Question 1

The original Phillips Curve shows an immediate inverse relationship between unemployment and the velocity of money.

Accepted Answer

A) True 
 B)False

Question 2

Which type of unemployment is a problem that requires worker retraining?

Accepted Answer

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

Question 3

When unemployed workers get discouraged and stop looking for work, the labour force participation rate does not change.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Wages tend to fall, or at least not rise as fast, during recessions.

Accepted Answer

A) True 
 B)False

Question 6

In an inflationary gap, cyclical unemployment is probably zero.

Accepted Answer

A) True 
 B)False

Question 7

When real GDP equals potential GDP, the natural rate of unemployment is zero percent.

Accepted Answer

A) True 
 B)False

Question 8

Economists in Olliestan estimate the natural rate of unemployment is 7 percent. If the official unemployment rate is 9 percent, then

Accepted Answer

A)  cyclical unemployment is negative. 
B)  real GDP is less than potential GDP. 
C)  healthy unemployment is 2 percent. 
D)  cyclical unemployment is 9 percent. 
E)  real GDP is greater than potential GDP. 
A)  cyclical unemployment is negative. 
B)  real GDP is less than potential GDP. 
C)  healthy unemployment is 2 percent. 
D)  cyclical unemployment is 9 percent. 
E)  real GDP is greater than potential GDP.

Question 9

Economists in Olliestan estimate the natural rate of unemployment is 7 percent. The table below lists unemployment rates from the Labour Force Survey for selected months.   During which months did Olliestan have a recessionary gap?

Accepted Answer

A)  March, April and May 
B)  March and April, but not May 
C)  April and May, not March 
D)  Only March 
E)  Only May 
A)  March, April and May 
B)  March and April, but not May 
C)  April and May, not March 
D)  Only March 
E)  Only May

Question 10

The formula for the inflation rate between two years is 100 times (CPI for current year minus CPI for previous year) divided by the CPI for the current year.

Accepted Answer

A) True 
 B)False

Question 11

Who is cyclically unemployed?

Accepted Answer

A)  A Saskatchewan farmer who lost his farm and is unemployed until retrained. 
B)  A Prince Edward Island fishery worker searching for a better job closer to home. 
C)  A steelworker who is laid off but expects to be called back soon. 
D)  An office worker who lost her job because of a general slowdown in economic activity. 
E)  None of the above are cyclically unemployed. 
A)  A Saskatchewan farmer who lost his farm and is unemployed until retrained. 
B)  A Prince Edward Island fishery worker searching for a better job closer to home. 
C)  A steelworker who is laid off but expects to be called back soon. 
D)  An office worker who lost her job because of a general slowdown in economic activity. 
E)  None of the above are cyclically unemployed.

Question 12

Which is not part of the story of cost-push inflation?

Accepted Answer

A)  increasing costs push up output prices 
B)  demand for output decreases relative to supply 
C)  increasing quantity of money 
D)  businesses have unsold products and services 
E)  consumers have less income to spend 
A)  increasing costs push up output prices 
B)  demand for output decreases relative to supply 
C)  increasing quantity of money 
D)  businesses have unsold products and services 
E)  consumers have less income to spend

Question 13

The Phillips Curve suggests an inverse relationship between

Accepted Answer

A)  velocity and unemployment. 
B)  unemployment and inflation. 
C)  the Consumer Price Index and the velocity of money. 
D)  shoe size and IQ. 
E)  velocity and inflation. 
A)  velocity and unemployment. 
B)  unemployment and inflation. 
C)  the Consumer Price Index and the velocity of money. 
D)  shoe size and IQ. 
E)  velocity and inflation.

Question 14

The quantity theory of money suggests that inflation is caused by printing money.

Accepted Answer

A) True 
 B)False

Question 15

The Phillips Curve suggests that governments can reduce unemployment by increasing

Accepted Answer

A)  taxes. 
B)  the price of oil. 
C)  unemployment insurance benefits. 
D)  the money supply. 
E)  wages. 
A)  taxes. 
B)  the price of oil. 
C)  unemployment insurance benefits. 
D)  the money supply. 
E)  wages.

Question 16

Cyclical unemployment decreases during economic expansions.

Accepted Answer

A) True 
 B)False

Question 17

If the velocity of money is 5, real GDP is 200 and the money supply is 120, what are average prices?

Accepted Answer

A)  0.3 
B)  12 
C)  3.0 
D)  1.2 
E)  8.3 
A)  0.3 
B)  12 
C)  3.0 
D)  1.2 
E)  8.3

Question 18

In a cost-push inflation, rising average prices are caused by negative supply shocks.

Accepted Answer

A) True 
 B)False

Question 19

The velocity of money is 5. The quantity theory of money suggests that an 8 percent increase in the money supply results in a 40 percent increase in average prices.

Accepted Answer

A) True 
 B)False

Question 20

The Phillips Curve is consistent with the story of ________ inflation.

Accepted Answer

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

The original Phillips Curve shows an immediate inverse relationship between unemployment and the velocity of money.

Which type of unemployment is a problem that requires worker retraining?

When unemployed workers get discouraged and stop looking for work, the labour force participation rate does not change.

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

Wages tend to fall, or at least not rise as fast, during recessions.

In an inflationary gap, cyclical unemployment is probably zero.

When real GDP equals potential GDP, the natural rate of unemployment is zero percent.

Economists in Olliestan estimate the natural rate of unemployment is 7 percent. If the official unemployment rate is 9 percent, then

Economists in Olliestan estimate the natural rate of unemployment is 7 percent. The table below lists unemployment rates from the Labour Force Survey for selected months. During which months did Olliestan have a recessionary gap?

The formula for the inflation rate between two years is 100 times (CPI for current year minus CPI for previous year) divided by the CPI for the current year.

Who is cyclically unemployed?

Which is not part of the story of cost-push inflation?

The Phillips Curve suggests an inverse relationship between

The quantity theory of money suggests that inflation is caused by printing money.

The Phillips Curve suggests that governments can reduce unemployment by increasing

Cyclical unemployment decreases during economic expansions.

If the velocity of money is 5, real GDP is 200 and the money supply is 120, what are average prices?

In a cost-push inflation, rising average prices are caused by negative supply shocks.

The velocity of money is 5. The quantity theory of money suggests that an 8 percent increase in the money supply results in a 40 percent increase in average prices.

The Phillips Curve 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

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

The original Phillips Curve shows an immediate inverse relationship between unemployment and the velocity of money.

Which type of unemployment is a problem that requires worker retraining?

When unemployed workers get discouraged and stop looking for work, the labour force participation rate does not change.

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

Wages tend to fall, or at least not rise as fast, during recessions.

In an inflationary gap, cyclical unemployment is probably zero.

When real GDP equals potential GDP, the natural rate of unemployment is zero percent.

Economists in Olliestan estimate the natural rate of unemployment is 7 percent. If the official unemployment rate is 9 percent, then

Economists in Olliestan estimate the natural rate of unemployment is 7 percent. The table below lists unemployment rates from the Labour Force Survey for selected months. During which months did Olliestan have a recessionary gap?

The formula for the inflation rate between two years is 100 times (CPI for current year minus CPI for previous year) divided by the CPI for the current year.

Who is cyclically unemployed?

Which is not part of the story of cost-push inflation?

The Phillips Curve suggests an inverse relationship between

The quantity theory of money suggests that inflation is caused by printing money.

The Phillips Curve suggests that governments can reduce unemployment by increasing

Cyclical unemployment decreases during economic expansions.

If the velocity of money is 5, real GDP is 200 and the money supply is 120, what are average prices?

In a cost-push inflation, rising average prices are caused by negative supply shocks.

The velocity of money is 5. The quantity theory of money suggests that an 8 percent increase in the money supply results in a 40 percent increase in average prices.

The Phillips Curve 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