Ch 26 & 27 Economics Test - Assignment Essays

question

Which of the following best describes human capital?

answer

The training and education of workers

question

A contractionary supply shock would most likely result in

answer

a decrease in employment

question

Which of the following individuals is classified as unemployed?

answer

...

question

An industry historically used employees with specific skills. If this industry experiences technological advances that require new skills, there will most likely be

answer

Structural unemployment

question

Which of the following statements exemplifies the concept of structural unemployment?

answer

Workers are laid off because aggregate demand has declined

question

The unemployment rate measures the percentage of

answer

people in the labor force who do not have jobs

question

Which one of the following best explains how an economy could simultaneously experience high inflation and high unemployment?

answer

negative supply shocks cause factor prices to increase

question

What is the unemployment rate for the nation of Klein?

answer

...

question

Under which of the following conditions would consumer spending most likely increase?

answer

consumers' wealth is increased by changes in the stock market

question

A favorable supply shock, such as decrease in energy prices, is most likely to have which of the following short-run effects on the price level and output?

answer

Price level: Decrease
Output: Increase

question

The official unemployment rate is not an accurate indicator of actual unemployment is the economy because

answer

The official rate does not include persons who have given up looking for work

question

The classical economists argued that involuntary unemployment would be eliminated by

answer

self-correcting market forces stemming from flexible prices and wages

question

Okun's law predicts that when the actual unemployment rate exceeds the natural rate of unemployment by two percentage points the GDP gap will equal

answer

4% of the potential GDP

question

Which of the following would be true if the actual rate of inflation were less than the expected rate of inflation?

answer

People who borrowed funds at the nominal interest rate during this time period would lose

question

The annual inflation rate is expected to be 5 percent over the next 3 years. Robert Bearkat plans to take out a 3-year loan to purchase an automobile. If Robert decides not to take out the loan if the real interest rate exceeds 3 percent, the highest nominal interest rate he is willing to pay is

answer

8 percent

question

I. Quantity and quality of human and natural resources
II. Amount of capital goods available
III. Technology

answer

I, II, III

question

If the United States, business cycles have occurred against a backdrop of a long-run trend of

answer

Rising real GDP

question

Most economists agree that the immediate determinant of the volume of output and employment is the

answer

level of total spending

question

As it relates to economic growth, the term long-run trend refers to

answer

the long-term expansion or contraction of business activity that occurs over 50 or 100 years

question

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

answer

capital goods and durable consumer goods

question

The phase of the business cycle in which real GDP declines is called

answer

a recession

question

The phase of the business cycle in which real GDP is at a minimum is called

answer

the trough

question

The production of durable goods caries more than the production of non durable goods because

answer

durables purchases are postponable

question

In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?

answer

Expansion

question

Which of the following is not seen by economists as an underlying cause of business cycle fluctuations?

answer

All of these are identified as causes of business cycle changes

question

An unexpected increase in total spending will cause an increase in GDP

answer

if prices are sticky

question

Which of the following would most likely move the economy into a recession in the short term?

answer

The central bank printing less money than was anticipated

question

Refer to the given information. The labor force in Scoob is

answer

102 million

question

Refer to the given information. The unemployment rate in Scoob is

answer

6.9 percent

question

Refer to the given information. If the natural rate of unemployment in Scoob is 5 percent then

answer

cyclical unemployment is about 2 percent

question

The United States economy is considered to be at full employment when

answer

about 4-5 percent of the labor force is unemployed

question

Kara voluntarily quit her job as an insurance agent to return to school full time to earn an MBA degree. With degree in hand, she is now searching for a position in management Kara presently is

answer

frictionally unemployed

question

According to the Bureau of Labor Statistics, to be officially unemployed a person must

answer

be in the labor force

question

Alex works in his own home as a homemaker and full-time caretaker of his children. Officially, he is

answer

not in the labor force

question

Cyclical unemployment results from

answer

a deficiency of aggregate spending

question

Unemployment involving a mismatch of the skills of unemployed workers and the skills required for available jobs is called

answer

structural unemployment

question

Suppose there are 10 million part-time workers and 90 million full-time workers in an economy. Five million of the part-time workers switch to full-time work. As a result

answer

the official unemployment rate will remain unchanged

question

The government agency responsible for collecting and reporting unemployment data the

answer

Bureau of Labor Statistics

question

The unemployment rate is

answer

...

question

The GDP gap measures the difference between

answer

actual GDP and potential GDP

question

A large negative GDP gap implies

answer

a low rate of unemployment

question

The size of the negative GDP gap as a percent of potential GDP for the above economy is

answer

12 percent

question

For every 1 percentage point that the actual unemployment rate exceeds the natural rate, a 2 percentage point negative GDP gap occurs. This is a statement of:

answer

Okun's Law

question

Inflation means that:

answer

prices in the aggregate are rising, although some particular prices may be falling

question

If the consumer price index falls from 120 to 116 in a particular year, the economy has experienced

answer

deflation of 3.33 percent

question

The consumer price index was 177.1 in 2001 and 179.9 in 2002. Therefore, the rate of inflation in 2002 was

answer

1.6%

question

As applied to the price level, the "rule of 70" indicates that the number of years required for the price to double can be found by

answer

dividing the annual rate of inflation into "70.

question

Demand-pull inflation

answer

...

question

Inflation initiated by increases in wages or other resource prices is labeled

answer

cost-push inflation.

question

Real income is found by

answer

dividing nominal income by the price index (in hundredths)

question

In 2010 Tatum's nominal income rose by 4.6 percent and the price level rose by 1.6 percent. We can conclude that Tatum's real income

answer

rose by approximately 3 percent

1 of 51

question

Which of the following best describes human capital?

answer

The training and education of workers

question

A contractionary supply shock would most likely result in

answer

a decrease in employment

question

Which of the following individuals is classified as unemployed?

answer

...

question

An industry historically used employees with specific skills. If this industry experiences technological advances that require new skills, there will most likely be

answer

Structural unemployment

question

Which of the following statements exemplifies the concept of structural unemployment?

answer

Workers are laid off because aggregate demand has declined

question

The unemployment rate measures the percentage of

answer

people in the labor force who do not have jobs

question

Which one of the following best explains how an economy could simultaneously experience high inflation and high unemployment?

answer

negative supply shocks cause factor prices to increase

question

What is the unemployment rate for the nation of Klein?

answer

...

question

Under which of the following conditions would consumer spending most likely increase?

answer

consumers' wealth is increased by changes in the stock market

question

A favorable supply shock, such as decrease in energy prices, is most likely to have which of the following short-run effects on the price level and output?

answer

Price level: Decrease
Output: Increase

question

The official unemployment rate is not an accurate indicator of actual unemployment is the economy because

answer

The official rate does not include persons who have given up looking for work

question

The classical economists argued that involuntary unemployment would be eliminated by

answer

self-correcting market forces stemming from flexible prices and wages

question

Okun's law predicts that when the actual unemployment rate exceeds the natural rate of unemployment by two percentage points the GDP gap will equal

answer

4% of the potential GDP

question

Which of the following would be true if the actual rate of inflation were less than the expected rate of inflation?

answer

People who borrowed funds at the nominal interest rate during this time period would lose

question

answer

8 percent

question

I. Quantity and quality of human and natural resources
II. Amount of capital goods available
III. Technology

answer

I, II, III

question

If the United States, business cycles have occurred against a backdrop of a long-run trend of

answer

Rising real GDP

question

Most economists agree that the immediate determinant of the volume of output and employment is the

answer

level of total spending

question

As it relates to economic growth, the term long-run trend refers to

answer

the long-term expansion or contraction of business activity that occurs over 50 or 100 years

question

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

answer

capital goods and durable consumer goods

question

The phase of the business cycle in which real GDP declines is called

answer

a recession

question

The phase of the business cycle in which real GDP is at a minimum is called

answer

the trough

question

The production of durable goods caries more than the production of non durable goods because

answer

durables purchases are postponable

question

In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?

answer

Expansion

question

Which of the following is not seen by economists as an underlying cause of business cycle fluctuations?

answer

All of these are identified as causes of business cycle changes

question

An unexpected increase in total spending will cause an increase in GDP

answer

if prices are sticky

question

Which of the following would most likely move the economy into a recession in the short term?

answer

The central bank printing less money than was anticipated

question

Refer to the given information. The labor force in Scoob is

answer

102 million

question

Refer to the given information. The unemployment rate in Scoob is

answer

6.9 percent

question

Refer to the given information. If the natural rate of unemployment in Scoob is 5 percent then

answer

cyclical unemployment is about 2 percent

question

The United States economy is considered to be at full employment when

answer

about 4-5 percent of the labor force is unemployed

question

Kara voluntarily quit her job as an insurance agent to return to school full time to earn an MBA degree. With degree in hand, she is now searching for a position in management Kara presently is

answer

frictionally unemployed

question

According to the Bureau of Labor Statistics, to be officially unemployed a person must

answer

be in the labor force

question

Alex works in his own home as a homemaker and full-time caretaker of his children. Officially, he is

answer

not in the labor force

question

Cyclical unemployment results from

answer

a deficiency of aggregate spending

question

Unemployment involving a mismatch of the skills of unemployed workers and the skills required for available jobs is called

answer

structural unemployment

question

Suppose there are 10 million part-time workers and 90 million full-time workers in an economy. Five million of the part-time workers switch to full-time work. As a result

answer

the official unemployment rate will remain unchanged

question

The government agency responsible for collecting and reporting unemployment data the

answer

Bureau of Labor Statistics

question

The unemployment rate is

answer

...

question

The GDP gap measures the difference between

answer

actual GDP and potential GDP

question

A large negative GDP gap implies

answer

a low rate of unemployment

question

The size of the negative GDP gap as a percent of potential GDP for the above economy is

answer

12 percent

question

For every 1 percentage point that the actual unemployment rate exceeds the natural rate, a 2 percentage point negative GDP gap occurs. This is a statement of:

answer

Okun's Law

question

Inflation means that:

answer

prices in the aggregate are rising, although some particular prices may be falling

question

If the consumer price index falls from 120 to 116 in a particular year, the economy has experienced

answer

deflation of 3.33 percent

question

The consumer price index was 177.1 in 2001 and 179.9 in 2002. Therefore, the rate of inflation in 2002 was

answer

1.6%

question

As applied to the price level, the "rule of 70" indicates that the number of years required for the price to double can be found by

answer

dividing the annual rate of inflation into "70.

question

Demand-pull inflation

answer

...

question

Inflation initiated by increases in wages or other resource prices is labeled

answer

cost-push inflation.

question

Real income is found by

answer

dividing nominal income by the price index (in hundredths)

question

In 2010 Tatum's nominal income rose by 4.6 percent and the price level rose by 1.6 percent. We can conclude that Tatum's real income

answer

rose by approximately 3 percent

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