Question 1

The rate of unemployment is found by dividing the:

Accepted Answer

A)   number of people looking for work by the population.
B)   number of people not working but looking for work by the sum of the number of people not working but looking for work and the number of people employed.
C)   labor force by the number of people looking for work.
D)   unemployed and discouraged workers by the labor force.

Question 2

Unanticipated inflation:

Accepted Answer

A)   increases the value of money.
B)   decreases uncertainty about the future.
C)   reduces the real value of debt.
D)   helps lenders.

Question 3

Use the following to answer questions: 
-(Table: Labor Force Data)  Use Table: Labor Force Distribution. The unemployment rate is _____%.

Accepted Answer

A)   3.85
B)   10
C)   4.55
D)   6.75

Question 4

If the U.S. dollar were replaced with a "new dollar" at an exchange rate of 1 new dollar for 4 old dollars, then an hourly wage of $12 would become an hourly wage of 3 new dollars.

Accepted Answer

A) True 
 B)False

Question 5

Frictional and structural unemployment are a part of the natural rate of unemployment.

Accepted Answer

A) True 
 B)False

Question 6

If Jim's income is $80,000 and the price level is 4, then Jim's real income is:

Accepted Answer

A)   $20,000.
B)   $320,000.
C)   $84,000.
D)   $80,000.

Question 7

The percentage of the labor force that is unemployed is the:

Accepted Answer

A)   labor force participation rate.
B)   employment ratio.
C)   unemployment rate.
D)   natural employment rate.

Question 8

Suppose that Allison has an accounting degree, but she lost her job two months ago when her company merged with another firm. Allison hasn't been able to find another accounting job, so she has taken a part-time job as a sales clerk at a clothing store. The Bureau of Labor Statistics classifies Allison as:

Accepted Answer

A)   a marginally attached worker.
B)   a discouraged worker.
C)   underemployed.
D)   unemployed.

Question 9

If the actual unemployment rate is 7% and the cyclical unemployment rate is 2%, then the natural rate of unemployment is:

Accepted Answer

A)   2%.
B)   5%.
C)   7%.
D)   9%.

Question 10

Jim has a part-time job. He would prefer to have a full-time job but has been unable to find one. Jim is classified as:

Accepted Answer

A)   a discouraged worker.
B)   underemployed.
C)   unemployed.
D)   out of the labor force.

Question 11

Economists claim that the unemployment rate can understate the true level of unemployment because the ONLY group that is included is:

Accepted Answer

A)   discouraged workers.
B)   marginally attached workers.
C)   underemployed workers.
D)   workers without jobs who have looked for work in the past four weeks.

Question 12

Deflation is a:

Accepted Answer

A)   decrease in unemployment.
B)   decreasing aggregate price level.
C)   decline in wages.
D)   recession.

Question 13

Since 1960, the price level in the United States has decreased in most years.

Accepted Answer

A) True 
 B)False

Question 14

Costs of inflation do NOT include _____ costs.

Accepted Answer

A)   menu
B)   shoe-leather
C)   unit-of-account
D)   efficiency-wage

Question 15

Structural unemployment consists of people who are unemployed because of:

Accepted Answer

A)   temporary changes in jobs.
B)   there being more labor demanded than there is labor supplied.
C)   the time it takes for employers and workers to find each other.
D)   there being more job hunters than there are jobs.

Question 16

If the labor force becomes younger, the natural rate of unemployment will fall.

Accepted Answer

A) True 
 B)False

Question 17

The severe inflation in Israel during the mid-1980s was due to a war, an unstable government, and civil unrest in the country.

Accepted Answer

A) True 
 B)False

Question 18

Last week, Stephanie quit her job as a copywriter at an advertising agency. She has spent the past few days browsing the help wanted ads but hasn't found anything that matches her skills. Stephanie is BEST classified as:

Accepted Answer

A)   structurally unemployed.
B)   frictionally unemployed.
C)   a discouraged worker.
D)   out of the labor force.

Question 19

The _____ interest rate _____.

Accepted Answer

A)   nominal; can be negative
B)   real; cannot be negative
C)   real; can only be positive
D)   real; can be zero, positive, or negative

Question 20

A binding minimum wage in a labor market is set _____ the equilibrium wage and causes a _____ of labor.

Accepted Answer

A)   below; surplus
B)   below; shortage
C)   above; surplus
D)   above; shortage

Exam 8: Unemployment and Inflation

Correct Answer
verified

If the actual unemployment rate is 7% and the cyclical unemployment rate is 2%, then the natural rate of unemployment is:

Correct Answer
verified

Deflation is a:

Correct Answer
verified

Structural unemployment consists of people who are unemployed because of:

Correct Answer
verified

If the U.S. dollar were replaced with a "new dollar" at an exchange rate of 1 new dollar for 4 old dollars, then an hourly wage of $12 would become an hourly wage of 3 new dollars.

Correct Answer
verified

A binding minimum wage in a labor market is set _ the equilibrium wage and causes a _ of labor.

Correct Answer
verified

The percentage of the labor force that is unemployed is the:

Correct Answer
verified

The _ interest rate _.

Correct Answer
verified

Use the following to answer questions: -(Table: Labor Force Data) Use Table: Labor Force Distribution. The unemployment rate is _____%.

Correct Answer
verified

Jim has a part-time job. He would prefer to have a full-time job but has been unable to find one. Jim is classified as:

Correct Answer
verified

The rate of unemployment is found by dividing the:

Correct Answer
verified

Unanticipated inflation:

Correct Answer
verified

If Jim's income is $80,000 and the price level is 4, then Jim's real income is:

Correct Answer
verified

Frictional and structural unemployment are a part of the natural rate of unemployment.

Correct Answer
verified

Costs of inflation do NOT include _____ costs.

Correct Answer
verified

Economists claim that the unemployment rate can understate the true level of unemployment because the ONLY group that is included is:

Correct Answer
verified

Since 1960, the price level in the United States has decreased in most years.

Correct Answer
verified

If the labor force becomes younger, the natural rate of unemployment will fall.

Correct Answer
verified

The severe inflation in Israel during the mid-1980s was due to a war, an unstable government, and civil unrest in the country.

Correct Answer
verified

Last week, Stephanie quit her job as a copywriter at an advertising agency. She has spent the past few days browsing the help wanted ads but hasn't found anything that matches her skills. Stephanie is BEST classified as:

Correct Answer
verified

Exam 8: Unemployment and Inflation

Correct AnswerverifiedShow Answer

If the actual unemployment rate is 7% and the cyclical unemployment rate is 2%, then the natural rate of unemployment is:

Correct AnswerverifiedShow Answer

Deflation is a:

Correct AnswerverifiedShow Answer

Structural unemployment consists of people who are unemployed because of:

Correct AnswerverifiedShow Answer

If the U.S. dollar were replaced with a "new dollar" at an exchange rate of 1 new dollar for 4 old dollars, then an hourly wage of $12 would become an hourly wage of 3 new dollars.

Correct AnswerverifiedShow Answer

A binding minimum wage in a labor market is set _____ the equilibrium wage and causes a _____ of labor.

Correct AnswerverifiedShow Answer

The percentage of the labor force that is unemployed is the:

Correct AnswerverifiedShow Answer

The _____ interest rate _____.

Correct AnswerverifiedShow Answer

Use the following to answer questions: -(Table: Labor Force Data) Use Table: Labor Force Distribution. The unemployment rate is _____%.

Correct AnswerverifiedShow Answer

Jim has a part-time job. He would prefer to have a full-time job but has been unable to find one. Jim is classified as:

Correct AnswerverifiedShow Answer

The rate of unemployment is found by dividing the:

Correct AnswerverifiedShow Answer

Unanticipated inflation:

Correct AnswerverifiedShow Answer

If Jim's income is $80,000 and the price level is 4, then Jim's real income is:

Correct AnswerverifiedShow Answer

Frictional and structural unemployment are a part of the natural rate of unemployment.

Correct AnswerverifiedShow Answer

Costs of inflation do NOT include _____ costs.

Correct AnswerverifiedShow Answer

Economists claim that the unemployment rate can understate the true level of unemployment because the ONLY group that is included is:

Correct AnswerverifiedShow Answer

Since 1960, the price level in the United States has decreased in most years.

Correct AnswerverifiedShow Answer

If the labor force becomes younger, the natural rate of unemployment will fall.

Correct AnswerverifiedShow Answer

The severe inflation in Israel during the mid-1980s was due to a war, an unstable government, and civil unrest in the country.

Correct AnswerverifiedShow Answer

Last week, Stephanie quit her job as a copywriter at an advertising agency. She has spent the past few days browsing the help wanted ads but hasn't found anything that matches her skills. Stephanie is BEST classified as:

Correct AnswerverifiedShow Answer

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A binding minimum wage in a labor market is set _ the equilibrium wage and causes a _ of labor.

Correct Answer
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The _ interest rate _.

Correct Answer
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