Question 1

The total labor force comprises:

Accepted Answer

A)   all individuals who are employed.
B)   those who are employed plus those who are unemployed.
C)   the population of a nation, aged 16 years and above.
D)   all individuals who are working and those who are not working.

Question 2

Inflation refers to an increase in the average level of prices in an economy.

Accepted Answer

A) True 
 B)False

Question 3

The point on a business cycle where real GDP stops rising and begins falling is called a(n) :

Accepted Answer

A)   peak.
B)   trough.
C)   expansion.
D)   recession.

Question 4

Figure 5-1 shows the path of real GDP growth over time. Use the figure to answer questions . 1 and t3. B)  at t3. C)  between t2 and t3. D)  at t2." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 5-1. The peak of the business cycle occurs:

Accepted Answer

A)   between t1 and t3.
B)   at t3.
C)   between t2 and t3.
D)   at t2.

Question 5

The phases of a business cycle are identified by examining the growth of real GDP.

Accepted Answer

A) True 
 B)False

Question 6

Nominal GDP of a particular year is calculated as the total value of final goods and services in that year in terms of the base-year prices.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is true of inflation?

Accepted Answer

A)   It refers to a decrease in the general price level in an economy.
B)   It refers to a rise in the price level of gasoline.
C)   It refers to a constant general price level in an economy.
D)   It refers to an increase in the average level of prices.

Question 8

Table 5-3 shows price and output data for a small nation. Consider 2003 as the base period. Use the table to answer question 61.
Table 5-3
 
-Refer to Table 5-3. What is the value of nominal output in 2003?

Accepted Answer

A)   $100,000
B)   $500,000
C)   $125,000
D)   $200,000

Question 9

If a nation liberalizes its immigration laws and receives a significant influx of young workers:

Accepted Answer

A)   the natural rate of unemployment is likely to increase.
B)   the natural rate of unemployment is likely to decrease.
C)   the natural rate of unemployment is unlikely to change.
D)   frictional unemployment is likely to decrease.

Question 10

Figure 5-1 shows the path of real GDP growth over time. Use the figure to answer questions . 1 and ends at t2. B)  at t1 and ends at t3. C)  at t2 and ends at t3. D)  at t2 and ends at t4." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 5-1. A typical business cycle begins:

Accepted Answer

A)   at t1 and ends at t2.
B)   at t1 and ends at t3.
C)   at t2 and ends at t3.
D)   at t2 and ends at t4.

Question 11

An indexed payment is a payment for which:

Accepted Answer

A)   the nominal value does not change with the rate of change in the price level.
B)   the nominal value is constant.
C)   the nominal value changes with the rate of change in the price level.
D)   the nominal value is equal to the real value, when inflation is positive.

Question 12

The value, at current market prices, of the final goods and services produced during a particular period is:

Accepted Answer

A)   net national product.
B)   gross foreign factor output.
C)   gross personal product.
D)   gross domestic product.

Question 13

When the media reports the U.S. inflation rate, the number cited is usually a rate computed using:

Accepted Answer

A)   the implicit price deflator.
B)   the consumer price index.
C)   the personal consumption expenditures price index.
D)   the ratio of real and nominal wages.

Question 14

Assuming a constant level of nominal income, the real income of an individual rises:

Accepted Answer

A)   during an inflationary phase in the economy.
B)   when deflation occurs in the economy.
C)   if hyperinflation takes place.
D)   with a rise in natural rate of unemployment.

Question 15

Since late 2006, OPEC has successfully raised world oil prices significantly. These price increases have caused governments and firms to explore alternative sources of energy, for example bio-fuels. Consumers too have started switching toward hybrid automobiles and toward automobiles that use bio-fuels, both of which are cheaper to operate than gasoline engines. Which problems in the construction of the CPI does this situation represent?

Accepted Answer

A)   Both substitution bias and new-product bias
B)   Quality-change bias
C)   Both quality-change bias and outlet bias
D)   Both income bias and substitution bias

Question 16

Table 5-7 shows a mechanic's hourly wage and the respective price indexes for the years 1975 and 2005. Use the table to answer questions .
Table 5-7
 
-Refer to Table 5-7. What has happened to a mechanic's real hourly wage between 1975 and 2005?

Accepted Answer

A)   It rose by 180%.
B)   It fell by 18%.
C)   It rose by 5%.
D)   It fell by about 64%.

Question 17

The point in the business cycle at which a recession begins is known as the trough.

Accepted Answer

A) True 
 B)False

Question 18

Suppose nominal GDP in a country rose in the third quarter of 2008 (from the second quarter) . Yet, real GDP fell in the third quarter of 2008. What could have accounted for this?

Accepted Answer

A)   The economy's price level declined over the second and third quarters of 2008.
B)   The general price level in the economy in the third quarter is higher than that in the second quarter of 2008.
C)   Production of goods must have increased by a greater rate than the increase in the economy's price level.
D)   The population of the country must have increased over the last quarter.

Question 19

Define the natural rate of unemployment. Identify three factors that may cause the natural rate to change over time.

Accepted Answer

The natural rate of unemployment refers ...

Question 20

In the Case in Point entitled "Might Increased Structural Unemployment Explain the 'Jobless Recovery' Following the 2001 Recession," economists Erica Goshen and Simon Potter note that when a layoff is temporary, the employer "suspends" the job, due to slack demand, and the employee expects to be recalled once demand picks up. With a permanent layoff, the employer eliminates the job. Which of the following statements is consistent with their observations?

Accepted Answer

A)   Both temporary and permanent layoffs create cyclical unemployment.
B)   Both temporary and permanent layoffs create structural unemployment.
C)   Temporary layoffs create structural unemployment while permanent layoffs create cyclical unemployment.
D)   Temporary layoffs create cyclical unemployment while permanent layoffs create structural unemployment.

Exam 5: Macroeconomics: the Big Picture

Correct Answer
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Define the natural rate of unemployment. Identify three factors that may cause the natural rate to change over time.

Correct Answer
Answered by ExamLex AI
The natural rate of unemployment refers ...
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If a nation liberalizes its immigration laws and receives a significant influx of young workers:

Correct Answer
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Inflation refers to an increase in the average level of prices in an economy.

Correct Answer
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Correct Answer
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The value, at current market prices, of the final goods and services produced during a particular period is:

Correct Answer
verified

Figure 5-1 shows the path of real GDP growth over time. Use the figure to answer questions . -Refer to Figure 5-1. A typical business cycle begins:

Correct Answer
verified

Table 5-3 shows price and output data for a small nation. Consider 2003 as the base period. Use the table to answer question 61. Table 5-3 -Refer to Table 5-3. What is the value of nominal output in 2003?

Correct Answer
verified

The point in the business cycle at which a recession begins is known as the trough.

Correct Answer
verified

Suppose nominal GDP in a country rose in the third quarter of 2008 (from the second quarter) . Yet, real GDP fell in the third quarter of 2008. What could have accounted for this?

Correct Answer
verified

The phases of a business cycle are identified by examining the growth of real GDP.

Correct Answer
verified

Assuming a constant level of nominal income, the real income of an individual rises:

Correct Answer
verified

Which of the following statements is true of inflation?

Correct Answer
verified

Figure 5-1 shows the path of real GDP growth over time. Use the figure to answer questions . -Refer to Figure 5-1. The peak of the business cycle occurs:

Correct Answer
verified

The point on a business cycle where real GDP stops rising and begins falling is called a(n) :

Correct Answer
verified

When the media reports the U.S. inflation rate, the number cited is usually a rate computed using:

Correct Answer
verified

An indexed payment is a payment for which:

Correct Answer
verified

The total labor force comprises:

Correct Answer
verified

Nominal GDP of a particular year is calculated as the total value of final goods and services in that year in terms of the base-year prices.

Correct Answer
verified

Table 5-7 shows a mechanic's hourly wage and the respective price indexes for the years 1975 and 2005. Use the table to answer questions . Table 5-7 -Refer to Table 5-7. What has happened to a mechanic's real hourly wage between 1975 and 2005?

Correct Answer
verified

Exam 5: Macroeconomics: the Big Picture

Correct AnswerverifiedShow Answer

Define the natural rate of unemployment. Identify three factors that may cause the natural rate to change over time.

Correct AnswerAnswered by ExamLex AIThe natural rate of unemployment refers ...View AnswerShow Answer

If a nation liberalizes its immigration laws and receives a significant influx of young workers:

Correct AnswerverifiedShow Answer

Inflation refers to an increase in the average level of prices in an economy.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The value, at current market prices, of the final goods and services produced during a particular period is:

Correct AnswerverifiedShow Answer

Figure 5-1 shows the path of real GDP growth over time. Use the figure to answer questions . -Refer to Figure 5-1. A typical business cycle begins:

Correct AnswerverifiedShow Answer

Table 5-3 shows price and output data for a small nation. Consider 2003 as the base period. Use the table to answer question 61. Table 5-3 -Refer to Table 5-3. What is the value of nominal output in 2003?

Correct AnswerverifiedShow Answer

The point in the business cycle at which a recession begins is known as the trough.

Correct AnswerverifiedShow Answer

Suppose nominal GDP in a country rose in the third quarter of 2008 (from the second quarter) . Yet, real GDP fell in the third quarter of 2008. What could have accounted for this?

Correct AnswerverifiedShow Answer

The phases of a business cycle are identified by examining the growth of real GDP.

Correct AnswerverifiedShow Answer

Assuming a constant level of nominal income, the real income of an individual rises:

Correct AnswerverifiedShow Answer

Which of the following statements is true of inflation?

Correct AnswerverifiedShow Answer

Figure 5-1 shows the path of real GDP growth over time. Use the figure to answer questions . -Refer to Figure 5-1. The peak of the business cycle occurs:

Correct AnswerverifiedShow Answer

The point on a business cycle where real GDP stops rising and begins falling is called a(n) :

Correct AnswerverifiedShow Answer

When the media reports the U.S. inflation rate, the number cited is usually a rate computed using:

Correct AnswerverifiedShow Answer

An indexed payment is a payment for which:

Correct AnswerverifiedShow Answer

The total labor force comprises:

Correct AnswerverifiedShow Answer

Nominal GDP of a particular year is calculated as the total value of final goods and services in that year in terms of the base-year prices.

Correct AnswerverifiedShow Answer

Table 5-7 shows a mechanic's hourly wage and the respective price indexes for the years 1975 and 2005. Use the table to answer questions . Table 5-7 -Refer to Table 5-7. What has happened to a mechanic's real hourly wage between 1975 and 2005?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
The natural rate of unemployment refers ...
View Answer

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