Question 1

The natural rate of unemployment does not include cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 2

Discouraged workers - those who gave up actively seeking employment - are considered to be unemployed.

Accepted Answer

A) True 
 B)False

Question 3

When real GDP equals potential GDP, cyclical unemployment is zero.

Accepted Answer

A) True 
 B)False

Question 4

When the price level falls by 20 percent, products that previously cost $60 now cost $48.

Accepted Answer

A) True 
 B)False

Question 5

When there are part-time workers who wish to work full-time, the official unemployment rate

Accepted Answer

A)  rises when these workers find full-time jobs. 
B)  falls when these workers find full-time jobs. 
C)  overstates the unemployment problem. 
D)  understates the unemployment problem. 
E)  counts these workers as discouraged. 
A)  rises when these workers find full-time jobs. 
B)  falls when these workers find full-time jobs. 
C)  overstates the unemployment problem. 
D)  understates the unemployment problem. 
E)  counts these workers as discouraged.

Question 6

When the price level rises by 10 percent, products that cost $20 last year now cost

Accepted Answer

A)  $21. 
B)  $25. 
C)  $22. 
D)  $200. 
E)  $2. 
A)  $21. 
B)  $25. 
C)  $22. 
D)  $200. 
E)  $2.

Question 7

Cost-push inflation is caused by

Accepted Answer

A)  expansion. 
B)  positive supply shocks. 
C)  contraction. 
D)  regulation. 
E)  negative supply shocks. 
A)  expansion. 
B)  positive supply shocks. 
C)  contraction. 
D)  regulation. 
E)  negative supply shocks.

Question 8

When the price level rises by 10 percent, products that previously cost $50 now cost $60.

Accepted Answer

A) True 
 B)False

Question 9

Consumers will wait to buy during periods of deflation.

Accepted Answer

A) True 
 B)False

Question 10

Involuntary part-time employment is counted as unemployment.

Accepted Answer

A) True 
 B)False

Question 11

Deflation

Accepted Answer

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

Question 12

During periods of deflation, the

Accepted Answer

A)  cost of living rises. 
B)  value of housing falls. 
C)  value of money falls. 
D)  borrowers are better off than the lenders. 
E)  value of housing rises. 
A)  cost of living rises. 
B)  value of housing falls. 
C)  value of money falls. 
D)  borrowers are better off than the lenders. 
E)  value of housing rises.

Question 13

Frictional unemployment is a problem that policymakers need to address.

Accepted Answer

A) True 
 B)False

Question 14

Unemployment rates in Atlantic Canada are usually higher than the national unemployment rate.

Accepted Answer

A) True 
 B)False

Question 15

Velocity of money is the number of times a unit of money changes hands during a year.

Accepted Answer

A) True 
 B)False

Question 16

The number of times that money changes hands each year is called

Accepted Answer

A)  the rate of inflation. 
B)  the monetary base. 
C)  average prices. 
D)  the velocity of money. 
E)  bribery. 
A)  the rate of inflation. 
B)  the monetary base. 
C)  average prices. 
D)  the velocity of money. 
E)  bribery.

Question 17

A country has a working-age population of 30 million, with 18 million employed and 2 million unemployed. 2 million of the employed are working part-time, and half of these persons wish to work full-time. The labour force participation rate is

Accepted Answer

A)  10 percent. 
B)  11.1 percent. 
C)  60 percent. 
D)  63.3 percent. 
E)  66.7 percent. 
A)  10 percent. 
B)  11.1 percent. 
C)  60 percent. 
D)  63.3 percent. 
E)  66.7 percent.

Question 18

The original Phillips Curve is consistent with a demand-push story of inflation.

Accepted Answer

A) True 
 B)False

Question 19

When there is stagflation, the relationship between inflation and unemployment is

Accepted Answer

A)  constant. 
B)  non-existent. 
C)  inverse. 
D)  positive. 
E)  negative. 
A)  constant. 
B)  non-existent. 
C)  inverse. 
D)  positive. 
E)  negative.

Question 20

The demand-pull story of inflation is not consistent with the original Phillips Curve.

Accepted Answer

A) True 
 B)False

The natural rate of unemployment does not include cyclical unemployment.

Discouraged workers - those who gave up actively seeking employment - are considered to be unemployed.

When real GDP equals potential GDP, cyclical unemployment is zero.

When the price level falls by 20 percent, products that previously cost $60 now cost $48.

When there are part-time workers who wish to work full-time, the official unemployment rate

When the price level rises by 10 percent, products that cost $20 last year now cost

Cost-push inflation is caused by

When the price level rises by 10 percent, products that previously cost $50 now cost $60.

Consumers will wait to buy during periods of deflation.

Involuntary part-time employment is counted as unemployment.

Deflation

During periods of deflation, the

Frictional unemployment is a problem that policymakers need to address.

Unemployment rates in Atlantic Canada are usually higher than the national unemployment rate.

Velocity of money is the number of times a unit of money changes hands during a year.

The number of times that money changes hands each year is called

A country has a working-age population of 30 million, with 18 million employed and 2 million unemployed. 2 million of the employed are working part-time, and half of these persons wish to work full-time. The labour force participation rate is

The original Phillips Curve is consistent with a demand-push story of inflation.

When there is stagflation, the relationship between inflation and unemployment is

The demand-pull story of inflation is not consistent with the original Phillips Curve.

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

The natural rate of unemployment does not include cyclical unemployment.

Discouraged workers - those who gave up actively seeking employment - are considered to be unemployed.

When real GDP equals potential GDP, cyclical unemployment is zero.

When the price level falls by 20 percent, products that previously cost $60 now cost $48.

When there are part-time workers who wish to work full-time, the official unemployment rate

When the price level rises by 10 percent, products that cost $20 last year now cost

Cost-push inflation is caused by

When the price level rises by 10 percent, products that previously cost $50 now cost $60.

Consumers will wait to buy during periods of deflation.

Involuntary part-time employment is counted as unemployment.

Deflation

During periods of deflation, the

Frictional unemployment is a problem that policymakers need to address.

Unemployment rates in Atlantic Canada are usually higher than the national unemployment rate.

Velocity of money is the number of times a unit of money changes hands during a year.

The number of times that money changes hands each year is called

A country has a working-age population of 30 million, with 18 million employed and 2 million unemployed. 2 million of the employed are working part-time, and half of these persons wish to work full-time. The labour force participation rate is

The original Phillips Curve is consistent with a demand-push story of inflation.

When there is stagflation, the relationship between inflation and unemployment is

The demand-pull story of inflation is not consistent with the original Phillips Curve.

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