Question 1

Inflation is a worry for people with fixed incomes, but a benefit for those with savings in the bank.

Accepted Answer

A) True 
 B)False

Question 2

All economists agree that the natural rate of unemployment is a constant number somewhere between 4 percent and 9 percent.

Accepted Answer

A) True 
 B)False

Question 3

According to the quantity theory of money, a decrease in the quantity of money causes

Accepted Answer

A)  both average prices and real GDP to decrease. 
B)  average prices to decrease but nominal GDP to increase. 
C)  both average prices and nominal GDP to increase. 
D)  both average prices and nominal GDP to decrease. 
E)  average prices to decrease but nominal GDP will stay constant. 
A)  both average prices and real GDP to decrease. 
B)  average prices to decrease but nominal GDP to increase. 
C)  both average prices and nominal GDP to increase. 
D)  both average prices and nominal GDP to decrease. 
E)  average prices to decrease but nominal GDP will stay constant.

Question 4

According to the quantity theory of money, increases in money lead to increases in

Accepted Answer

A)  average prices. 
B)  velocity. 
C)  potential GDP. 
D)  real GDP. 
E)  unemployment. 
A)  average prices. 
B)  velocity. 
C)  potential GDP. 
D)  real GDP. 
E)  unemployment.

Question 5

The CPI keeps quantities fixed to isolate changes in prices.

Accepted Answer

A) True 
 B)False

Question 6

Inflation

Accepted Answer

A)  hurts savers but benefits borrowers. 
B)  hurts savers and borrowers. 
C)  benefits savers and borrowers. 
D)  benefits savers but hurts borrowers. 
E)  has no effect on savers or borrowers. 
A)  hurts savers but benefits borrowers. 
B)  hurts savers and borrowers. 
C)  benefits savers and borrowers. 
D)  benefits savers but hurts borrowers. 
E)  has no effect on savers or borrowers.

Question 7

The introduction of new products, like the iPhone

Accepted Answer

A)  makes the CPI fall. 
B)  makes the CPI rise. 
C)  does not affect the CPI. 
D)  creates deflation. 
E)  creates inflation. 
A)  makes the CPI fall. 
B)  makes the CPI rise. 
C)  does not affect the CPI. 
D)  creates deflation. 
E)  creates inflation.

Question 8

The original Phillips Curve

Accepted Answer

A)  shows an immediate trade-off between inflation and unemployment. 
B)  is a short-run relationship. 
C)  can shift if inflation expectations change over time. 
D)  can shift if the natural rate of employment changes over time. 
E)  does all of the above. 
A)  shows an immediate trade-off between inflation and unemployment. 
B)  is a short-run relationship. 
C)  can shift if inflation expectations change over time. 
D)  can shift if the natural rate of employment changes over time. 
E)  does all of the above.

Question 9

When there is deflation, the value of money is falling.

Accepted Answer

A) True 
 B)False

Question 10

The original Phillips Curve trade-offs between inflation and unemployment become complicated over time if the natural rate of unemployment changes.

Accepted Answer

A) True 
 B)False

Question 11

East Westfalia reported these unemployment rates for 2015: cyclical 3 percent, seasonal 2 percent, frictional 5 percent and structural 4 percent. East Westfalia has a(n)

Accepted Answer

A)  full employment equilibrium. 
B)  monetary squeeze. 
C)  structural revolution. 
D)  recessionary gap. 
E)  inflationary gap. 
A)  full employment equilibrium. 
B)  monetary squeeze. 
C)  structural revolution. 
D)  recessionary gap. 
E)  inflationary gap.

Question 12

If the inflation rate is 10 percent, products that used to cost $80 cost ________ a year later.

Accepted Answer

A)  $90 
B)  $88 
C)  $81 
D)  $70 
E)  $800 
A)  $90 
B)  $88 
C)  $81 
D)  $70 
E)  $800

Question 13

The quantity theory of money states that M x V = P x Q.

Accepted Answer

A) True 
 B)False

Question 14

Consumers in Studentland buy Pizza and Pepsi - nothing else. Prices and quantities are shown in the table below.   The annual rate of inflation between 2015 and 2016 was

Accepted Answer

A)  60 percent. 
B)  40 percent. 
C)  100 percent. 
D)  67 percent. 
E)  20 percent. 
A)  60 percent. 
B)  40 percent. 
C)  100 percent. 
D)  67 percent. 
E)  20 percent.

Question 15

The official unemployment rate can fall below the natural rate of unemployment.

Accepted Answer

A) True 
 B)False

Question 16

Real interest rates are more important than nominal interest rates for making smart saving and investing decisions.

Accepted Answer

A) True 
 B)False

Question 17

When the economy is at full employment

Accepted Answer

A)  cyclical unemployment is zero. 
B)  frictional unemployment is zero. 
C)  seasonal unemployment is zero. 
D)  structural unemployment is zero. 
E)  all forms of unemployment are zero. 
A)  cyclical unemployment is zero. 
B)  frictional unemployment is zero. 
C)  seasonal unemployment is zero. 
D)  structural unemployment is zero. 
E)  all forms of unemployment are zero.

Question 18

When the real interest rate is 2 percent and the inflation rate is 5 percent, the nominal interest rate is 3 percent.

Accepted Answer

A) True 
 B)False

Question 19

The original Phillips Curve trade-offs between inflation and unemployment become complicated over time if expectations change.

Accepted Answer

A) True 
 B)False

Question 20

Stagflation is consistent with the story of ________ inflation.

Accepted Answer

A)  cost-pull 
B)  cost-push 
C)  demand-pull 
D)  demand-push 
E)  push-pull 
A)  cost-pull 
B)  cost-push 
C)  demand-pull 
D)  demand-push 
E)  push-pull

Inflation is a worry for people with fixed incomes, but a benefit for those with savings in the bank.

All economists agree that the natural rate of unemployment is a constant number somewhere between 4 percent and 9 percent.

According to the quantity theory of money, a decrease in the quantity of money causes

According to the quantity theory of money, increases in money lead to increases in

The CPI keeps quantities fixed to isolate changes in prices.

Inflation

The introduction of new products, like the iPhone

The original Phillips Curve

When there is deflation, the value of money is falling.

The original Phillips Curve trade-offs between inflation and unemployment become complicated over time if the natural rate of unemployment changes.

East Westfalia reported these unemployment rates for 2015: cyclical 3 percent, seasonal 2 percent, frictional 5 percent and structural 4 percent. East Westfalia has a(n)

If the inflation rate is 10 percent, products that used to cost $80 cost ________ a year later.

The quantity theory of money states that M x V = P x Q.

Consumers in Studentland buy Pizza and Pepsi - nothing else. Prices and quantities are shown in the table below. The annual rate of inflation between 2015 and 2016 was

The official unemployment rate can fall below the natural rate of unemployment.

Real interest rates are more important than nominal interest rates for making smart saving and investing decisions.

When the economy is at full employment

When the real interest rate is 2 percent and the inflation rate is 5 percent, the nominal interest rate is 3 percent.

The original Phillips Curve trade-offs between inflation and unemployment become complicated over time if expectations change.

Stagflation is consistent with the story of ________ inflation.

Whats in Economics for You Scarcity, Opportunity Cost, Trade, and Models

Making Smart Choices: the Law of Demand

Show Me the Money: the Law of Supply

Coordinating Smart Choices: Demand and Supply

Are Your Smart Choices Smart for All Macroeconomics and Microeconomics

Up Around the Circular Flow: Gdp, Economic Growth, and Business Cycles

Skating to Where the Puck Is Going: Aggregate Supply and Aggregate Demand

Money Is for Lunatics: Demanders and Suppliers of Money

Trading Dollars for Dollars Exchange Rates and Payments With the Rest of the World

Steering Blindly Monetary Policy and the Bank of Canada

Spending Others Money: Fiscal Policy, Deficits, and National Debt

Are Sweatshops All Bad Globalization and Trade Policy

Filters

Exam 7: Costs of Not Working and Living: Unemployment and Inflation

Inflation is a worry for people with fixed incomes, but a benefit for those with savings in the bank.

All economists agree that the natural rate of unemployment is a constant number somewhere between 4 percent and 9 percent.

According to the quantity theory of money, a decrease in the quantity of money causes

According to the quantity theory of money, increases in money lead to increases in

The CPI keeps quantities fixed to isolate changes in prices.

Inflation

The introduction of new products, like the iPhone

The original Phillips Curve

When there is deflation, the value of money is falling.

The original Phillips Curve trade-offs between inflation and unemployment become complicated over time if the natural rate of unemployment changes.

East Westfalia reported these unemployment rates for 2015: cyclical 3 percent, seasonal 2 percent, frictional 5 percent and structural 4 percent. East Westfalia has a(n)

If the inflation rate is 10 percent, products that used to cost $80 cost ________ a year later.

The quantity theory of money states that M x V = P x Q.

Consumers in Studentland buy Pizza and Pepsi - nothing else. Prices and quantities are shown in the table below. The annual rate of inflation between 2015 and 2016 was

The official unemployment rate can fall below the natural rate of unemployment.

Real interest rates are more important than nominal interest rates for making smart saving and investing decisions.

When the economy is at full employment

When the real interest rate is 2 percent and the inflation rate is 5 percent, the nominal interest rate is 3 percent.

The original Phillips Curve trade-offs between inflation and unemployment become complicated over time if expectations change.

Stagflation is consistent with the story of ________ inflation.

Whats in Economics for You Scarcity, Opportunity Cost, Trade, and Models

Making Smart Choices: the Law of Demand

Show Me the Money: the Law of Supply

Coordinating Smart Choices: Demand and Supply

Are Your Smart Choices Smart for All Macroeconomics and Microeconomics

Up Around the Circular Flow: Gdp, Economic Growth, and Business Cycles

Skating to Where the Puck Is Going: Aggregate Supply and Aggregate Demand

Money Is for Lunatics: Demanders and Suppliers of Money

Trading Dollars for Dollars Exchange Rates and Payments With the Rest of the World

Steering Blindly Monetary Policy and the Bank of Canada

Spending Others Money: Fiscal Policy, Deficits, and National Debt

Are Sweatshops All Bad Globalization and Trade Policy

Filters