Question 1

The "key ingredient" in ending a hyperinflation is to

Accepted Answer

A) allow the money supply to grow more rapidly. 
B) reduce the enormous budget deficit. 
C) require wage contracts to be indexed more frequently. 
D) devalue the nation's currency in the foreign exchange market. 
A) allow the money supply to grow more rapidly. 
B) reduce the enormous budget deficit. 
C) require wage contracts to be indexed more frequently. 
D) devalue the nation's currency in the foreign exchange market. B

Question 2

The "expected real" interest rate is the

Accepted Answer

A) rate actually quoted in financial markets. 
B) rate actually quoted in financial markets minus the expected inflation rate. 
C) rate actually quoted in financial markets plus the expected inflation rate. 
D) rate actually quoted in financial markets divided by the expected inflation rate. 
A) rate actually quoted in financial markets. 
B) rate actually quoted in financial markets minus the expected inflation rate. 
C) rate actually quoted in financial markets plus the expected inflation rate. 
D) rate actually quoted in financial markets divided by the expected inflation rate. B

Question 3

The payment of unemployment compensation tends to induce business firms to

Accepted Answer

A) lay off workers as opposed to lowering sales. 
B) search for new workers for shorter periods of time. 
C) lay off workers as opposed to increasing inventories and/or reducing hours worked for all employees. 
D) recall previously laid off workers more rapidly. 
A) lay off workers as opposed to lowering sales. 
B) search for new workers for shorter periods of time. 
C) lay off workers as opposed to increasing inventories and/or reducing hours worked for all employees. 
D) recall previously laid off workers more rapidly. C

Question 4

Mismatch and turnover unemployment,while conceptually easy to distinguish,are often difficult to identify.Ceteris paribus,a person out of work for six months or an extended period would be classified by Gordon as

Accepted Answer

A) experiencing turnover unemployment. 
B) experiencing mismatch unemployment. 
C) impossible to distinguish the type. 
D) first frictionally unemployed (the first month)and then structurally unemployed. 
A) experiencing turnover unemployment. 
B) experiencing mismatch unemployment. 
C) impossible to distinguish the type. 
D) first frictionally unemployed (the first month)and then structurally unemployed.

Question 5

In the 1980s,the federal government gradually ________ interest-rate ceiling on deposits at commercial banks and thrift institutions,which has ________ the costs of inflation.

Accepted Answer

A) imposed,lowered 
B) imposed,reduced 
C) lifted,lowered 
D) lifted,reduced 
A) imposed,lowered 
B) imposed,reduced 
C) lifted,lowered 
D) lifted,reduced

Question 6

The "quantity equation" states that nominal GDP is equal by the definition of velocity to the money supply ________ velocity.

Accepted Answer

A) plus 
B) minus 
C) multiplied by 
D) divided by 
A) plus 
B) minus 
C) multiplied by 
D) divided by

Question 7

The U.S.macroeconomic experience of the early to mid-1980s is an example of how

Accepted Answer

A) reducing inflation comes at the cost of a permanent reduction in real GDP. 
B) reducing inflation comes at the cost of a temporary reduction in real GDP. 
C) reducing inflation can be done costless by simply increasing the money growth rate. 
D) increasing the money growth rate affects inflation alone,and not real GDP. 
A) reducing inflation comes at the cost of a permanent reduction in real GDP. 
B) reducing inflation comes at the cost of a temporary reduction in real GDP. 
C) reducing inflation can be done costless by simply increasing the money growth rate. 
D) increasing the money growth rate affects inflation alone,and not real GDP.

Question 8

Government deficit financing is made easier by a rise in inflation when inflation ________ the private sector's demand for high-powered money,which the government can ________.

Accepted Answer

A) lowers,create and spend 
B) lowers,obtain through taxation 
C) raises,create and spend 
D) raises,obtain through taxation 
A) lowers,create and spend 
B) lowers,obtain through taxation 
C) raises,create and spend 
D) raises,obtain through taxation

Question 9

Mismatch and turnover unemployment,while conceptually easy to distinguish,are often difficult to identify.Ceteris paribus,a person out of work for two months would be classified by Gordon as

Accepted Answer

A) experiencing turnover unemployment. 
B) experiencing mismatch unemployment. 
C) impossible to distinguish the type. 
D) first frictionally unemployed (the first month)and then structurally unemployed. 
A) experiencing turnover unemployment. 
B) experiencing mismatch unemployment. 
C) impossible to distinguish the type. 
D) first frictionally unemployed (the first month)and then structurally unemployed.

Question 10

"Disgruntled" workers who quit their jobs to find "a more reasonable boss" are experiencing

Accepted Answer

A) involuntarily unemployment. 
B) mismatch unemployment. 
C) cyclically unemployment. 
D) turnover unemployment. 
A) involuntarily unemployment. 
B) mismatch unemployment. 
C) cyclically unemployment. 
D) turnover unemployment.

Question 11

We have drawn the SAS and SP curves as straight lines for convenience.More realistically,rising output ________ the structural unemployment problem and the effect of this on wages causes those curves to ________ in slope.

Accepted Answer

A) aggravates,increase 
B) aggravates,decrease 
C) alleviates,increase 
D) alleviates,decrease 
A) aggravates,increase 
B) aggravates,decrease 
C) alleviates,increase 
D) alleviates,decrease

Question 12

The costs of inflation depend upon

Accepted Answer

A) whether it is anticipated or unanticipated. 
B) who pays it and who receives it. 
C) the future savings rate. 
D) none of the above. 
A) whether it is anticipated or unanticipated. 
B) who pays it and who receives it. 
C) the future savings rate. 
D) none of the above.

Question 13

Suppose the U.S.public holds $1 trillion in government bonds,all with an 8 percent nominal interest rate.If the Federal Reserve can hold that nominal rate constant,what inflation rate would make the government's net interest expense exactly zero?

Accepted Answer

A) 16 percent 
B) 8 percent 
C) 0 percent 
D) -8 percent 
A) 16 percent 
B) 8 percent 
C) 0 percent 
D) -8 percent

Question 14

With regional specialization,a nation is bound to suffer some mismatch unemployment.For example,in the early 1990s the highest regional unemployment rate was in

Accepted Answer

A) California. 
B) the South. 
C) the Midwest. 
D) none of the above because the unemployment rate as essentially equal in all regions. 
A) California. 
B) the South. 
C) the Midwest. 
D) none of the above because the unemployment rate as essentially equal in all regions.

Question 15

Unanticipated inflation will hurt ________ and help ________.

Accepted Answer

A) pensioners;borrowers 
B) borrowers;pensioners 
C) the government;tax payers 
D) homeowners;banks 
A) pensioners;borrowers 
B) borrowers;pensioners 
C) the government;tax payers 
D) homeowners;banks

Question 16

Job search theory regards ________ unemployment as a socially valuable,productive investment undertaken by the job searcher.

Accepted Answer

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

Question 17

In the United States,the long-run inflation rate can be expressed simply as the growth rate of money

Accepted Answer

A) plus the long-run growth rate of velocity. 
B) minus the long-run growth rate of velocity. 
C) plus the long-run growth rate of real GDP. 
D) minus the long-run growth rate of real GDP. 
A) plus the long-run growth rate of velocity. 
B) minus the long-run growth rate of velocity. 
C) plus the long-run growth rate of real GDP. 
D) minus the long-run growth rate of real GDP.

Question 18

Suppose that the number of jobs for engineers expands by 10 percent per year,the number of new engineers by 5 percent per year while the number of automobile mechanics grows by 8 percent and the number of new automobile mechanics jobs grows by 3 percent.We conclude that

Accepted Answer

A) frictional unemployment will increase. 
B) frictional unemployment will decrease. 
C) structural unemployment will increase. 
D) structural unemployment will increase 4 times. 
A) frictional unemployment will increase. 
B) frictional unemployment will decrease. 
C) structural unemployment will increase. 
D) structural unemployment will increase 4 times.

Question 19

Unemployment due to the normal processes of quitting and searching for jobs is called ________ unemployment.

Accepted Answer

A) turnover 
B) mismatch 
C) cyclical 
D) natural 
A) turnover 
B) mismatch 
C) cyclical 
D) natural

Question 20

In the early 1980s the government's primary method of combating inflation was

Accepted Answer

A) price and wage controls. 
B) undoing the "self-inflicted" wounds. 
C) restrictive monetary policy. 
D) indexing bonds to protect savers. 
A) price and wage controls. 
B) undoing the "self-inflicted" wounds. 
C) restrictive monetary policy. 
D) indexing bonds to protect savers.

The "key ingredient" in ending a hyperinflation is to

The "expected real" interest rate is the

The payment of unemployment compensation tends to induce business firms to

Mismatch and turnover unemployment,while conceptually easy to distinguish,are often difficult to identify.Ceteris paribus,a person out of work for six months or an extended period would be classified by Gordon as

In the 1980s,the federal government gradually interest-rate ceiling on deposits at commercial banks and thrift institutions,which has the costs of inflation.

The "quantity equation" states that nominal GDP is equal by the definition of velocity to the money supply ________ velocity.

The U.S.macroeconomic experience of the early to mid-1980s is an example of how

Government deficit financing is made easier by a rise in inflation when inflation the private sector's demand for high-powered money,which the government can .

Mismatch and turnover unemployment,while conceptually easy to distinguish,are often difficult to identify.Ceteris paribus,a person out of work for two months would be classified by Gordon as

"Disgruntled" workers who quit their jobs to find "a more reasonable boss" are experiencing

We have drawn the SAS and SP curves as straight lines for convenience.More realistically,rising output the structural unemployment problem and the effect of this on wages causes those curves to in slope.

The costs of inflation depend upon

Suppose the U.S.public holds $1 trillion in government bonds,all with an 8 percent nominal interest rate.If the Federal Reserve can hold that nominal rate constant,what inflation rate would make the government's net interest expense exactly zero?

With regional specialization,a nation is bound to suffer some mismatch unemployment.For example,in the early 1990s the highest regional unemployment rate was in

Unanticipated inflation will hurt and help .

Job search theory regards ________ unemployment as a socially valuable,productive investment undertaken by the job searcher.

In the United States,the long-run inflation rate can be expressed simply as the growth rate of money

Suppose that the number of jobs for engineers expands by 10 percent per year,the number of new engineers by 5 percent per year while the number of automobile mechanics grows by 8 percent and the number of new automobile mechanics jobs grows by 3 percent.We conclude that

Unemployment due to the normal processes of quitting and searching for jobs is called ________ unemployment.

In the early 1980s the government's primary method of combating inflation was

What Is Macroeconomics

The Measurement of Income,prices,and Unemployment

Income and Interest Rates: the Keynesian Cross Model and the Is Curve

Strong and Weak Policy Effects in the Is-Lm Model

Financial Markets, financial Regulation, and Economic Instability

The Government Budget, the Government Debt, and the Limitations of Fiscal Policy

International Trade, exchange Rates, and Macroeconomic Policy

Aggregate Demand, aggregate Supply, and the Great Depression

Inflation: Its Causes and Cures

The Theory of Economic Growth

The Big Questions of Economic Growth

Money,banks,and the Federal Reserve

The Goals, tools, and Rules of Monetary Policy

The Economics of Consumption Behavior

The Economics of Investment Behavior

New Classical Macro and New Keynesian Macro

Conclusion: Where We Stand

Filters

Exam 10: The Goals of Stabilization Policy: Low Inflation and Low Unemployment

The "key ingredient" in ending a hyperinflation is to

The "expected real" interest rate is the

The payment of unemployment compensation tends to induce business firms to

Mismatch and turnover unemployment,while conceptually easy to distinguish,are often difficult to identify.Ceteris paribus,a person out of work for six months or an extended period would be classified by Gordon as

In the 1980s,the federal government gradually ________ interest-rate ceiling on deposits at commercial banks and thrift institutions,which has ________ the costs of inflation.

The "quantity equation" states that nominal GDP is equal by the definition of velocity to the money supply ________ velocity.

The U.S.macroeconomic experience of the early to mid-1980s is an example of how

Government deficit financing is made easier by a rise in inflation when inflation ________ the private sector's demand for high-powered money,which the government can ________.

Mismatch and turnover unemployment,while conceptually easy to distinguish,are often difficult to identify.Ceteris paribus,a person out of work for two months would be classified by Gordon as

"Disgruntled" workers who quit their jobs to find "a more reasonable boss" are experiencing

We have drawn the SAS and SP curves as straight lines for convenience.More realistically,rising output ________ the structural unemployment problem and the effect of this on wages causes those curves to ________ in slope.

The costs of inflation depend upon

Suppose the U.S.public holds $1 trillion in government bonds,all with an 8 percent nominal interest rate.If the Federal Reserve can hold that nominal rate constant,what inflation rate would make the government's net interest expense exactly zero?

With regional specialization,a nation is bound to suffer some mismatch unemployment.For example,in the early 1990s the highest regional unemployment rate was in

Unanticipated inflation will hurt ________ and help ________.

Job search theory regards ________ unemployment as a socially valuable,productive investment undertaken by the job searcher.

In the United States,the long-run inflation rate can be expressed simply as the growth rate of money

Suppose that the number of jobs for engineers expands by 10 percent per year,the number of new engineers by 5 percent per year while the number of automobile mechanics grows by 8 percent and the number of new automobile mechanics jobs grows by 3 percent.We conclude that

Unemployment due to the normal processes of quitting and searching for jobs is called ________ unemployment.

In the early 1980s the government's primary method of combating inflation was

What Is Macroeconomics

The Measurement of Income,prices,and Unemployment

Income and Interest Rates: the Keynesian Cross Model and the Is Curve

Strong and Weak Policy Effects in the Is-Lm Model

Financial Markets, financial Regulation, and Economic Instability

The Government Budget, the Government Debt, and the Limitations of Fiscal Policy

International Trade, exchange Rates, and Macroeconomic Policy

Aggregate Demand, aggregate Supply, and the Great Depression

Inflation: Its Causes and Cures

The Theory of Economic Growth

The Big Questions of Economic Growth

Money,banks,and the Federal Reserve

The Goals, tools, and Rules of Monetary Policy

The Economics of Consumption Behavior

The Economics of Investment Behavior

New Classical Macro and New Keynesian Macro

Conclusion: Where We Stand

Filters

In the 1980s,the federal government gradually interest-rate ceiling on deposits at commercial banks and thrift institutions,which has the costs of inflation.

Government deficit financing is made easier by a rise in inflation when inflation the private sector's demand for high-powered money,which the government can .

We have drawn the SAS and SP curves as straight lines for convenience.More realistically,rising output the structural unemployment problem and the effect of this on wages causes those curves to in slope.

Unanticipated inflation will hurt and help .