Question 1

Inﬂation means that

Accepted Answer

A)   all prices are rising, but at different rates.
B)   all prices are rising at approximately the same rate.
C)   prices on average are rising, although some particular prices may be falling.
D)   real incomes are rising.

Question 2

Oﬃcial unemployment rate statistics may

Accepted Answer

A)   overstate the amount of unemployment by including part-time workers in the calculations.
B)   understate the amount of unemployment by excluding part-time workers in the calculations.
C)   overstate the amount of unemployment because of the presence of "discouraged" workers who are not actively seeking employment.
D)   understate the amount of unemployment because of the presence of "discouraged" workers who are not actively seeking employment.

Question 3

If the Consumer Price Index was 125 in one year and 120 in the following year, then the rate of inﬂation was approximately

Accepted Answer

A)   4.0 percent.
B)   4.2 percent.
C)   -4.0 percent.
D)   -4.2 percent.

Question 4

If a person's nominal income increases by 5 percent while the price level increases by 2 percent, then that person's real income

Accepted Answer

A)   increases by 3 percent.
B)   increases by 5 percent.
C)   decreases by 7 percent.
D)   decreases by 2 percent.

Question 5

Which of the following is the correct way to calculate the unemployment rate?

Accepted Answer

A)   [(unemployed) /(population) ] × 100
B)   [(unemployed) /(labor force) ] × 100
C)   [(labor force) /(population) ] × 100
D)   [(labor force) /(unemployed) ] × 100

Question 6

A peak in the business cycle

Accepted Answer

A)   occurs when the unemployment rate is its greatest.
B)   occurs when the inﬂation rate is its lowest.
C)   is a temporary maximum point.
D)   is a temporary minimum point.

Question 7

Unemployment rates for skilled workers compared to unemployment rates for unskilled workers are

Accepted Answer

A)   lower, because skilled workers tend to be employed in less cyclically vulnerable industries, such as the services and nondurable goods industries.
B)   higher, because skilled workers tend to be employed in more cyclically vulnerable industries, such as the durable goods industry.
C)   higher, because businesses are less likely to retain the more costly skilled workers no matter what type of industry.
D)   lower, because skilled workers tend to be primarily employed by government at the local, state, and federal levels.

Question 8

The production of durable goods is more stable than the production of nondurables over the
business cycle.

Accepted Answer

A) True 
 B)False

Question 9

If the CPI rises from 125 to 140 from one year to the next, then the rate of inﬂation is 15 percent.

Accepted Answer

A) True 
 B)False

Question 10

In what circumstances would lenders most beneﬁt?

Accepted Answer

A)   when there is an unanticipated decrease in inﬂation
B)   when there is an anticipated increase in inﬂation
C)   when there is an unanticipated increase in inﬂation
D)   when there is an anticipated decrease in inﬂation

Question 11

If the total population is 200 million, the labor force is 100 million, and 92 million workers are employed, then the unemployment rate would be

Accepted Answer

A)   4 percent.
B)   6 percent.
C)   8 percent.
D)   10 percent.

Question 12

Assuming the total population is 100 million, the civilian labor force is 50 million, and 47 million workers are employed, the unemployment rate is

Accepted Answer

A)   3 percent.
B)   6 percent.
C)   7 percent.
D)   53 percent.

Question 13

The unemployment rate among teenagers tends to be lower than the unemployment rate among
adults.

Accepted Answer

A) True 
 B)False

Question 14

The accompanying list describes the responses of four individuals to a Bureau of Labor Statistics (BLS)  survey of employment.
1)  Mollie just graduated from college and is now looking for work. She has had three job interviews in
The past month but still has not gotten a job offer.
2)  George used to work in an automotive assembly plant. He was laid off six months ago as the
Economy weakened. He expects to return to work in a few months when national economic
Conditions improve.
3)  Jeanette worked as an aircraft design engineer for a company that produces military aircraft until
She lost her job last year when the Federal government cut defense spending. She has been
Looking for similar work for a year, but no company seems interested in her aircraft design skills.
4)  Ricardo lost his job last year when his company downsized and laid off middle-level managers. He
Tried to ﬁnd another job for a year but was unsuccessful and quit looking for work.
Which individual is frictionally unemployed?

Accepted Answer

A)   Mollie
B)   George
C)   Jeanette
D)   Ricardo

Question 15

(Last Word)  All of the following are explanations for why many job openings were going unﬁlled after the Great Recession except

Accepted Answer

A)   skills mismatches between the worker and the employer.
B)   employers set unreasonably high recruiting criteria.
C)   less geographic relocation of the labor force.
D)   the fact that some amount of frictional unemployment always exists.
E)   the extensive array of vocational programs offered at high schools today.

Question 16

Unemployed 7 Total Population 145 Employed 95 Discouraged Workers 3\begin{array} { | l | r | } \hline 	ext { Unemployed } & 7 \\hline 	ext { Total Population } & 145 \\hline 	ext { Employed } & 95 \\hline 	ext { Discouraged Workers } & 3 \\hline\end{array} Unemployed  Total Population  Employed  Discouraged Workers ​7145953​​  The table contains information about the hypothetical economy of Scoob. All ?gures are in millions. The labor force in Scoob is

Accepted Answer

A)   95 million.
B)   102 million.
C)   105 million.
D)   145 million.

Question 17

Explain the difference between nominal and real interest rates.

Accepted Answer

The nominal interest rate is the interes...

Question 18

When unanticipated deﬂation occurs,

Accepted Answer

A)   both creditors and debtors beneﬁt.
B)   both creditors and debtors are hurt.
C)   debtors are hurt, but creditors beneﬁt.
D)   creditors are hurt, but debtors beneﬁt.

Question 19

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

Accepted Answer

A)   the long-run increase in the relative importance of durable goods in the U.S. economy.
B)   the long-term expansion or contraction of business activity that occurs over many years.
C)   ﬂuctuations in business activity that average 40 months in duration.
D)   ﬂuctuations in business activity that occur around Christmas, Easter, and other major holidays.

Question 20

Under which of the following circumstances would we observe the greatest increase in real income?

Accepted Answer

A)   Nominal income falls by 2 percent, and the price level falls by 10 percent.
B)   Nominal income rises by 8 percent, and the price level rises by 4 percent.
C)   Nominal income rises by 15 percent, and the price level rises by 12 percent.
D)   Nominal income falls by 4 percent, and the price level rises by 6 percent.

Exam 9: Business Cycles, Unemployment, and Inflation

If the CPI rises from 125 to 140 from one year to the next, then the rate of inﬂation is 15 percent.

Correct Answer
verified

Unemployment rates for skilled workers compared to unemployment rates for unskilled workers are

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

In what circumstances would lenders most beneﬁt?

Correct Answer
verified

If the Consumer Price Index was 125 in one year and 120 in the following year, then the rate of inﬂation was approximately

Correct Answer
verified

A peak in the business cycle

Correct Answer
verified

Inﬂation means that

Correct Answer
verified

The unemployment rate among teenagers tends to be lower than the unemployment rate among adults.

Correct Answer
verified

If the total population is 200 million, the labor force is 100 million, and 92 million workers are employed, then the unemployment rate would be

Correct Answer
verified

When unanticipated deﬂation occurs,

Correct Answer
verified

Correct Answer
verified

Under which of the following circumstances would we observe the greatest increase in real income?

Correct Answer
verified

Which of the following is the correct way to calculate the unemployment rate?

Correct Answer
verified

(Last Word) All of the following are explanations for why many job openings were going unﬁlled after the Great Recession except

Correct Answer
verified

Oﬃcial unemployment rate statistics may

Correct Answer
verified

Assuming the total population is 100 million, the civilian labor force is 50 million, and 47 million workers are employed, the unemployment rate is

Correct Answer
verified

Explain the difference between nominal and real interest rates.

Correct Answer
verified
The nominal interest rate is the interes...
View Answer

The production of durable goods is more stable than the production of nondurables over the business cycle.

Correct Answer
verified

If a person's nominal income increases by 5 percent while the price level increases by 2 percent, then that person's real income

Correct Answer
verified

Exam 9: Business Cycles, Unemployment, and Inflation

If the CPI rises from 125 to 140 from one year to the next, then the rate of inﬂation is 15 percent.

Correct AnswerverifiedShow Answer

Unemployment rates for skilled workers compared to unemployment rates for unskilled workers are

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In what circumstances would lenders most beneﬁt?

Correct AnswerverifiedShow Answer

If the Consumer Price Index was 125 in one year and 120 in the following year, then the rate of inﬂation was approximately

Correct AnswerverifiedShow Answer

A peak in the business cycle

Correct AnswerverifiedShow Answer

Inﬂation means that

Correct AnswerverifiedShow Answer

The unemployment rate among teenagers tends to be lower than the unemployment rate among adults.

Correct AnswerverifiedShow Answer

If the total population is 200 million, the labor force is 100 million, and 92 million workers are employed, then the unemployment rate would be

Correct AnswerverifiedShow Answer

When unanticipated deﬂation occurs,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Under which of the following circumstances would we observe the greatest increase in real income?

Correct AnswerverifiedShow Answer

Which of the following is the correct way to calculate the unemployment rate?

Correct AnswerverifiedShow Answer

(Last Word) All of the following are explanations for why many job openings were going unﬁlled after the Great Recession except

Correct AnswerverifiedShow Answer

Oﬃcial unemployment rate statistics may

Correct AnswerverifiedShow Answer

Assuming the total population is 100 million, the civilian labor force is 50 million, and 47 million workers are employed, the unemployment rate is

Correct AnswerverifiedShow Answer

Explain the difference between nominal and real interest rates.

Correct AnswerverifiedThe nominal interest rate is the interes...View AnswerShow Answer

The production of durable goods is more stable than the production of nondurables over the business cycle.

Correct AnswerverifiedShow Answer

If a person's nominal income increases by 5 percent while the price level increases by 2 percent, then that person's real income

Correct AnswerverifiedShow Answer

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The nominal interest rate is the interes...
View Answer

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