Question 1

The unemployment rate does not reflect the true extent 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 discouraged workers​
C)  Discouraged workers and the frictionally unemployed​
D)  The frictionally unemployed and the structurally unemployed​
E)  The cyclically unemployed and the frictionally unemployed​F) None of the above
G) C) and D)

Question 2

Government fiscal policies that attempt to stimulate aggregate demand are often aimed at reducing cyclical unemployment.​

Accepted Answer

A) True 
 B)False

Question 3

In the market for loanable funds,the equilibrium interest rate is determined by the intersection of:​

Accepted Answer

A)  the downward-sloping supply curve for loanable funds and the upward-sloping demand curve for loanable funds.
B)  the upward-sloping supply curve for loanable funds and the downward-sloping demand curve for loanable funds.
C)  the downward-sloping supply curve of loanable funds and the horizontal demand curve for loanable funds.
D)  the downward-sloping supply curve of loanable funds and the vertical demand curve for loanable funds.
E)  the upward-sloping supply curve for loanable funds and the horizontal demand curve for loanable funds.F) All of the above
G) A) and D)

Question 4

The inflation experienced in the United States during the late 1960s as a result of the spending on the Vietnam War is an example of:​

Accepted Answer

A)  hyperinflation.
B)  demand-pull inflation.
C)  disinflation.
D)  cost-push inflation.
E)  cyclical inflation.F) A) and D)
G) B) and E)

Question 5

Since 1980,_____ has experienced deflation.​

Accepted Answer

A)  the U.S.
B)  France​
C)  Germany​
D)  Japan​
E)  Italy​F) B) and D)
G) None of the above

Question 6

Hyperinflation refers to a period of extremely erratic inflation rates.​

Accepted Answer

A) True 
 B)False

Question 7

The real interest rate can be negative.​

Accepted Answer

A) True 
 B)False  True

Question 8

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 in an employment contract.
E)  government increases the level of social security retirement benefits to correct for the effects of unanticipated inflation.F) A) and E)
G) A) and B)

Question 9

The view that union wage demands may be a source of inflation would be best associated with cost-push inflation.​

Accepted Answer

A) True 
 B)False

Question 10

Tony lent Dave $1,000 for one year with the understanding that Dave would repay $1,070.If the actual inflation rate was 7 percent,then the real rate of interest Tony received is _____.​

Accepted Answer

A)  14 percent
B)  7 percent​
C)  4 percent​
D)  0 percent​
E)  −7 percent​F) A) and E)
G) All of the above

Question 11

Suppose the price levels in an economy in four successive years are 100,120,133,and 140.Which of the following is true in such a case?​

Accepted Answer

A)  The economy is experiencing hyperinflation.
B)  The economy is experiencing deflation.
C)  The economy is experiencing inflation.
D)  The economy is experiencing increasing inflation.
E)  The economy is experiencing disinflation.F) C) and D)
G) A) and E)

Question 12

The type of unemployment most likely to be experienced by a touring professional golfer is:​

Accepted Answer

A)  frictional unemployment.
B)  structural unemployment.
C)  seasonal unemployment.
D)  cyclical unemployment.
E)  discouraged-worker unemployment.F) A) and E)
G) C) and D)

Question 13

If the expected inflation rate is 4 percent and the nominal interest rate is 9 percent,the expected real interest rate is _____.​

Accepted Answer

A)  13 percent
B)  −5 percent
C)  9 percent
D)  −13 percent
E)  5 percentF) A) and B)
G) C) and E) E

Question 14

Which of the following people would be counted as employed?​

Accepted Answer

A)  A retired naval officer
B)  A high school student​
C)  A stay-at-home father​
D)  A teenager who has given up looking for work after a year of trying​
E)  A ski instructor who is working during the summer​F) A) and D)
G) A) and E)

Question 15

The consumer price index measures:​

Accepted Answer

A)  the cost of all goods and services produced in the U.S.economy.
B)  the average change over time in the selling prices received by domestic producers for their output.
C)  the cost of a fixed market basket of consumer goods and services produced in the U.S.economy.
D)  the ratio of an economy's nominal GDP to its real GDP.
E)  the income distribution of an economy.F) A) and B)
G) None of the above

Question 16

The best example of a frictionally unemployed worker is one who:​

Accepted Answer

A)  has been looking for work for 27 weeks or longer.
B)  is laid off during a recessionary period in the economy.
C)  is in the process of voluntarily switching jobs.
D)  is discouraged and not actively seeking work.
E)  cannot find a job that matches with his skills.F) A) and B)
G) A) and E)

Question 17

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

Accepted Answer

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

Question 18

The nominal interest rate:​

Accepted Answer

A)  varies directly with the rate of expected inflation in an economy.
B)  is the interest rate expressed in dollars of constant purchasing power.
C)  equals the difference between the real interest rate and the inflation rate.
D)  is the basis for decisions taken by the lenders and the borrowers in an economy.
E)  is the percentage increase in the average price level from one year to the next.F) A) and E)
G) A) and D)

Question 19

An increase in the interest rate will increase the demand for loanable funds.​

Accepted Answer

A) True 
 B)False

Question 20

Which type of unemployment is most likely to help an economy become more efficient?​

Accepted Answer

A)  Cyclical unemployment
B)  Voluntary unemployment​
C)  Seasonal unemployment​
D)  Frictional unemployment​
E)  Underemployment​F) B) and C)
G) A) and E) D

Exam 7: Unemployment and Inflation

The unemployment rate does not reflect the true extent of the unemployment problem.Which of the following groups is not counted as unemployed in the official unemployment statistics?​

Correct AnswerverifiedShow Answer

Government fiscal policies that attempt to stimulate aggregate demand are often aimed at reducing cyclical unemployment.​

Correct AnswerverifiedShow Answer

In the market for loanable funds,the equilibrium interest rate is determined by the intersection of:​

Correct AnswerverifiedShow Answer

The inflation experienced in the United States during the late 1960s as a result of the spending on the Vietnam War is an example of:​

Correct AnswerverifiedShow Answer

Since 1980,_____ has experienced deflation.​

Correct AnswerverifiedShow Answer

Hyperinflation refers to a period of extremely erratic inflation rates.​

Correct AnswerverifiedShow Answer

The real interest rate can be negative.​

Correct AnswerverifiedTrue

A worker would be hurt least by inflation when the:​

Correct AnswerverifiedShow Answer

The view that union wage demands may be a source of inflation would be best associated with cost-push inflation.​

Correct AnswerverifiedShow Answer

Tony lent Dave $1,000 for one year with the understanding that Dave would repay $1,070.If the actual inflation rate was 7 percent,then the real rate of interest Tony received is _____.​

Correct AnswerverifiedShow Answer

Suppose the price levels in an economy in four successive years are 100,120,133,and 140.Which of the following is true in such a case?​

Correct AnswerverifiedShow Answer

The type of unemployment most likely to be experienced by a touring professional golfer is:​

Correct AnswerverifiedShow Answer

If the expected inflation rate is 4 percent and the nominal interest rate is 9 percent,the expected real interest rate is _____.​

Correct AnswerverifiedE

Which of the following people would be counted as employed?​

Correct AnswerverifiedShow Answer

The consumer price index measures:​

Correct AnswerverifiedShow Answer

The best example of a frictionally unemployed worker is one who:​

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The nominal interest rate:​

Correct AnswerverifiedShow Answer

An increase in the interest rate will increase the demand for loanable funds.​

Correct AnswerverifiedShow Answer

Which type of unemployment is most likely to help an economy become more efficient?​

Correct AnswerverifiedD

The unemployment rate does not reflect the true extent of the unemployment problem.Which of the following groups is not counted as unemployed in the official unemployment statistics?

Correct Answer
verified

Government fiscal policies that attempt to stimulate aggregate demand are often aimed at reducing cyclical unemployment.

Correct Answer
verified

In the market for loanable funds,the equilibrium interest rate is determined by the intersection of:

Correct Answer
verified

The inflation experienced in the United States during the late 1960s as a result of the spending on the Vietnam War is an example of:

Correct Answer
verified

Since 1980,_____ has experienced deflation.

Correct Answer
verified

Hyperinflation refers to a period of extremely erratic inflation rates.

Correct Answer
verified

The real interest rate can be negative.

Correct Answer
verified
True

A worker would be hurt least by inflation when the:

Correct Answer
verified

The view that union wage demands may be a source of inflation would be best associated with cost-push inflation.

Correct Answer
verified

Tony lent Dave $1,000 for one year with the understanding that Dave would repay $1,070.If the actual inflation rate was 7 percent,then the real rate of interest Tony received is _____.

Correct Answer
verified

Suppose the price levels in an economy in four successive years are 100,120,133,and 140.Which of the following is true in such a case?

Correct Answer
verified

The type of unemployment most likely to be experienced by a touring professional golfer is:

Correct Answer
verified

If the expected inflation rate is 4 percent and the nominal interest rate is 9 percent,the expected real interest rate is _____.

Correct Answer
verified
E

Which of the following people would be counted as employed?

Correct Answer
verified

The consumer price index measures:

Correct Answer
verified

The best example of a frictionally unemployed worker is one who:

Correct Answer
verified

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

Correct Answer
verified

The nominal interest rate:

Correct Answer
verified

An increase in the interest rate will increase the demand for loanable funds.

Correct Answer
verified

Which type of unemployment is most likely to help an economy become more efficient?

Correct Answer
verified
D