Question 1

Which of the following is NOT one of the "unholy trinity" of events that interact to fuel an explosive hyperinflation?

Accepted Answer

A) supply shocks 
B) monetary accommodation 
C) exchange rate appreciation 
D) frequent wage indexation 
A) supply shocks 
B) monetary accommodation 
C) exchange rate appreciation 
D) frequent wage indexation

Question 2

A major difference between the costs of unemployment and the costs of inflation is that

Accepted Answer

A) the former is structural the latter frictional. 
B) the government pays the latter,the population pays the former. 
C) unemployment costs are concentrated among a few people,while inflation costs are distributed more broadly across the entire population. 
D) unemployment costs are distributed among people,while inflation costs are distributed more narrowly across the entire population. 
A) the former is structural the latter frictional. 
B) the government pays the latter,the population pays the former. 
C) unemployment costs are concentrated among a few people,while inflation costs are distributed more broadly across the entire population. 
D) unemployment costs are distributed among people,while inflation costs are distributed more narrowly across the entire population.

Question 3

The costs imposed by inflation should be lessened in the future because of the following reform that took place during the early 1980s

Accepted Answer

A) airline deregulation. 
B) issuance of indexed government bonds. 
C) changing tax laws to ensure that savers are taxed only on real,rather than nominal capital gains. 
D) lifting of limits on interest paid on checking and savings accounts. 
A) airline deregulation. 
B) issuance of indexed government bonds. 
C) changing tax laws to ensure that savers are taxed only on real,rather than nominal capital gains. 
D) lifting of limits on interest paid on checking and savings accounts.

Question 4

Real income is redistributed from ________ in the case of ________ inflation.

Accepted Answer

A) creditors to debtors,anticipated 
B) creditors to debtors,unanticipated 
C) debtors to creditors,anticipated 
D) debtors to creditors,unanticipated 
A) creditors to debtors,anticipated 
B) creditors to debtors,unanticipated 
C) debtors to creditors,anticipated 
D) debtors to creditors,unanticipated

Question 5

The turnover view of unemployment stresses that

Accepted Answer

A) most job vacancies have skill requirements not possessed by the unemployed. 
B) many job vacancies are located in different areas of the country than are the unemployed. 
C) there exist incentives for workers to refuse to accept jobs. 
D) there exists racial/and or sex discrimination against some workers. 
A) most job vacancies have skill requirements not possessed by the unemployed. 
B) many job vacancies are located in different areas of the country than are the unemployed. 
C) there exist incentives for workers to refuse to accept jobs. 
D) there exists racial/and or sex discrimination against some workers.

Question 6

The "shoe-leather" cost of a fully anticipated inflation is

Accepted Answer

A) the inconvenience of holding less cash. 
B) the higher prices of imported raw materials due to currency depreciation. 
C) the extra time spent on shopping in order to beat price increases. 
D) the effort of changing posted prices on price tags and producing new price lists and catalogs. 
A) the inconvenience of holding less cash. 
B) the higher prices of imported raw materials due to currency depreciation. 
C) the extra time spent on shopping in order to beat price increases. 
D) the effort of changing posted prices on price tags and producing new price lists and catalogs.

Question 7

In the quantity equation framework for understanding the determinants of long-run inflation,a drop in consumer confidence ________ velocity,putting ________ pressure on inflation.

Accepted Answer

A) raises,upward 
B) raises,downward 
C) lowers,upward 
D) lowers,downward 
A) raises,upward 
B) raises,downward 
C) lowers,upward 
D) lowers,downward

Question 8

An increase in the amount and time period for which unemployment compensation is paid will most likely

Accepted Answer

A) increase the structural rate of unemployment. 
B) leave the natural rate of unemployment unchanged. 
C) decrease the natural rate of unemployment. 
D) increase turnover unemployment. 
A) increase the structural rate of unemployment. 
B) leave the natural rate of unemployment unchanged. 
C) decrease the natural rate of unemployment. 
D) increase turnover unemployment.

Question 9

"Natural unemployment" includes those out of work because of

Accepted Answer

A) expected or normal turnover which will always characterize a part of the labor force. 
B) structural unemployment caused by normal technological change in production. 
C) a recession. 
D) A and B. 
A) expected or normal turnover which will always characterize a part of the labor force. 
B) structural unemployment caused by normal technological change in production. 
C) a recession. 
D) A and B.

Question 10

If a worker receives 6 percent higher nominal wages over a year in which inflation is 2 percent,the worker's real wages have

Accepted Answer

A) risen by 8 percent. 
B) risen by 4 percent. 
C) risen by 3 percent. 
D) fallen by 3 percent. 
E) fallen by 4 percent. 
A) risen by 8 percent. 
B) risen by 4 percent. 
C) risen by 3 percent. 
D) fallen by 3 percent. 
E) fallen by 4 percent.

Question 11

Unemployment that results when individuals who have voluntarily quite their jobs are seeking jobs is called

Accepted Answer

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

Question 12

Unemployment due to the location or skill requirements of job vacancies not matching the location or skills of the unemployed is called ________ unemployment.

Accepted Answer

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

Question 13

Periods of low or negative inflation are generally ________ to farmers,who are ________ as a group.

Accepted Answer

A) advantageous,creditors 
B) advantageous,debtors 
C) harmful,creditors 
D) harmful,debtors 
A) advantageous,creditors 
B) advantageous,debtors 
C) harmful,creditors 
D) harmful,debtors

Question 14

The expected real interest rate is equal to

Accepted Answer

A) the nominal interest rate minus the expected rate of inflation. 
B) the nominal interest rate plus the expected rate of inflation. 
C) the nominal interest rate minus the actual rate of inflation. 
D) the nominal interest rate plus the actual rate of inflation. 
A) the nominal interest rate minus the expected rate of inflation. 
B) the nominal interest rate plus the expected rate of inflation. 
C) the nominal interest rate minus the actual rate of inflation. 
D) the nominal interest rate plus the actual rate of inflation.

Question 15

Suppose there is a shortage of computer programmers,but firms refuse to hire unemployed typists and train them.This is one reason for ________ unemployment.

Accepted Answer

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

Question 16

The actual real interest rate and the expected real interest rate will be identical if

Accepted Answer

A) pe = p. B) pe > p. C) pe < p. D) none of the above A) pe = p. B) pe > p. C) pe < p. D) none of the above

Question 17

Government deficit financing is made easier by a p-percentage-point rise in inflation if it raises the nominal interest rate by ________ than p percentage points,and the private sector wishes to hold ________ quantity of real government bonds.

Accepted Answer

A) less,a lower 
B) less,the same 
C) more,a lower 
D) more,the same 
A) less,a lower 
B) less,the same 
C) more,a lower 
D) more,the same

Question 18

Applying elementary economics,mismatch unemployment should fall when relative wages

Accepted Answer

A) rise. 
B) fall. 
C) are more flexible. 
D) are less flexible. 
A) rise. 
B) fall. 
C) are more flexible. 
D) are less flexible.

Question 19

When Okun's "misery index" is used to judge macroeconomic conditions,inflation is being considered

Accepted Answer

A) not to be a macroeconomic problem at all. 
B) a less serious macroeconomic problem than unemployment. 
C) just as serious a macroeconomic problem as unemployment. 
D) a more serious macroeconomic problem than unemployment. 
A) not to be a macroeconomic problem at all. 
B) a less serious macroeconomic problem than unemployment. 
C) just as serious a macroeconomic problem as unemployment. 
D) a more serious macroeconomic problem than unemployment.

Question 20

The classic loser from an unanticipated inflation is

Accepted Answer

A) the borrower who pays less nominal interest than expected. 
B) the borrower who pays more nominal interest than expected. 
C) the saver who earns less real interest than expected. 
D) the saver who earns more real interest than expected,and so should have saved more. 
A) the borrower who pays less nominal interest than expected. 
B) the borrower who pays more nominal interest than expected. 
C) the saver who earns less real interest than expected. 
D) the saver who earns more real interest than expected,and so should have saved more.

Which of the following is NOT one of the "unholy trinity" of events that interact to fuel an explosive hyperinflation?

A major difference between the costs of unemployment and the costs of inflation is that

The costs imposed by inflation should be lessened in the future because of the following reform that took place during the early 1980s

Real income is redistributed from in the case of inflation.

The turnover view of unemployment stresses that

The "shoe-leather" cost of a fully anticipated inflation is

In the quantity equation framework for understanding the determinants of long-run inflation,a drop in consumer confidence velocity,putting pressure on inflation.

An increase in the amount and time period for which unemployment compensation is paid will most likely

"Natural unemployment" includes those out of work because of

If a worker receives 6 percent higher nominal wages over a year in which inflation is 2 percent,the worker's real wages have

Unemployment that results when individuals who have voluntarily quite their jobs are seeking jobs is called

Unemployment due to the location or skill requirements of job vacancies not matching the location or skills of the unemployed is called ________ unemployment.

Periods of low or negative inflation are generally to farmers,who are as a group.

The expected real interest rate is equal to

Suppose there is a shortage of computer programmers,but firms refuse to hire unemployed typists and train them.This is one reason for ________ unemployment.

The actual real interest rate and the expected real interest rate will be identical if

Government deficit financing is made easier by a p-percentage-point rise in inflation if it raises the nominal interest rate by than p percentage points,and the private sector wishes to hold quantity of real government bonds.

Applying elementary economics,mismatch unemployment should fall when relative wages

When Okun's "misery index" is used to judge macroeconomic conditions,inflation is being considered

The classic loser from an unanticipated inflation is

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

Which of the following is NOT one of the "unholy trinity" of events that interact to fuel an explosive hyperinflation?

A major difference between the costs of unemployment and the costs of inflation is that

The costs imposed by inflation should be lessened in the future because of the following reform that took place during the early 1980s

Real income is redistributed from ________ in the case of ________ inflation.

The turnover view of unemployment stresses that

The "shoe-leather" cost of a fully anticipated inflation is

In the quantity equation framework for understanding the determinants of long-run inflation,a drop in consumer confidence ________ velocity,putting ________ pressure on inflation.

An increase in the amount and time period for which unemployment compensation is paid will most likely

"Natural unemployment" includes those out of work because of

If a worker receives 6 percent higher nominal wages over a year in which inflation is 2 percent,the worker's real wages have

Unemployment that results when individuals who have voluntarily quite their jobs are seeking jobs is called

Unemployment due to the location or skill requirements of job vacancies not matching the location or skills of the unemployed is called ________ unemployment.

Periods of low or negative inflation are generally ________ to farmers,who are ________ as a group.

The expected real interest rate is equal to

Suppose there is a shortage of computer programmers,but firms refuse to hire unemployed typists and train them.This is one reason for ________ unemployment.

The actual real interest rate and the expected real interest rate will be identical if

Government deficit financing is made easier by a p-percentage-point rise in inflation if it raises the nominal interest rate by ________ than p percentage points,and the private sector wishes to hold ________ quantity of real government bonds.

Applying elementary economics,mismatch unemployment should fall when relative wages

When Okun's "misery index" is used to judge macroeconomic conditions,inflation is being considered

The classic loser from an unanticipated inflation is

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

Real income is redistributed from in the case of inflation.

In the quantity equation framework for understanding the determinants of long-run inflation,a drop in consumer confidence velocity,putting pressure on inflation.

Periods of low or negative inflation are generally to farmers,who are as a group.

Government deficit financing is made easier by a p-percentage-point rise in inflation if it raises the nominal interest rate by than p percentage points,and the private sector wishes to hold quantity of real government bonds.