question
A general rule is that the economy is experiencing a recession when:
answer
Real GDP declines for at least six months.
question
A discouraged worker:
answer
Unemployed and gave up looking for work.
question
Frictional unemployment:
answer
Short periods of unemployment needed to match jobs with job seekers.
question
Structural unemployment:
answer
Unemployment caused by the mismatch of skills and workers out of work and skill required for existing job opportunities.
question
An increase in unemployment associated with a recession is called:
answer
Cyclical unemployment
question
Which of the following is true?
A) The GPA gap is different between full-employment real GDP and actual GDP.
B) We desire economic growth because it increases the nation's standard of living.
C) economic growth is measured by the annual percentage increase in a nations real GDP.
D) Discouraged workers are a reason critics say the unemployment rate is understated.
E) All other answers are correct.
A) The GPA gap is different between full-employment real GDP and actual GDP.
B) We desire economic growth because it increases the nation's standard of living.
C) economic growth is measured by the annual percentage increase in a nations real GDP.
D) Discouraged workers are a reason critics say the unemployment rate is understated.
E) All other answers are correct.
answer
E)
question
Index of leading indicators:
answer
The governments chief forecasting for the business cycle
question
Official unemployment rate of 10% means:
answer
One of every 10 people in the civilian labor force is currently unemployed.
question
Inflation is measured by a percentage increase in:
answer
The consumer price index (CPI).
question
Which of the following groups benefit from inflation?
Borrowers
Savers
Landlords
Lenders
Borrowers
Savers
Landlords
Lenders
answer
Borrowers
question
If the consumer price index (CPI) in 2001 was 200 and the CPI in 2002 was 215, the rate of inflation was:
answer
7.5% (215-200)/200
question
Situation bias in the CPI
answer
The price of bananas rise over time, consumers respond by buying oranges.
question
Real interest rate =
answer
Nominal interest rate - inflation rate
question
If the inflation rate exceeds the nominal rate of interest:
The real interest rate is negative
The lenders lose
Savors lose
The real interest rate is negative
The lenders lose
Savors lose
answer
All of the answers are correct
question
What can create demand-pull inflation?
answer
Excessive aggregate spending.
question
Cost-push inflation is due to:
Labor cost increases
Energy cost increases
Raw material cost increases
Labor cost increases
Energy cost increases
Raw material cost increases
answer
All of the answers are correct.
question
Demand-pull inflationary pressure increases as the economy approaches full employment.
A) True
B) False
A) True
B) False
answer
True.
question
A CPI of 110 for a given year indicates that prices of that year are 10% higher than prices of the base year.
A) True
B) False
A) True
B) False
answer
True.
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