Exam 7: Unemployment and Inflation.

Raul borrowed $1,000 from Marta for a year and agreed to repay her $1,050 at the end of the year. If the inflation rate was 3 percent, which of the following is the real rate of interest Marta received?

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

The nominal interest rate is determined in the market for loanable funds.

Table 7.1 Table 7.1 Not in Labor Force Unemployed \ Employed Male Female Male Female Male Female 10 million 20 million 2 million 2 million 30 million 20 million -Refer to Table 7.1, which shows data for males and females over 16 years old in the island of Palma. What is the adult unemployment rate?

The higher the expected inflation, _____

Frictional unemployment refers to unemployment that is a result of _____

Which of the following groups experiences high unemployment rates?

Full employment _____

A sustained decrease in an economy's price level is known as deflation.

If two parties to a loan contract agree that the lender should earn an 8 percent increase in purchasing power as a result of a loan and if the inflation rate is 5 percent, the nominal interest rate is _____

Unanticipated inflation generally hurts borrowers and benefits lenders.

Table 7.1 Table 7.1 Not in Labor Force Unemployed \ Employed Male Female Male Female Male Female 10 million 20 million 2 million 2 million 30 million 20 million -Refer to Table 7.1, which shows data for males and females over 16 years old in the island of Palma. What is the adult male unemployment rate?

Structural unemployment refers to unemployment that results from _____

Anticipated inflation causes more problems in an economy than unanticipated inflation.

Hyperinflation refers to a period of extremely erratic inflation rates.

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?

What is the real interest rate if the nominal interest rate is 7 percent and the expected inflation rate is 7 percent?

Table 7.1 Table 7.1 Not in Labor Force Unemployed Employed Male Female Male Female Male Female 10 million 20 million 2 million 2 million 30 million 20 million -Refer to Table 7.1, which shows data for males and females over 16 years old in the island of Palma. What is the adult female population?

The problems of inflation are caused primarily by _____

Inflation can only be caused by an increase in aggregate demand.