Question 1

Inflation is:​

Accepted Answer

A)  a reduction in everyone's standard of living.
B)  a rise in the real prices of all goods and services.
C)  a general and continuing rise in the money prices of goods and services.
D)  a continuing rise in everyone's standard of living.
E)  an increase in the value of money compared to the value of goods.F) All of the above
G) A) and B)

Question 2

Which of the following decades was characterized by the highest inflation rate in the U.S.?​

Accepted Answer

A)  1920s
B)  1930s​
C)  1950s​
D)  1970s​
E)  1960s​F) C) and E)
G) A) and C)

Question 3

Which of the following does not exist when an economy is operating at full employment?​

Accepted Answer

A)  An unemployment rate of 5 percent or 6 percent
B)  Seasonal unemployment​
C)  Structural unemployment​
D)  Cyclical unemployment​
E)  Frictional unemployment​F) A) and B)
G) A) and C)

Question 4

Suppose there is a 5 percent increase in the nominal wages of workers in an economy.The annual rate of inflation in the economy is about 2 percent.Which of the following is true in this case?​

Accepted Answer

A)  Real wage would fall by about 10 percent.
B)  Real wage would increase by about 20 percent.
C)  Real wage would fall by about 25 percent.
D)  Real wage would increase by about 50 percent.
E)  Real wage would increase by about 3 percent.F) A) and D)
G) B) and C)

Question 5

During periods when the inflation rate fluctuates widely,_____.​

Accepted Answer

A)  the nominal interest rate and the real interest rate are identical
B)  all money prices rise at the same rate,causing relative prices to increase​
C)  suppliers link the selling prices of their goods to the overall inflation rate​
D)  uncertainty about changes in relative prices causes a decrease in economic efficiency​
E)  all money prices increase at the same rate,leaving relative prices constant​F) A) and E)
G) A) and B)

Question 6

Ginger quits her job as personal secretary to the Vice President of HR Technologies because she cannot handle the stress.It takes her three weeks to find a job as a receptionist at Mariam Hotels and Resorts.Over these three weeks,she would be considered frictionally unemployed.​

Accepted Answer

A) True 
 B)False

Question 7

A decrease in the interest rate,other things constant,will:​

Accepted Answer

A)  shift the supply of loanable funds curve to the left.
B)  shift the supply of loanable funds curve to the right.
C)  decrease the quantity of loanable funds demanded.
D)  decrease the quantity of loanable funds supplied.
E)  shift the demand for loanable funds curve to the right.F) C) and D)
G) A) and B)

Question 8

A recent college graduate who is looking for her first job would be considered _____.​

Accepted Answer

A)  a discouraged worker
B)  underemployed​
C)  overemployed​
D)  unemployed​
E)  not in the labor force​F) A) and D)
G) B) and E)

Question 9

The higher the anticipated inflation rate,_____.​

Accepted Answer

A)  the more workers will ask for in wages and the more firms will agree to pay
B)  the more workers will ask for in wages and the less firms will agree to pay​
C)  the less workers will ask for in wages and the less firms will agree to pay​
D)  the higher the real wage increases offered by firms​
E)  the higher the real wage increases asked for by workers​F) A) and B)
G) B) and D)

Question 10

Frictional unemployment refers to unemployment that is a result of:​

Accepted Answer

A)  a mismatch of skills.
B)  being out of work 27 weeks or longer.
C)  job search.
D)  seasonal decreases in demand for labor.
E)  a recession in the economy.F) D) and E)
G) C) and E)

Question 11

Which of the following is true about inflation?​

Accepted Answer

A)  Inflation promotes social harmony by uniting people against the government.
B)  Inflation is more damaging if it is unanticipated.
C)  Accurate anticipation of inflation is possible for everyone who is well informed about economic events.
D)  Those who lend money at a rate above the rate of inflation suffer economic losses.
E)  If people accurately anticipate inflation,their actions will prevent it.F) C) and E)
G) A) and C)

Question 12

Which of the following will most likely qualify for unemployment compensation benefits?​

Accepted Answer

A)  A new college graduate who cannot find work despite a desperate job search
B)  An unemployed coal miner who has been receiving benefits for the past six months​
C)  A former retail clerk who quit her job because the boss was too demanding​
D)  A spot welder who has just gotten his first "pink slip" in the mail after ten years of continuous employment
E)  An accountant who was fired from his last position for drinking alcohol on the jobF) All of the above
G) A) and D)

Question 13

The nominal interest rate is determined in the market for loanable funds.​

Accepted Answer

A) True 
 B)False

Question 14

When an economy is operating at full employment,_____.​

Accepted Answer

A)  structural unemployment does not exist
B)  cyclical unemployment does not exist​
C)  the unemployment rate is zero​
D)  seasonal unemployment does not exist​
E)  the number of discouraged workers is zero​F) B) and D)
G) A) and C)

Question 15

Anne is an accountant who lost her job in the last recession and has given up looking for work after an unsuccessful job search.Which of the following is true in this case?​

Accepted Answer

A)  She is a discouraged worker.
B)  She is underemployed.
C)  This is an example of cyclical unemployment.
D)  This is an example of seasonal unemployment.
E)  She is overemployed.F) A) and E)
G) A) and D)

Question 16

The impact of _____ unemployment is removed from official monthly unemployment figures.​

Accepted Answer

A)  cyclical
B)  structural​
C)  seasonal​
D)  frictional​
E)  involuntary​F) A) and C)
G) D) and E)

Question 17

Suppose there is a 3 percent increase in the nominal wages of workers in an economy.The annual rate of inflation in the economy is about 6 percent.Which of the following is true in this case?​

Accepted Answer

A)  Real wages would fall by about 3 percent.
B)  Real wages would increase by about 20 percent.
C)  Real wages would fall by about 25 percent.
D)  Real wages would increase by about 50 percent.
E)  Real wages would increase by about 10 percent.F) A) and D)
G) A) and E)

Question 18

If the nominal interest rate is 5 percent and there is no inflation,_____.​

Accepted Answer

A)  the real interest rate exceeds 5 percent
B)  the real interest rate is less than 5 percent​
C)  the real interest rate is 5 percent​
D)  there is not enough information to determine the real interest rate​
E)  the real interest rate is zero​F) None of the above
G) A) and D)

Question 19

The benefits paid by the largest pension program in the United States are:​

Accepted Answer

A)  not adjusted for changes in the price level.
B)  adjusted for changes in the price level.
C)  revised every five years.
D)  adjusted for changes in the nominal rate of interest.
E)  adjusted for changes in the real rate of interest.F) None of the above
G) All of the above

Question 20

"Discouraged workers" comprise the percentage of those in the:​

Accepted Answer

A)  labor force who are employed and are seeking employment.
B)  labor force who have chosen early retirement because they dislike their work.
C)  adult population who want to be employed but have given up the search for a job.
D)  labor force who are looking for a job but cannot find one.
E)  adult population who are in the labor force.F) A) and C)
G) C) and D)

Exam 7: Unemployment and Inflation

Ginger quits her job as personal secretary to the Vice President of HR Technologies because she cannot handle the stress.It takes her three weeks to find a job as a receptionist at Mariam Hotels and Resorts.Over these three weeks,she would be considered frictionally unemployed.​

Correct AnswerverifiedShow Answer

Which of the following will most likely qualify for unemployment compensation benefits?​

Correct AnswerverifiedShow Answer

Inflation is:​

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The nominal interest rate is determined in the market for loanable funds.​

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The benefits paid by the largest pension program in the United States are:​

Correct AnswerverifiedShow Answer

Anne is an accountant who lost her job in the last recession and has given up looking for work after an unsuccessful job search.Which of the following is true in this case?​

Correct AnswerverifiedShow Answer

A recent college graduate who is looking for her first job would be considered _____.​

Correct AnswerverifiedShow Answer

When an economy is operating at full employment,_____.​

Correct AnswerverifiedShow Answer

A decrease in the interest rate,other things constant,will:​

Correct AnswerverifiedShow Answer

Suppose there is a 5 percent increase in the nominal wages of workers in an economy.The annual rate of inflation in the economy is about 2 percent.Which of the following is true in this case?​

Correct AnswerverifiedShow Answer

"Discouraged workers" comprise the percentage of those in the:​

Correct AnswerverifiedShow Answer

Frictional unemployment refers to unemployment that is a result of:​

Correct AnswerverifiedShow Answer

Which of the following does not exist when an economy is operating at full employment?​

Correct AnswerverifiedShow Answer

If the nominal interest rate is 5 percent and there is no inflation,_____.​

Correct AnswerverifiedShow Answer

Which of the following decades was characterized by the highest inflation rate in the U.S.?​

Correct AnswerverifiedShow Answer

The higher the anticipated inflation rate,_____.​

Correct AnswerverifiedShow Answer

The impact of _____ unemployment is removed from official monthly unemployment figures.​

Correct AnswerverifiedShow Answer

Which of the following is true about inflation?​

Correct AnswerverifiedShow Answer

During periods when the inflation rate fluctuates widely,_____.​

Correct AnswerverifiedShow Answer

Suppose there is a 3 percent increase in the nominal wages of workers in an economy.The annual rate of inflation in the economy is about 6 percent.Which of the following is true in this case?​

Correct AnswerverifiedShow Answer

Ginger quits her job as personal secretary to the Vice President of HR Technologies because she cannot handle the stress.It takes her three weeks to find a job as a receptionist at Mariam Hotels and Resorts.Over these three weeks,she would be considered frictionally unemployed.

Correct Answer
verified

Which of the following will most likely qualify for unemployment compensation benefits?

Correct Answer
verified

Inflation is:

Correct Answer
verified

The nominal interest rate is determined in the market for loanable funds.

Correct Answer
verified

The benefits paid by the largest pension program in the United States are:

Correct Answer
verified

Anne is an accountant who lost her job in the last recession and has given up looking for work after an unsuccessful job search.Which of the following is true in this case?

Correct Answer
verified

A recent college graduate who is looking for her first job would be considered _____.

Correct Answer
verified

When an economy is operating at full employment,_____.

Correct Answer
verified

A decrease in the interest rate,other things constant,will:

Correct Answer
verified

Suppose there is a 5 percent increase in the nominal wages of workers in an economy.The annual rate of inflation in the economy is about 2 percent.Which of the following is true in this case?

Correct Answer
verified

"Discouraged workers" comprise the percentage of those in the:

Correct Answer
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Frictional unemployment refers to unemployment that is a result of:

Correct Answer
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Which of the following does not exist when an economy is operating at full employment?

Correct Answer
verified

If the nominal interest rate is 5 percent and there is no inflation,_____.

Correct Answer
verified

Which of the following decades was characterized by the highest inflation rate in the U.S.?

Correct Answer
verified

The higher the anticipated inflation rate,_____.

Correct Answer
verified

The impact of _____ unemployment is removed from official monthly unemployment figures.

Correct Answer
verified

Which of the following is true about inflation?

Correct Answer
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During periods when the inflation rate fluctuates widely,_____.

Correct Answer
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Suppose there is a 3 percent increase in the nominal wages of workers in an economy.The annual rate of inflation in the economy is about 6 percent.Which of the following is true in this case?

Correct Answer
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