Question 1

The real interest rate can be negative.​

Accepted Answer

A) True 
 B)False  True

Question 2

Which type of unemployment is most likely to help an economy become more efficient?​

Accepted Answer

A) Cyclical unemployment 
B) Voluntary unemployment​ 
C) Seasonal unemployment​ 
D) Frictional unemployment​ 
E) Underemployment​ 
A) Cyclical unemployment 
B) Voluntary unemployment​ 
C) Seasonal unemployment​ 
D) Frictional unemployment​ 
E) Underemployment​ D

Question 3

If the expected inflation rate is 4 percent and the nominal interest rate is 9 percent,the expected real interest rate is _____.​

Accepted Answer

A) 13 percent 
B) −5 percent 
C) 9 percent 
D) −13 percent 
E) 5 percent 
A) 13 percent 
B) −5 percent 
C) 9 percent 
D) −13 percent 
E) 5 percent E

Question 4

The nominal interest rate:​

Accepted Answer

A) varies directly with the rate of expected inflation in an economy. 
B) is the interest rate expressed in dollars of constant purchasing power. 
C) equals the difference between the real interest rate and the inflation rate. 
D) is the basis for decisions taken by the lenders and the borrowers in an economy. 
E) is the percentage increase in the average price level from one year to the next. 
A) varies directly with the rate of expected inflation in an economy. 
B) is the interest rate expressed in dollars of constant purchasing power. 
C) equals the difference between the real interest rate and the inflation rate. 
D) is the basis for decisions taken by the lenders and the borrowers in an economy. 
E) is the percentage increase in the average price level from one year to the next.

Question 5

Suppose the price levels in an economy in four successive years are 100,120,133,and 140.Which of the following is true in such a case?​

Accepted Answer

A) The economy is experiencing hyperinflation. 
B) The economy is experiencing deflation. 
C) The economy is experiencing inflation. 
D) The economy is experiencing increasing inflation. 
E) The economy is experiencing disinflation. 
A) The economy is experiencing hyperinflation. 
B) The economy is experiencing deflation. 
C) The economy is experiencing inflation. 
D) The economy is experiencing increasing inflation. 
E) The economy is experiencing disinflation.

Question 6

The inflation experienced in the United States during the late 1960s as a result of the spending on the Vietnam War is an example of:​

Accepted Answer

A) hyperinflation. 
B) demand-pull inflation. 
C) disinflation. 
D) cost-push inflation. 
E) cyclical inflation. 
A) hyperinflation. 
B) demand-pull inflation. 
C) disinflation. 
D) cost-push inflation. 
E) cyclical inflation.

Question 7

Tony lent Dave $1,000 for one year with the understanding that Dave would repay $1,070.If the actual inflation rate was 7 percent,then the real rate of interest Tony received is _____.​

Accepted Answer

A) 14 percent 
B) 7 percent​ 
C) 4 percent​ 
D) 0 percent​ 
E) −7 percent​ 
A) 14 percent 
B) 7 percent​ 
C) 4 percent​ 
D) 0 percent​ 
E) −7 percent​

Question 8

The type of unemployment most likely to be experienced by a touring professional golfer is:​

Accepted Answer

A) frictional unemployment. 
B) structural unemployment. 
C) seasonal unemployment. 
D) cyclical unemployment. 
E) discouraged-worker unemployment. 
A) frictional unemployment. 
B) structural unemployment. 
C) seasonal unemployment. 
D) cyclical unemployment. 
E) discouraged-worker unemployment.

Question 9

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 10

A decrease in the interest rate,other things constant,will:​

Accepted Answer

A) shift the demand for loanable funds curve to the right. 
B) shift the demand for loanable funds curve to the left. 
C) increase the quantity of loanable funds demanded. 
D) increase the quantity of loanable funds supplied. 
E) shift the supply of loanable funds curve to the right. 
A) shift the demand for loanable funds curve to the right. 
B) shift the demand for loanable funds curve to the left. 
C) increase the quantity of loanable funds demanded. 
D) increase the quantity of loanable funds supplied. 
E) shift the supply of loanable funds curve to the right.

Question 11

An increase in the interest rate will increase the demand for loanable funds.​

Accepted Answer

A) True 
 B)False

Question 12

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 13

In the market for loanable funds,the equilibrium interest rate is determined by the intersection of:​

Accepted Answer

A) the downward-sloping supply curve for loanable funds and the upward-sloping demand curve for loanable funds. 
B) the upward-sloping supply curve for loanable funds and the downward-sloping demand curve for loanable funds. 
C) the downward-sloping supply curve of loanable funds and the horizontal demand curve for loanable funds. 
D) the downward-sloping supply curve of loanable funds and the vertical demand curve for loanable funds. 
E) the upward-sloping supply curve for loanable funds and the horizontal demand curve for loanable funds. 
A) the downward-sloping supply curve for loanable funds and the upward-sloping demand curve for loanable funds. 
B) the upward-sloping supply curve for loanable funds and the downward-sloping demand curve for loanable funds. 
C) the downward-sloping supply curve of loanable funds and the horizontal demand curve for loanable funds. 
D) the downward-sloping supply curve of loanable funds and the vertical demand curve for loanable funds. 
E) the upward-sloping supply curve for loanable funds and the horizontal demand curve for loanable funds.

Question 14

The consumer price index measures:​

Accepted Answer

A) the cost of all goods and services produced in the U.S.economy. 
B) the average change over time in the selling prices received by domestic producers for their output. 
C) the cost of a fixed market basket of consumer goods and services produced in the U.S.economy. 
D) the ratio of an economy's nominal GDP to its real GDP. 
E) the income distribution of an economy. 
A) the cost of all goods and services produced in the U.S.economy. 
B) the average change over time in the selling prices received by domestic producers for their output. 
C) the cost of a fixed market basket of consumer goods and services produced in the U.S.economy. 
D) the ratio of an economy's nominal GDP to its real GDP. 
E) the income distribution of an economy.

Question 15

A worker would be hurt least by inflation when the:​

Accepted Answer

A) worker anticipates inflation and increases savings at the bank. 
B) worker is protected by a cost-of-living adjustment clause in an employment contract. 
C) the price level increases but at a decreasing rate. 
D) worker is protected by fixed annual increases in wages and benefits in an employment contract. 
E) government increases the level of social security retirement benefits to correct for the effects of unanticipated inflation. 
A) worker anticipates inflation and increases savings at the bank. 
B) worker is protected by a cost-of-living adjustment clause in an employment contract. 
C) the price level increases but at a decreasing rate. 
D) worker is protected by fixed annual increases in wages and benefits in an employment contract. 
E) government increases the level of social security retirement benefits to correct for the effects of unanticipated inflation.

Question 16

The unemployment rate does not reflect the true extent of the unemployment problem.Which of the following groups is not counted as unemployed in the official unemployment statistics?​

Accepted Answer

A) The underemployed and the cyclically unemployed 
B) The underemployed and discouraged workers​ 
C) Discouraged workers and the frictionally unemployed​ 
D) The frictionally unemployed and the structurally unemployed​ 
E) The cyclically unemployed and the frictionally unemployed​ 
A) The underemployed and the cyclically unemployed 
B) The underemployed and discouraged workers​ 
C) Discouraged workers and the frictionally unemployed​ 
D) The frictionally unemployed and the structurally unemployed​ 
E) The cyclically unemployed and the frictionally unemployed​

Question 17

Since 1980,_____ has experienced deflation.​

Accepted Answer

A) the U.S. 
B) France​ 
C) Germany​ 
D) Japan​ 
E) Italy​ 
A) the U.S. 
B) France​ 
C) Germany​ 
D) Japan​ 
E) Italy​

Question 18

Hyperinflation refers to a period of extremely erratic inflation rates.​

Accepted Answer

A) True 
 B)False

Question 19

Government fiscal policies that attempt to stimulate aggregate demand are often aimed at reducing cyclical unemployment.​

Accepted Answer

A) True 
 B)False

Question 20

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

The real interest rate can be negative.

Which type of unemployment is most likely to help an economy become more efficient?

If the expected inflation rate is 4 percent and the nominal interest rate is 9 percent,the expected real interest rate is _____.

The nominal interest rate:

Suppose the price levels in an economy in four successive years are 100,120,133,and 140.Which of the following is true in such a case?

The inflation experienced in the United States during the late 1960s as a result of the spending on the Vietnam War is an example of:

Tony lent Dave $1,000 for one year with the understanding that Dave would repay $1,070.If the actual inflation rate was 7 percent,then the real rate of interest Tony received is _____.

The type of unemployment most likely to be experienced by a touring professional golfer is:

Which of the following people would be counted as employed?

A decrease in the interest rate,other things constant,will:

An increase in the interest rate will increase the demand for loanable funds.

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

In the market for loanable funds,the equilibrium interest rate is determined by the intersection of:

The consumer price index measures:

A worker would be hurt least by inflation when the:

The unemployment rate does not reflect the true extent of the unemployment problem.Which of the following groups is not counted as unemployed in the official unemployment statistics?

Since 1980,_____ has experienced deflation.

Hyperinflation refers to a period of extremely erratic inflation rates.

Government fiscal policies that attempt to stimulate aggregate demand are often aimed at reducing cyclical unemployment.

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

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

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

Macro Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 7: Unemployment and Inflation

The real interest rate can be negative.​

Which type of unemployment is most likely to help an economy become more efficient?​

If the expected inflation rate is 4 percent and the nominal interest rate is 9 percent,the expected real interest rate is _____.​

The nominal interest rate:​

Suppose the price levels in an economy in four successive years are 100,120,133,and 140.Which of the following is true in such a case?​

The inflation experienced in the United States during the late 1960s as a result of the spending on the Vietnam War is an example of:​

Tony lent Dave $1,000 for one year with the understanding that Dave would repay $1,070.If the actual inflation rate was 7 percent,then the real rate of interest Tony received is _____.​

The type of unemployment most likely to be experienced by a touring professional golfer is:​

Which of the following people would be counted as employed?​

A decrease in the interest rate,other things constant,will:​

An increase in the interest rate will increase the demand for loanable funds.​

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

In the market for loanable funds,the equilibrium interest rate is determined by the intersection of:​

The consumer price index measures:​

A worker would be hurt least by inflation when the:​

The unemployment rate does not reflect the true extent of the unemployment problem.Which of the following groups is not counted as unemployed in the official unemployment statistics?​

Since 1980,_____ has experienced deflation.​

Hyperinflation refers to a period of extremely erratic inflation rates.​

Government fiscal policies that attempt to stimulate aggregate demand are often aimed at reducing cyclical unemployment.​

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

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

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

Macro Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

The real interest rate can be negative.

Which type of unemployment is most likely to help an economy become more efficient?

If the expected inflation rate is 4 percent and the nominal interest rate is 9 percent,the expected real interest rate is _____.

The nominal interest rate:

Suppose the price levels in an economy in four successive years are 100,120,133,and 140.Which of the following is true in such a case?

The inflation experienced in the United States during the late 1960s as a result of the spending on the Vietnam War is an example of:

Tony lent Dave $1,000 for one year with the understanding that Dave would repay $1,070.If the actual inflation rate was 7 percent,then the real rate of interest Tony received is _____.

The type of unemployment most likely to be experienced by a touring professional golfer is:

Which of the following people would be counted as employed?

A decrease in the interest rate,other things constant,will:

An increase in the interest rate will increase the demand for loanable funds.

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

In the market for loanable funds,the equilibrium interest rate is determined by the intersection of:

The consumer price index measures:

A worker would be hurt least by inflation when the:

The unemployment rate does not reflect the true extent of the unemployment problem.Which of the following groups is not counted as unemployed in the official unemployment statistics?

Since 1980,_____ has experienced deflation.

Hyperinflation refers to a period of extremely erratic inflation rates.

Government fiscal policies that attempt to stimulate aggregate demand are often aimed at reducing cyclical unemployment.

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