Question 1

In the accompanying diagram, the phases of the business cycle from points A to D are

Accepted Answer

A)   peak, recession, expansion, trough, respectively.
B)   trough, recovery, expansion, peak, respectively.
C)   expansion, recession, trough, peak, respectively.
D)   peak, recession, trough, expansion, respectively.E) A) and C)
F) B) and C)

Question 2

At the economy's natural rate of unemployment,

Accepted Answer

A)   the economy achieves its potential output.
B)   there is only a relatively small amount of cyclical unemployment.
C)   only frictional unemployment exists.
D)   only structural unemployment exists.E) B) and C)
F) None of the above

Question 3

When total input costs rise slower than the total units of output produced, then the per-unit production costs

Accepted Answer

A)   will decrease.
B)   will increase.
C)   will be unaffected.
D)   may either increase or decrease.E) B) and C)
F) A) and C)

Question 4

The rate of unemployment tends to be lowest for

Accepted Answer

A)   black teenagers.
B)   white teenagers.
C)   black adult males.
D)   white adult males.E) B) and C)
F) All of the above

Question 5

The industries or sectors of the economy in which business cycle ﬂuctuations tend to affect output most are

Accepted Answer

A)   military goods and capital goods.
B)   services and nondurable consumer goods.
C)   clothing and education.
D)   capital goods and durable consumer goods.E) B) and C)
F) None of the above

Question 6

Explain the differences among the frictional, structural, and cyclical forms of unemployment.

Accepted Answer

Frictional unemployment is a type of une...

Question 7

Potential Real GDP $200 Billion  Natural Rate of Unemployment 6% Actual Rate of Unemployment 12%\begin{array} { | l | c | } \hline 	ext { Potential Real GDP } & \$ 200 	ext { Billion } \\hline 	ext { Natural Rate of Unemployment } & 6 \% \\hline 	ext { Actual Rate of Unemployment } & 12 \% \\hline\end{array} Potential Real GDP  Natural Rate of Unemployment  Actual Rate of Unemployment ​$200 Billion 6%12%​​  Refer to the accompanying data, which is for a speci?c year in a hypothetical economy for which Okun's law is applicable. The size of the negative GDP gap as a percentage of potential GDP for the
Economy is

Accepted Answer

A)   6 percent.
B)   9 percent.
C)   12 percent.
D)   15 percent. E) A) and B)
F) A) and C)

Question 8

Real income will rise from one year to the next if nominal income

Accepted Answer

A)   falls and the price level falls faster.
B)   rises and the price level rises faster.
C)   falls and the price level rises.
D)   falls faster than the price level.E) A) and D)
F) A) and C)

Question 9

The percentage change in real income can be approximated by subtracting the percentage change
in the price level from the percentage change in nominal income.

Accepted Answer

A) True 
 B)False

Question 10

The higher the rate of unemployment,

Accepted Answer

A)   the larger is the GDP gap.
B)   the smaller is the GDP gap.
C)   the higher is the level of actual GDP.
D)   the lower is the level of potential GDP.E) A) and B)
F) A) and C)

Question 11

Inﬂation caused by an increase in total spending is referred to as

Accepted Answer

A)   cost-push inﬂation.
B)   anticipated inﬂation.
C)   demand-pull inﬂation.
D)   hyperinﬂation.E) B) and C)
F) None of the above

Question 12

Full-employment output is also called

Accepted Answer

A)   zero-unemployment output.
B)   equilibrium output.
C)   potential output.
D)   zero-savings output.E) All of the above
F) A) and C)

Question 13

The unemployment rate in an economy is 7.5 percent. The total population of the economy is 250 million and the size of the civilian labor force is 180 million. The number of employed workers in this
Economy is

Accepted Answer

A)   13.5 million.
B)   15.7 million.
C)   166.5 million.
D)   174.6 million.E) C) and D)
F) None of the above

Question 14

Susie has lost her job in a Vermont textile plant because of import competition. She intends to take a short course in electronics and move to Oregon, where she anticipates that a new job will be
Available. We can say that Susie is faced with

Accepted Answer

A)   seasonal unemployment.
B)   cyclical unemployment.
C)   structural unemployment.
D)   frictional unemployment.E) B) and C)
F) A) and C)

Question 15

Which of the following formulas is correct? Percentage change in

Accepted Answer

A)   price level approximates percentage change in real income minus percentage change in nominal income.
B)   real income approximates percentage change in nominal income minus percentage change in price level.
C)   nominal income approximates percentage change in price level minus percentage change in real income.
D)   real income approximates percentage change in price level minus percentage change in nominal income.E) C) and D)
F) All of the above

Question 16

(Last Word) Like previous generations, the current generation of Americans are willing to move at
least once or twice from one part of the country to another for employment opportunities.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statistics can turn negative?

Accepted Answer

A)   inﬂation rate
B)   GDP
C)   CPI
D)   unemployment rateE) A) and B)
F) None of the above

Question 18

Cost-push inﬂation tends to be characterized by all of the following, except

Accepted Answer

A)   rising general price level.
B)   falling real output.
C)   rising unemployment.
D)   falling unemployment.E) All of the above
F) A) and C)

Question 19

If the rate of inﬂation is 12 percent per year, the price level will double in about

Accepted Answer

A)   4.1 years.
B)   5.8 years.
C)   10.2 years.
D)   12.4 years.E) A) and C)
F) C) and D)

Question 20

Inﬂation that occurs when total spending is greater than the economy's ability to produce output at the existing price level is

Accepted Answer

A)   anticipated inﬂation.
B)   demand-pull inﬂation.
C)   cost-push inﬂation.
D)   unanticipated inﬂation.E) A) and B)
F) A) and C)

Exam 9: Business Cycles, Unemployment, and Inflation

The percentage change in real income can be approximated by subtracting the percentage change in the price level from the percentage change in nominal income.

Correct Answer
verified

Explain the differences among the frictional, structural, and cyclical forms of unemployment.

Correct Answer
verified
Frictional unemployment is a type of une...
View Answer

The industries or sectors of the economy in which business cycle ﬂuctuations tend to affect output most are

Correct Answer
verified

Inﬂation that occurs when total spending is greater than the economy's ability to produce output at the existing price level is

Correct Answer
verified

Which of the following formulas is correct? Percentage change in

Correct Answer
verified

Susie has lost her job in a Vermont textile plant because of import competition. She intends to take a short course in electronics and move to Oregon, where she anticipates that a new job will be Available. We can say that Susie is faced with

Correct Answer
verified

In the accompanying diagram, the phases of the business cycle from points A to D are

Correct Answer
verified

If the rate of inﬂation is 12 percent per year, the price level will double in about

Correct Answer
verified

The rate of unemployment tends to be lowest for

Correct Answer
verified

(Last Word) Like previous generations, the current generation of Americans are willing to move at least once or twice from one part of the country to another for employment opportunities.

Correct Answer
verified

The higher the rate of unemployment,

Correct Answer
verified

The unemployment rate in an economy is 7.5 percent. The total population of the economy is 250 million and the size of the civilian labor force is 180 million. The number of employed workers in this Economy is

Correct Answer
verified

Correct Answer
verified

Full-employment output is also called

Correct Answer
verified

Inﬂation caused by an increase in total spending is referred to as

Correct Answer
verified

Real income will rise from one year to the next if nominal income

Correct Answer
verified

Cost-push inﬂation tends to be characterized by all of the following, except

Correct Answer
verified

At the economy's natural rate of unemployment,

Correct Answer
verified

Which of the following statistics can turn negative?

Correct Answer
verified

When total input costs rise slower than the total units of output produced, then the per-unit production costs

Correct Answer
verified

Exam 9: Business Cycles, Unemployment, and Inflation

The percentage change in real income can be approximated by subtracting the percentage change in the price level from the percentage change in nominal income.

Correct AnswerverifiedShow Answer

Explain the differences among the frictional, structural, and cyclical forms of unemployment.

Correct AnswerverifiedFrictional unemployment is a type of une...View AnswerShow Answer

The industries or sectors of the economy in which business cycle ﬂuctuations tend to affect output most are

Correct AnswerverifiedShow Answer

Inﬂation that occurs when total spending is greater than the economy's ability to produce output at the existing price level is

Correct AnswerverifiedShow Answer

Which of the following formulas is correct? Percentage change in

Correct AnswerverifiedShow Answer

Susie has lost her job in a Vermont textile plant because of import competition. She intends to take a short course in electronics and move to Oregon, where she anticipates that a new job will be Available. We can say that Susie is faced with

Correct AnswerverifiedShow Answer

In the accompanying diagram, the phases of the business cycle from points A to D are

Correct AnswerverifiedShow Answer

If the rate of inﬂation is 12 percent per year, the price level will double in about

Correct AnswerverifiedShow Answer

The rate of unemployment tends to be lowest for

Correct AnswerverifiedShow Answer

(Last Word) Like previous generations, the current generation of Americans are willing to move at least once or twice from one part of the country to another for employment opportunities.

Correct AnswerverifiedShow Answer

The higher the rate of unemployment,

Correct AnswerverifiedShow Answer

The unemployment rate in an economy is 7.5 percent. The total population of the economy is 250 million and the size of the civilian labor force is 180 million. The number of employed workers in this Economy is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Full-employment output is also called

Correct AnswerverifiedShow Answer

Inﬂation caused by an increase in total spending is referred to as

Correct AnswerverifiedShow Answer

Real income will rise from one year to the next if nominal income

Correct AnswerverifiedShow Answer

Cost-push inﬂation tends to be characterized by all of the following, except

Correct AnswerverifiedShow Answer

At the economy's natural rate of unemployment,

Correct AnswerverifiedShow Answer

Which of the following statistics can turn negative?

Correct AnswerverifiedShow Answer

When total input costs rise slower than the total units of output produced, then the per-unit production costs

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
verified
Frictional unemployment is a type of une...
View Answer

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