Question 1

The economy is at full employment when only the:

Accepted Answer

A)  cyclically unemployed are out of work. 
B)  frictionally unemployed are out of work. 
C)  structurally unemployed are out of work. 
D)  cyclically and structurally unemployed are out of work. 
A)  cyclically unemployed are out of work. 
B)  frictionally unemployed are out of work. 
C)  structurally unemployed are out of work. 
D)  cyclically and structurally unemployed are out of work.

Question 2

According to Application 4.1, "What's at Stake When a Job is Lost?":

Accepted Answer

A)  the loss of a job typically has no effect on a household's sense of economic security. 
B)  the effect of the loss of a job is typically overstated because most people do not particularly like their work. 
C)  the loss of a job can lead to noneconomic problems, such as depression and divorce, as well as to economic problems. 
D)  because of government unemployment payments, the damage to economic security caused by the loss of a job is relatively small. 
A)  the loss of a job typically has no effect on a household's sense of economic security. 
B)  the effect of the loss of a job is typically overstated because most people do not particularly like their work. 
C)  the loss of a job can lead to noneconomic problems, such as depression and divorce, as well as to economic problems. 
D)  because of government unemployment payments, the damage to economic security caused by the loss of a job is relatively small.

Question 3

Full production occurs when:

Accepted Answer

A)  an economy is at full employment. 
B)  actual output equals potential output. 
C)  an economy is producing at maximum capacity. 
D)  all of the above. 
A)  an economy is at full employment. 
B)  actual output equals potential output. 
C)  an economy is producing at maximum capacity. 
D)  all of the above.

Question 4

Average labor productivity has been decreasing over the last two decades.

Accepted Answer

A) True 
 B)False

Question 5

An economy experiences inflation when:

Accepted Answer

A)  prices are high. 
B)  prices are increasing. 
C)  the purchasing power of money is high. 
D)  the purchasing power of money is increasing. 
A)  prices are high. 
B)  prices are increasing. 
C)  the purchasing power of money is high. 
D)  the purchasing power of money is increasing.

Question 6

An auto worker laid off from a job because the economy is in a slump and car sales are down is classified as:

Accepted Answer

A)  cyclically unemployed. 
B)  seasonally unemployed. 
C)  frictionally unemployed. 
D)  structurally unemployed. 
A)  cyclically unemployed. 
B)  seasonally unemployed. 
C)  frictionally unemployed. 
D)  structurally unemployed.

Question 7

A product that cost $250 in the base year costs $300 this year. The price index number for this year is:

Accepted Answer

A)  50.0. 
B)  83.0 
C)  120.0. 
D)  150.0. 
A)  50.0. 
B)  83.0 
C)  120.0. 
D)  150.0.

Question 8

The formula for calculating real GDP is:

Accepted Answer

A)  (money GDP - GDP price index number) x 100. 
B)  (money GDP / GDP price index number) x 100. 
C)  (money GDP x GDP price index number) /100. 
D)  (GDP price index number / money GDP) x 100. 
A)  (money GDP - GDP price index number) x 100. 
B)  (money GDP / GDP price index number) x 100. 
C)  (money GDP x GDP price index number) /100. 
D)  (GDP price index number / money GDP) x 100.

Question 9

If money GDP were $10.0 trillion in a particular year, and the GDP price index number were 125.0 for that year, then real GDP would be:

Accepted Answer

A)  $8.00 trillion. 
B)  $8.75 trillion. 
C)  $11.25 trillion. 
D)  $12.5 trillion. 
A)  $8.00 trillion. 
B)  $8.75 trillion. 
C)  $11.25 trillion. 
D)  $12.5 trillion.

Question 10

Inflation is undesirable because it leads to:

Accepted Answer

A)  purchasing power losses. 
B)  lower real incomes to lenders with interest rates lower than the inflation rate. 
C)  increases in property prices, which can keep the less wealthy from acquiring assets. 
D)  all of the above. 
A)  purchasing power losses. 
B)  lower real incomes to lenders with interest rates lower than the inflation rate. 
C)  increases in property prices, which can keep the less wealthy from acquiring assets. 
D)  all of the above.

Question 11

Which of the following is not a major macroeconomic goal of the United States:

Accepted Answer

A)  full employment. 
B)  stable prices. 
C)  economic growth. 
D)  a vibrant underground economy. 
A)  full employment. 
B)  stable prices. 
C)  economic growth. 
D)  a vibrant underground economy.

Question 12

The "official"unemployment rate may understate the extent to which labor resources are underutilized because:

Accepted Answer

A)  the official rate does not include discouraged workers. 
B)  the official rate is a national figure that does not reflect regional employment differences. 
C)  official statistics categorize a person as employed if he or she did any work at all for pay during the survey week. 
D)  all of the above 
A)  the official rate does not include discouraged workers. 
B)  the official rate is a national figure that does not reflect regional employment differences. 
C)  official statistics categorize a person as employed if he or she did any work at all for pay during the survey week. 
D)  all of the above

Question 13

The price index number for Year 5 is 120.0. In Year 6, it increased to 150.0. Between Year 5 and Year 6, prices increased by:

Accepted Answer

A)  25%. 
B)  30%. 
C)  80%. 
D)  125%. 
A)  25%. 
B)  30%. 
C)  80%. 
D)  125%.

Question 14

Mike made $28,000 in 2001. He did not receive a raise in 2002, so his income remained at $28,000. Between 2001 and 2002, inflation was 2.2 %. Which of the following statements is True?

Accepted Answer

A)  Mike's real income stayed the same from 2001 to 2002. 
B)  Mike's purchasing power stayed the same from 2001 to 2002. 
C)  Mike's real income fell from 2001 to 2002. 
D)  Mike's real income increased by 2.2% from 2001 to 2002. 
A)  Mike's real income stayed the same from 2001 to 2002. 
B)  Mike's purchasing power stayed the same from 2001 to 2002. 
C)  Mike's real income fell from 2001 to 2002. 
D)  Mike's real income increased by 2.2% from 2001 to 2002.

Question 15

The _____________ rate of unemployment occurs when the unemployment rate includes only frictional and structural unemployment.

Accepted Answer

The answer of The _____________ rate of unemployment occurs when...

Question 16

The overall unemployment rate:

Accepted Answer

A)  is the same as the rate for each state. 
B)  overstates unemployment by including discouraged workers who would like to leave their jobs. 
C)  is a good measure of unemployment because different regions experience similar unemployment conditions. 
D)  is a national figure that does not disclose different unemployment conditions experienced in different regions of the country. 
A)  is the same as the rate for each state. 
B)  overstates unemployment by including discouraged workers who would like to leave their jobs. 
C)  is a good measure of unemployment because different regions experience similar unemployment conditions. 
D)  is a national figure that does not disclose different unemployment conditions experienced in different regions of the country.

Question 17

The price index that measures price changes for the entire economy, regardless of whether the goods and services measured are purchased by households, businesses, or government units is the:

Accepted Answer

A)  GDP Price Index. 
B)  Aggregate Price Index. 
C)  Consumer Price Index. 
D)  Compound Price Index. 
A)  GDP Price Index. 
B)  Aggregate Price Index. 
C)  Consumer Price Index. 
D)  Compound Price Index.

Question 18

Productive activities that are not reported for tax purposes and are not included in GDP are part of the _______________ ______________.

Accepted Answer

The answer of Productive activities that are not reported for...

Question 19

When prices increase, real income:

Accepted Answer

A)  increases. 
B)  decreases. 
C)  is unaffected. 
D)  becomes a poor measure of purchasing power. 
A)  increases. 
B)  decreases. 
C)  is unaffected. 
D)  becomes a poor measure of purchasing power.

Question 20

-If year 3 is the base year:

Accepted Answer

A)  the price index number for year 3 is 500.0. 
B)  the price index number for year 4 is greater than 100.0. 
C)  the price index number for year 4 is 0.20. 
D)  the price index numbers for years 1 and 2 are less than zero. 
A)  the price index number for year 3 is 500.0. 
B)  the price index number for year 4 is greater than 100.0. 
C)  the price index number for year 4 is 0.20. 
D)  the price index numbers for years 1 and 2 are less than zero.

The economy is at full employment when only the:

According to Application 4.1, "What's at Stake When a Job is Lost?":

Full production occurs when:

Average labor productivity has been decreasing over the last two decades.

An economy experiences inflation when:

An auto worker laid off from a job because the economy is in a slump and car sales are down is classified as:

A product that cost $250 in the base year costs $300 this year. The price index number for this year is:

The formula for calculating real GDP is:

If money GDP were $10.0 trillion in a particular year, and the GDP price index number were 125.0 for that year, then real GDP would be:

Inflation is undesirable because it leads to:

Which of the following is not a major macroeconomic goal of the United States:

The "official"unemployment rate may understate the extent to which labor resources are underutilized because:

The price index number for Year 5 is 120.0. In Year 6, it increased to 150.0. Between Year 5 and Year 6, prices increased by:

Mike made $28,000 in 2001. He did not receive a raise in 2002, so his income remained at $28,000. Between 2001 and 2002, inflation was 2.2 %. Which of the following statements is True?

The _____________ rate of unemployment occurs when the unemployment rate includes only frictional and structural unemployment.

The overall unemployment rate:

The price index that measures price changes for the entire economy, regardless of whether the goods and services measured are purchased by households, businesses, or government units is the:

Productive activities that are not reported for tax purposes and are not included in GDP are part of the _ .

When prices increase, real income:

-If year 3 is the base year:

Introduction to Economics

Economic Decision Making and Economic Systems

Demand, Supply, and the Determination of Price

Foundations of the Macroeconomy

The Role of Government in the Macroeconomy

Money, Financial Institutions, and the Federal Reserve

Money Creation, Monetary Theory, and Monetary Policy

Macroeconomic Viewpoints and Models

Households and Businesses: An Overview

Benefits, Costs, and Maximization

Production and the Costs of Production

Competition and Market Structures

Government and the Markets

Labor Markets, Unions, and the Distribution of Income-A

International Trade

International Finance

Filters

Exam 4: Goals and Problems of the Macroeconomy: Employment, Prices and Production

The economy is at full employment when only the:

According to Application 4.1, "What's at Stake When a Job is Lost?":

Full production occurs when:

Average labor productivity has been decreasing over the last two decades.

An economy experiences inflation when:

An auto worker laid off from a job because the economy is in a slump and car sales are down is classified as:

A product that cost $250 in the base year costs $300 this year. The price index number for this year is:

The formula for calculating real GDP is:

If money GDP were $10.0 trillion in a particular year, and the GDP price index number were 125.0 for that year, then real GDP would be:

Inflation is undesirable because it leads to:

Which of the following is not a major macroeconomic goal of the United States:

The "official"unemployment rate may understate the extent to which labor resources are underutilized because:

The price index number for Year 5 is 120.0. In Year 6, it increased to 150.0. Between Year 5 and Year 6, prices increased by:

Mike made $28,000 in 2001. He did not receive a raise in 2002, so his income remained at $28,000. Between 2001 and 2002, inflation was 2.2 %. Which of the following statements is True?

The _____________ rate of unemployment occurs when the unemployment rate includes only frictional and structural unemployment.

The overall unemployment rate:

The price index that measures price changes for the entire economy, regardless of whether the goods and services measured are purchased by households, businesses, or government units is the:

Productive activities that are not reported for tax purposes and are not included in GDP are part of the _______________ ______________.

When prices increase, real income:

-If year 3 is the base year:

Introduction to Economics

Economic Decision Making and Economic Systems

Demand, Supply, and the Determination of Price

Foundations of the Macroeconomy

The Role of Government in the Macroeconomy

Money, Financial Institutions, and the Federal Reserve

Money Creation, Monetary Theory, and Monetary Policy

Macroeconomic Viewpoints and Models

Households and Businesses: An Overview

Benefits, Costs, and Maximization

Production and the Costs of Production

Competition and Market Structures

Government and the Markets

Labor Markets, Unions, and the Distribution of Income-A

International Trade

International Finance

Filters

Productive activities that are not reported for tax purposes and are not included in GDP are part of the _ .