemployment. 
D) This is an example of seasonal unemployment. 
E) She is overemployed.

Question 17

The unemployment rate rises any time there is an increase in the number of unemployed persons.

Accepted Answer

A) True 
 B)False

Question 18

The best example of a frictionally unemployed worker is one who:

Accepted Answer

A) has been looking for work for 27 weeks or longer. 
B) is laid off during a recessionary period in the economy. 
C) is in the process of voluntarily switching jobs. 
D) is discouraged and not actively seeking work. 
E) cannot find a job that matches with his skills. 
A) has been looking for work for 27 weeks or longer. 
B) is laid off during a recessionary period in the economy. 
C) is in the process of voluntarily switching jobs. 
D) is discouraged and not actively seeking work. 
E) cannot find a job that matches with his skills.

Question 19

The view that union wage demands may be a source of inflation would be best associated with cost-push inflation.

Accepted Answer

A) True 
 B)False

Question 20

People who are not currently employed but say they want a job are counted as unemployed only if they:

Accepted Answer

A) have previously held a job. 
B) are actively seeking employment. 
C) are discouraged workers. 
D) are between 16 and 65 years of age. 
E) are willing to accept any offer of employment. 
A) have previously held a job. 
B) are actively seeking employment. 
C) are discouraged workers. 
D) are between 16 and 65 years of age. 
E) are willing to accept any offer of employment.

Cyclical unemployment results from:

The unemployment rate measures the:

Recently,banking has become easier with automated teller machines replacing bank tellers.The loss of tellers' jobs is an example of _____.

Which of the following people would be classified as unemployed?

Full employment is considered a major economic goal because:

Suppose the nominal wages of workers in an economy increase by 7 percent while the price level rises by 5 percent.The real wages:

In an economy,U = the number of adults who are unemployed,E = the number of adults who are employed,and NLF = the number of adults not in the labor force.The unemployment rate of the economy is equal to:

Suppose an economy had an inflation rate of 7 percent last year.This has decreased to 6 percent this year.This means that the economy is:

Inflation:

Which of the following people would be counted as employed?

A recent college graduate who is looking for her first job would be considered _____.

If the aggregate demand curve shifts rightward,then _____.

Demand-pull inflation is worse than cost-push inflation because,in addition to higher prices,demand-pull inflation also reduces employment.

Construction workers at times face high rates of unemployment because their work is both seasonal and subject to wide swings over the business cycle.

If inflation is much higher than originally anticipated,_ are better off and _ are worse off.

Anne is an accountant who lost her job in the last recession and has given up looking for work after an unsuccessful job search.Which of the following is true in this case?

The unemployment rate rises any time there is an increase in the number of unemployed persons.

The best example of a frictionally unemployed worker is one who:

The view that union wage demands may be a source of inflation would be best associated with cost-push inflation.

People who are not currently employed but say they want a job are counted as unemployed only if they:

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 7: Unemployment and Inflation

Cyclical unemployment results from:

The unemployment rate measures the:

Recently,banking has become easier with automated teller machines replacing bank tellers.The loss of tellers' jobs is an example of _____.

Which of the following people would be classified as unemployed?

Full employment is considered a major economic goal because:

Suppose the nominal wages of workers in an economy increase by 7 percent while the price level rises by 5 percent.The real wages:

In an economy,U = the number of adults who are unemployed,E = the number of adults who are employed,and NLF = the number of adults not in the labor force.The unemployment rate of the economy is equal to:

Suppose an economy had an inflation rate of 7 percent last year.This has decreased to 6 percent this year.This means that the economy is:

Inflation:

Which of the following people would be counted as employed?

A recent college graduate who is looking for her first job would be considered _____.

If the aggregate demand curve shifts rightward,then _____.

Demand-pull inflation is worse than cost-push inflation because,in addition to higher prices,demand-pull inflation also reduces employment.

Construction workers at times face high rates of unemployment because their work is both seasonal and subject to wide swings over the business cycle.

If inflation is much higher than originally anticipated,_____ are better off and _____ are worse off.

Anne is an accountant who lost her job in the last recession and has given up looking for work after an unsuccessful job search.Which of the following is true in this case?

The unemployment rate rises any time there is an increase in the number of unemployed persons.

The best example of a frictionally unemployed worker is one who:

The view that union wage demands may be a source of inflation would be best associated with cost-push inflation.

People who are not currently employed but say they want a job are counted as unemployed only if they:

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

If inflation is much higher than originally anticipated,_ are better off and _ are worse off.