Question 1

Joel just graduated from college and is looking for a job. Economists would classify Joel as

Accepted Answer

A) cyclically unemployed 
B) structurally unemployed 
C) seasonally unemployed 
D) frictionally unemployed 
E) out of the labor force 
A) cyclically unemployed 
B) structurally unemployed 
C) seasonally unemployed 
D) frictionally unemployed 
E) out of the labor force

Question 2

The misery index is the sum of the unemployment rate and the inflation rate.

Accepted Answer

A) True 
 B)False

Question 3

A decrease in a person's real wage necessarily means

Accepted Answer

A) lower purchasing power 
B) a lower nominal wage 
C) a lower nominal wage after payment of taxes 
D) a higher nominal wage 
E) a higher nominal wage after payment of taxes 
A) lower purchasing power 
B) a lower nominal wage 
C) a lower nominal wage after payment of taxes 
D) a higher nominal wage 
E) a higher nominal wage after payment of taxes

Question 4

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 it 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 it an employment contract 
E) government increases the level of social security retirement benefits to correct for the effects of unanticipated inflation

Question 5

During the late 1960's the inflation experienced in the United States as a result of the spending on the Vietnam War is referred to as

Accepted Answer

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

Question 6

Sharon was being treated unfairly by her boss, so she stormed off the job and two weeks later found another position. For two weeks Sharon experienced

Accepted Answer

A) cyclical unemployment 
B) structural unemployment 
C) seasonal unemployment 
D) frictional unemployment 
E) being out of the labor force 
A) cyclical unemployment 
B) structural unemployment 
C) seasonal unemployment 
D) frictional unemployment 
E) being out of the labor force

Question 7

The impact of __________ unemployment is removed from official unemployment figures that are reported monthly.

Accepted Answer

A) cyclical 
B) structural 
C) seasonal 
D) frictional 
E) involuntary 
A) cyclical 
B) structural 
C) seasonal 
D) frictional 
E) involuntary

Question 8

The nominal interest rate is equal to the real interest rate minus the anticipated inflation rate.

Accepted Answer

A) True 
 B)False

Question 9

During which of the following decades was the U.S. inflation rate highest?

Accepted Answer

A) 1920s 
B) 1930s 
C) 1950s 
D) 1970s 
E) 1980s 
A) 1920s 
B) 1930s 
C) 1950s 
D) 1970s 
E) 1980s

Question 10

If future price changes were perfectly anticipated by both borrowers and lenders, what would happen to the real interest rate in the future if the price level changed?

Accepted Answer

A) it would increase 
B) it would decrease 
C) it would decrease by the amount of the price increase 
D) it would increase by the amount of the price increase 
E) it would not change 
A) it would increase 
B) it would decrease 
C) it would decrease by the amount of the price increase 
D) it would increase by the amount of the price increase 
E) it would not change

Question 11

If the inflation rate is higher than expected, which of the following groups in society would be most likely to gain?

Accepted Answer

A) borrowers 
B) lenders 
C) persons holding large amounts of money 
D) persons on fixed incomes 
E) workers under contract without a cost of living adjustment 
A) borrowers 
B) lenders 
C) persons holding large amounts of money 
D) persons on fixed incomes 
E) workers under contract without a cost of living adjustment

Question 12

If the official unemployment rate increases in March from its February level because of sluggish sales in the auto industry, we can conclude that __________ unemployment is responsible for the increase.

Accepted Answer

A) seasonal 
B) cyclical 
C) structural 
D) frictional 
E) any one of the causes of 
A) seasonal 
B) cyclical 
C) structural 
D) frictional 
E) any one of the causes of

Question 13

Which period in U.S. economic history was not characterized by inflation?

Accepted Answer

A) 1917-1920 
B) 1929-1933 
C) 1947 
D) 1978-1980 
E) 1980-1989 
A) 1917-1920 
B) 1929-1933 
C) 1947 
D) 1978-1980 
E) 1980-1989

Question 14

A recent college graduate who is still looking for their first job, would be considered as

Accepted Answer

A) a discouraged worker 
B) underemployed 
C) overemployed 
D) unemployed 
E) not in the labor force 
A) a discouraged worker 
B) underemployed 
C) overemployed 
D) unemployed 
E) not in the labor force

Question 15

Which of the following people would be counted in the labor force?

Accepted Answer

A) Chou, who lost his job and last looked for work three months ago 
B) Stephanie, who holds a Ph.D. in history, but can only find part-time employment at a fast-food restaurant 
C) Jordan, who would like to work as a stockbroker but is now a househusband 
D) Steffan, who thinks he could easily earn $100,000 per year, despite the opinion of the psychiatrist at the state hospital where he is a patient 
E) Monique, age 90, who is enjoying her retirement in Montana 
A) Chou, who lost his job and last looked for work three months ago 
B) Stephanie, who holds a Ph.D. in history, but can only find part-time employment at a fast-food restaurant 
C) Jordan, who would like to work as a stockbroker but is now a househusband 
D) Steffan, who thinks he could easily earn $100,000 per year, despite the opinion of the psychiatrist at the state hospital where he is a patient 
E) Monique, age 90, who is enjoying her retirement in Montana

Question 16

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

Accepted Answer

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

Question 17

Which of the following is most likely to reduce structural unemployment?

Accepted Answer

A) a reduction in wage rates 
B) increasing efficiency of the job search through better information on local job openings 
C) retraining workers in marketable skills 
D) promotion of full employment through government stabilization policies 
E) reducing the cost of job loss through enhanced unemployment compensation 
A) a reduction in wage rates 
B) increasing efficiency of the job search through better information on local job openings 
C) retraining workers in marketable skills 
D) promotion of full employment through government stabilization policies 
E) reducing the cost of job loss through enhanced unemployment compensation

Question 18

Since World War II, the average duration of unemployment in the U.S.

Accepted Answer

A) increased 
B) decreased 
C) has shown no change 
D) decreased until 1972, then increased down to the present 
E) decreased until 1984, then increased down to the present 
A) increased 
B) decreased 
C) has shown no change 
D) decreased until 1972, then increased down to the present 
E) decreased until 1984, then increased down to the present

Question 19

If the CPI in 2003 was 150 and the CPI in 2004 was 160, the inflation rate over the year was 10 percent.

Accepted Answer

A) True 
 B)False

Question 20

Different demographic groups

Accepted Answer

A) have identical durations of unemployment 
B) have identical unemployment rates 
C) are weighted equally in the official unemployment rate 
D) have different unemployment rates 
E) are weighted more heavily in the official unemployment rate if they have larger unemployment rates 
A) have identical durations of unemployment 
B) have identical unemployment rates 
C) are weighted equally in the official unemployment rate 
D) have different unemployment rates 
E) are weighted more heavily in the official unemployment rate if they have larger unemployment rates

Exam 8: Unemployment and Inflation

Joel just graduated from college and is looking for a job. Economists would classify Joel as

The misery index is the sum of the unemployment rate and the inflation rate.

A decrease in a person's real wage necessarily means

A worker would be hurt least by inflation when the

During the late 1960's the inflation experienced in the United States as a result of the spending on the Vietnam War is referred to as

Sharon was being treated unfairly by her boss, so she stormed off the job and two weeks later found another position. For two weeks Sharon experienced

The impact of __________ unemployment is removed from official unemployment figures that are reported monthly.

The nominal interest rate is equal to the real interest rate minus the anticipated inflation rate.

During which of the following decades was the U.S. inflation rate highest?

If future price changes were perfectly anticipated by both borrowers and lenders, what would happen to the real interest rate in the future if the price level changed?

If the inflation rate is higher than expected, which of the following groups in society would be most likely to gain?

If the official unemployment rate increases in March from its February level because of sluggish sales in the auto industry, we can conclude that __________ unemployment is responsible for the increase.

Which period in U.S. economic history was not characterized by inflation?

A recent college graduate who is still looking for their first job, would be considered as

Which of the following people would be counted in the labor force?

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

Which of the following is most likely to reduce structural unemployment?

Since World War II, the average duration of unemployment in the U.S.

If the CPI in 2003 was 150 and the CPI in 2004 was 160, the inflation rate over the year was 10 percent.

Different demographic groups

The Art and Science of Economic Analysis

Understanding Graphs-Appendix

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the Us Economy

Productivity and Growth

Aaggregate Expenditure and Agregate Demand

Aggregate Expenditure and 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

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