Question 1

If Dave loans funds at 2 percent while the inflation rate is 4 percent,his real rate of interest is -2 percent.

Accepted Answer

A) True 
 B)False

Question 2

People who are not currently employed,but say they want a job,are counted as unemployed only if they

Accepted Answer

A)   have previously held a job
B)   are actively seeking employment
C)   are willing to accept a reasonable offer
D)   are between 16 and 65 years of age
E)   are willing to accept any offer of employmentF) None of the above
G) B) and E)

Question 3

Which is true of cost-push inflation?

Accepted Answer

A)   It occurs when the aggregate demand curve shifts rightward.
B)   It occurs when the aggregate supply curve shifts rightward.
C)   It results in a decrease in the unemployment rate.
D)   It results in a movement along the aggregate demand curve.
E)   It is caused by the same factors that lead to demand-pull inflation.F) B) and C)
G) None of the above

Question 4

In times of rapid inflation,

Accepted Answer

A)   money loses its use as a store of value
B)   money becomes an attractive store of wealth
C)   people postpone purchases as long as possible
D)   people spend less in transactions costs
E)   people tend to save more moneyF) A) and E)
G) All of the above

Question 5

An occupation with a high unemployment rate is

Accepted Answer

A)   professionals in general
B)   attorneys
C)   technical workers in general
D)   auto workers
E)   Web page designersF) B) and C)
G) B) and E)

Question 6

Construction workers at times face high rates of unemployment because their work is both seasonal and subject to wide swings over the business cycle.

Accepted Answer

A) True 
 B)False

Question 7

Workers who are temporarily unemployed but who normally find jobs quickly are called

Accepted Answer

A)   frictionally unemployed
B)   cyclically unemployed
C)   seasonally unemployed
D)   structurally unemployed
E)   discouraged workersF) C) and E)
G) All of the above

Question 8

The view that union wage demands may be a source of inflation would be best associated with the

Accepted Answer

A)   supply shock view of inflation
B)   demand pull view of inflation
C)   cost push view of inflation
D)   demand push view of inflation
E)   monetary view of inflationF) B) and E)
G) A) and B)

Question 9

Unanticipated inflation creates problems for society because

Accepted Answer

A)   it increases the wealth of people who hold cash
B)   it promotes social cooperation by encouraging self-restraint
C)   it reduces the desire to plan and reduces the complexity of planning
D)   it redistributes wealth and income
E)   it requires buyers to spend less time acquiring information about pricesF) A) and D)
G) C) and D)

Question 10

The unemployment rate will increase whenever there is a(n)

Accepted Answer

A)   increase in the number of persons classified as unemployed
B)   increase in the number of unemployed relative to the size of the labor force
C)   increase in the size of the U.S.population and there is no change in the number of persons classified as employed
D)   reduction in the size of the labor force
E)   reduction in the size of the labor force while the number of unemployed decreasesF) A) and B)
G) B) and D)

Question 11

Which of the following people would be classified as unemployed?

Accepted Answer

A)   a person who wants a job as a fashion model but cannot find work in that field
B)   someone who quits a part-time job to attend school full-time
C)   someone who gives up looking for a job
D)   a person who works at a job that underemploys his or her skills
E)   a person who works part-time and would rather work full-timeF) A) and B)
G) A) and C)

Question 12

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 inflationF) B) and D)
G) B) and C)

Question 13

Cyclical unemployment results from

Accepted Answer

A)   a mismatch of skills
B)   being in the wrong geographical location
C)   monetary cost and the time it takes to find the best job
D)   seasonal decreases in demand for labor
E)   prolonged declines in business activityF) All of the above
G) B) and D)

Question 14

Suppose you received a 5 percent increase in your nominal wage.Over the year,inflation ran about 2 percent.Which of the following is true?

Accepted Answer

A)   Your real wage increased.
B)   Your nominal wage decreased.
C)   Both your nominal and real wages decreased.
D)   Although your nominal wage fell,your real wage increased.
E)   Although your nominal wage rose,your real wage decreased.F) A) and B)
G) D) and E)

Question 15

The labor force participation rate for women in the United States has

Accepted Answer

A)   stayed the same over the last 30 years
B)   increased significantly since the 1950s
C)   been influenced by decreasing real wages since 1960
D)   fluctuated substantially both upward and downward since the 1950s
E)   increased only very slightly since the 1950sF) D) and E)
G) A) and E)

Question 16

Structural unemployment refers to unemployment that results from

Accepted Answer

A)   inefficiencies in the market for labor that prolong the job search
B)   being in the wrong geographical location
C)   taking the time to find the best job
D)   seasonal decreases in demand for labor
E)   a recession in the economyF) B) and D)
G) A) and B)

Question 17

The unemployment rate does not measure all of the "unemployment problem." Which of the following groups is not counted as unemployed in the official unemployment statistics?

Accepted Answer

A)   the underemployed and the cyclically unemployed
B)   the underemployed and the discouraged workers
C)   the discouraged workers and the frictionally unemployed
D)   the frictionally unemployed and the structurally unemployed
E)   the cyclically unemployed and the frictionally unemployedF) All of the above
G) B) and E)

Question 18

Which type of unemployment is likely to increase the most in a recession?

Accepted Answer

A)   frictional unemployment
B)   seasonal unemployment
C)   structural unemployment
D)   cyclical unemployment
E)   employmentF) C) and D)
G) B) and E)

Question 19

The labor force participation rate climbs with education.

Accepted Answer

A) True 
 B)False

Question 20

If the inflation rate is 5 percent and you receive a wage increase of 5 percent,

Accepted Answer

A)   your nominal income declines but your real income increases
B)   both your nominal income and your real income increase by 5 percent
C)   your nominal income increases but your real income declines
D)   both your nominal income and your real income decrease by 5 percent
E)   your nominal income increases by 5 percent but your real income is unchangedF) C) and D)
G) None of the above

Exam 8: Unemployment and Inflation

Suppose you received a 5 percent increase in your nominal wage.Over the year,inflation ran about 2 percent.Which of the following is true?

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If the inflation rate is 5 percent and you receive a wage increase of 5 percent,

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Workers who are temporarily unemployed but who normally find jobs quickly are called

Correct AnswerverifiedShow Answer

Which of the following people would be classified as unemployed?

Correct AnswerverifiedShow Answer

The labor force participation rate for women in the United States has

Correct AnswerverifiedShow Answer

The unemployment rate will increase whenever there is a(n)

Correct AnswerverifiedShow Answer

If Dave loans funds at 2 percent while the inflation rate is 4 percent,his real rate of interest is -2 percent.

Correct AnswerverifiedShow Answer

People who are not currently employed,but say they want a job,are counted as unemployed only if they

Correct AnswerverifiedShow Answer

The unemployment rate does not measure all of the "unemployment problem." Which of the following groups is not counted as unemployed in the official unemployment statistics?

Correct AnswerverifiedShow Answer

An occupation with a high unemployment rate is

Correct AnswerverifiedShow Answer

The view that union wage demands may be a source of inflation would be best associated with the

Correct AnswerverifiedShow Answer

Cyclical unemployment results from

Correct AnswerverifiedShow Answer

Which type of unemployment is likely to increase the most in a recession?

Correct AnswerverifiedShow Answer

Construction workers at times face high rates of unemployment because their work is both seasonal and subject to wide swings over the business cycle.

Correct AnswerverifiedShow Answer

A worker would be hurt least by inflation when the

Correct AnswerverifiedShow Answer

Unanticipated inflation creates problems for society because

Correct AnswerverifiedShow Answer

In times of rapid inflation,

Correct AnswerverifiedShow Answer

The labor force participation rate climbs with education.

Correct AnswerverifiedShow Answer

Structural unemployment refers to unemployment that results from

Correct AnswerverifiedShow Answer

Which is true of cost-push inflation?

Correct AnswerverifiedShow Answer

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