question
Which of the following would be considered unemployed?
- Sarah, a stay-at-home mom who earned nearly $80,000 per year in her previous job
- Mark, laid off from his job as a bricklayer, returned to school full-time.
- Tim, a 13-year old high school student, is looking for a part-time job.
- Janice, a senior in college, started job hunting early in the hope that she would have secured a job by the time she graduates in May.
- Sarah, a stay-at-home mom who earned nearly $80,000 per year in her previous job
- Mark, laid off from his job as a bricklayer, returned to school full-time.
- Tim, a 13-year old high school student, is looking for a part-time job.
- Janice, a senior in college, started job hunting early in the hope that she would have secured a job by the time she graduates in May.
answer
Janice, a senior in college, started job hunting early in the hope that she would have secured a job by the time she graduates in May.
question
A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. What is this country's unemployment rate?
- 25%
- 10%
- 40%
- 16.7%
- 25%
- 10%
- 40%
- 16.7%
answer
25%
question
A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. What is this country's labor force participation rate?
- 66.7%
- 83.3%
- 50%
- 66.7%
- 66.7%
- 83.3%
- 50%
- 66.7%
answer
66.7%
question
Which of the following individuals can be counted as unemployed?
- Jason and Jill, who have not looked for work for the last 2 years.
- Jean, who left her job to search for a higher-paying position
- Hannah and Harold, who are serving time for armed robbery
- Stewart and Susan, who are currently housed in a mental institution.
- Jason and Jill, who have not looked for work for the last 2 years.
- Jean, who left her job to search for a higher-paying position
- Hannah and Harold, who are serving time for armed robbery
- Stewart and Susan, who are currently housed in a mental institution.
answer
Jean, who left her job to search for a higher-paying position
question
The presence of discouraged workers causes the measured unemployment rate to be:
- either overstated, understated, or correctly stated.
- overstated
- understated
- correctly
- either overstated, understated, or correctly stated.
- overstated
- understated
- correctly
answer
understated
question
Discouraged workers are workers who have:
- given up looking for work and are not available for work
- given up looking for work but still like a job
- not given up looking for work and still would like a job
- not given up looking for work but are not available for work
- given up looking for work and are not available for work
- given up looking for work but still like a job
- not given up looking for work and still would like a job
- not given up looking for work but are not available for work
answer
given up looking for work but still like a job
question
The short-term unemployment caused by the ordinary difficulties of matching employee to employer is called:
- frictional unemployment
- seasonal unemployment
- cyclical unemployment
- structural unemployment
- frictional unemployment
- seasonal unemployment
- cyclical unemployment
- structural unemployment
answer
frictional unemployment
question
Oil shocks, the shift from manufacturing to service jobs, and the use of new technologies are reasons for _______ unemployment.
- frictional
- cyclical
- permanent
- structural
- frictional
- cyclical
- permanent
- structural
answer
structural
question
A worker repairing VHS cassette-tape players was laid off because most of his customers have started using DVD players. This worker is now:
- a discouraged worker
- cyclically unemployed.
- frictionally unemployed
- structurally unemployed.
- a discouraged worker
- cyclically unemployed.
- frictionally unemployed
- structurally unemployed.
answer
structurally unemployed
question
Which of the following does NOT contribute directly to the persistence of structural unemployment?
- unions
- employment protection laws
- work tests
- unemployment benefits
- unions
- employment protection laws
- work tests
- unemployment benefits
answer
work tests
question
Active labor market policies:
- state that an employee may quit and an employer may fire an employee at any time and for any reason.
- enforce collective bargaining over wages, benefits, and working conditions
- cause riots in France
- focus on getting unemployed workers back to work
- state that an employee may quit and an employer may fire an employee at any time and for any reason.
- enforce collective bargaining over wages, benefits, and working conditions
- cause riots in France
- focus on getting unemployed workers back to work
answer
focus on getting unemployed workers back to work
question
If a national government improves its unemployment benefits, its unemployment rate will most likely:
- follow the global trend, regardless of national policy
- decrease
- remain the same
- increase
- follow the global trend, regardless of national policy
- decrease
- remain the same
- increase
answer
increase
question
(Figure: Labor Markets) Refer to the figure. What is the unemployment rate in this market as a result of the implementation of a $10 minimum wage?
- 25%
- 100%
- 50%
- 20%
- 25%
- 100%
- 50%
- 20%
answer
50%
question
(Figure: Labor Supply and Demand) Refer to the figure. What is the quantity of labor that is unemployed as a result of the labor union's action to increase its wage demands to $11 an hour?
- 2,700
- 1,800
- 700
- 1,100
- 2,700
- 1,800
- 700
- 1,100
answer
1,800
question
Unemployment correlated with the ups and downs of the business cycle is called:
- temporary unemployment
- cyclical unemployment
- frictional unemployment
- structural unemployment
- temporary unemployment
- cyclical unemployment
- frictional unemployment
- structural unemployment
answer
cyclical unemployment
question
If the average price level rises from 120 in year 1 to 130 in year 2, the inflation rate between years 1 and 2 will be:
- 7.69%
- 10%
- 9.23%
- 8.33%
- 7.69%
- 10%
- 9.23%
- 8.33%
answer
8.33%
question
The consumer price index measures the prices of:
- intermediate as well as final goods
- introductory, intermediate, and final goods
- all final goods brought by American consumers.
- a basket of goods bought by a typical American consumer
- intermediate as well as final goods
- introductory, intermediate, and final goods
- all final goods brought by American consumers.
- a basket of goods bought by a typical American consumer
answer
a basket of goods bought by a typical American consumer
question
(Table: Consumer Price Index) Refer to the CPI values in the table for the years 2005 to 2010. In which year(s) did the country experience disinflation?
- 2009 only
- both 2007 and 2009
- 2007 only
- neither 2007 nor 2009
- 2009 only
- both 2007 and 2009
- 2007 only
- neither 2007 nor 2009
answer
both 2007 and 2009
question
(Table: Consumer Price Index) Refer to the CPI values in the table for the years 2005 to 2010. In which year(s) did the country experience deflation?
- neither 2007 nor 2009
- 2007 only
- 2009 only
- both 2007 and 2009
- neither 2007 nor 2009
- 2007 only
- 2009 only
- both 2007 and 2009
answer
2009 only
question
If you earned $10-an-hour in 2005 when the CPI was 100, and you earn $11-an-hour today when the CPI is 120, then your real wage rate has _____ since 2005
- decreased
- increased 20%
- remained the same
- increased 10%
- decreased
- increased 20%
- remained the same
- increased 10%
answer
decreased
question
Suppose the money supply equals $100 million, the average price level equals 40, and real GDP equals $50 million. Given this information, the velocity of money equals:
- 125
- 80
- 100
- 20
- 125
- 80
- 100
- 20
answer
20
question
If the velocity of money and real GDP are fixed, then the quantity theory of money implies that the price-level will:
- increase at the same rate as the growth in the money supply
- increase at a higher rate than the growth in the money supply
- increase at a lower rate than the growth in the money supply
- be unrelated to the growth in the money supply
- increase at the same rate as the growth in the money supply
- increase at a higher rate than the growth in the money supply
- increase at a lower rate than the growth in the money supply
- be unrelated to the growth in the money supply
answer
increase at the same rate as the growth in the money supply
question
Nobel Prize- winning economist Milton Friedman says, "Inflation is always and everywhere a ________"
- velocity phenomenon
- risky phenomenon
- monetary phenomenon
- growth phenomenon
- velocity phenomenon
- risky phenomenon
- monetary phenomenon
- growth phenomenon
answer
monetary phenomenon
question
With respect to real output, in the long run, money is:
- expansionary
- neutral
- temporary
- velocity
- expansionary
- neutral
- temporary
- velocity
answer
neutral
question
The primary reason we think of inflation as bad even when wage rises with it is that it:
- distorts the information delivered by prices
- increases the velocity of money
- leads to lower real wages
- makes things more expensive for consumers
- distorts the information delivered by prices
- increases the velocity of money
- leads to lower real wages
- makes things more expensive for consumers
answer
distorts the information delivered by prices
question
Jordan loaned Taylor $1,200 on March 15, 2009. Taylor returned $1,260 on March 14, 2010. Inflation was 2% over the 1-year period. What is the real interest rate that Taylor paid?
- 3%
- 5%
- 2%
- 7%
- 3%
- 5%
- 2%
- 7%
answer
3%
question
Which of the following correctly represents unexpected disinflation?
- Eπ = π
- Eπ > V
- Eπ < π
- Eπ > i
- Eπ = π
- Eπ > V
- Eπ < π
- Eπ > i
answer
Eπ> π
question
Debt monetization means that a government pays off its debt by:
- lowering inflation
- borrowing from foreigners
- raising tax revenues
- increasing the money supply
- lowering inflation
- borrowing from foreigners
- raising tax revenues
- increasing the money supply
answer
increasing the money supply
question
The term "business fluctuations" refers to:
- the different stages of a product cycle
- changes in the prices of goods and services over time
- movement in real GDP around its long-term trend.
- the trend in real GDP over a long period of time
- the different stages of a product cycle
- changes in the prices of goods and services over time
- movement in real GDP around its long-term trend.
- the trend in real GDP over a long period of time
answer
movement in real GDP around its long-term trend
question
If spending in an economy increases by 3% and real GDP increases by 1%, the result will be:
- a positive supply shock
- a recession
- inflation
- war
- a positive supply shock
- a recession
- inflation
- war
answer
inflation
question
If spending growth is 6% and inflation is also 6%, this means that:
- more money is chasing an increased number of goods
- economic growth was 12%
- a positive supply shock occurred
- real GDP did not increase
- more money is chasing an increased number of goods
- economic growth was 12%
- a positive supply shock occurred
- real GDP did not increase
answer
real GDP did not increase
question
Consider the three aggregate demand curves shown in the graph. Movement from Point A to Point D represents:
- an increase in real GDP growth, but not spending growth.
- an increase in inflation, but not spending growth.
- an increase in spending growth from 4% to 6%.
- an increase in spending growth from 2% to 3%.
- an increase in real GDP growth, but not spending growth.
- an increase in inflation, but not spending growth.
- an increase in spending growth from 4% to 6%.
- an increase in spending growth from 2% to 3%.
answer
an increase in spending growth from 4% to 6%.
question
Which of the following combinations would be on an aggregate demand curve with a spending growth rate of 6%?
- inflation rate of 6%, real growth rate of 3%.
- inflation rate of 2%, real growth rate of 8%.
- inflation rate of 3%, real growth rate of 6%.
- inflation rate of 8%, real growth rate of -2%.
- inflation rate of 6%, real growth rate of 3%.
- inflation rate of 2%, real growth rate of 8%.
- inflation rate of 3%, real growth rate of 6%.
- inflation rate of 8%, real growth rate of -2%.
answer
inflation rate of 8%, real growth rate of -2%.
question
For an aggregate demand curve M of= 10% and v of= 0%, if inflation is 6%, then real growth is:
- 4%
- -4%
- -6%
- 16%
- 4%
- -4%
- -6%
- 16%
answer
4%
question
According to the quantity theory of money, if both the growth rate of the money supply and the velocity of money are fixed, then a higher inflation rate means:
- a higher or lower real growth rate, depending on the specific growth of the money supply.
- a lower real growth rate.
- no change in the real growth rate.
- a higher real growth rate.
- a higher or lower real growth rate, depending on the specific growth of the money supply.
- a lower real growth rate.
- no change in the real growth rate.
- a higher real growth rate.
answer
a lower real growth rate
question
If the growth rate of the money supply in an economy is 5%, the growth rate of output is 2%, and the velocity of money is constant, what will the inflation rate in this economy be?
- 7%
- 3%
- 2%
- 5%
- 7%
- 3%
- 2%
- 5%
answer
3%
question
If v of= 4%, P of= 3%, and Yr = 2%, M must equal:
- 1%
- 2%
- 7%
- 6%
- 1%
- 2%
- 7%
- 6%
answer
1%
question
The primary purpose of the AD-AS model is to explain:
- long-term economic growth
- business fluctuations
- trends in output
- the steady-state output
- long-term economic growth
- business fluctuations
- trends in output
- the steady-state output
answer
business fluctuations
question
(Figure: Long-Run Aggregate Supply Curves) Which of the following can explain the shift of the long-run aggregate supply curve from A to B in the figure?
- war
- development of new technology
- negative supply shock
- oil crisis
- war
- development of new technology
- negative supply shock
- oil crisis
answer
development of new technology
question
(Figure: Long-Run Aggregate Supply Curves) Which of the following can explain the shift of the long-run aggregate supply curve from A to C in the figure?
- increase in oil supply
- an increase in the nation's factors of production
- development of new technology
- negative supply shock
- increase in oil supply
- an increase in the nation's factors of production
- development of new technology
- negative supply shock
answer
negative supply shock
question
An increase in inflation will cause the long-run aggregate supply curve to:
- shift randomly
- shift outward
- shift inward
- not shift at all
- shift randomly
- shift outward
- shift inward
- not shift at all
answer
not shift at all
question
In the basic model with an AD and LRAS curve only, if spending growth is 10% and the Solow growth rate falls from 5% to 3%, then inflation will:
- decrease from 13% to 8%
- increase from 8% to 13%
- decrease form 7% to 5%
- increase from 5% to 7%
- decrease from 13% to 8%
- increase from 8% to 13%
- decrease form 7% to 5%
- increase from 5% to 7%
answer
increase from 5% to 7%
question
During the Internet revolution in the late 1990s, a positive real shock shifted the long-run aggregate supply curve to the right, which led to:
- an increase in both real growth rate and the inflation rate.
- an increase real growth rate and decrease in the inflation rate.
- a decrease in real growth rate and increase in the inflation rate.
- a decrease in both real growth rate and the inflation rate.
- an increase in both real growth rate and the inflation rate.
- an increase real growth rate and decrease in the inflation rate.
- a decrease in real growth rate and increase in the inflation rate.
- a decrease in both real growth rate and the inflation rate.
answer
an increase in real growth rate and decrease in the inflation rate
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