Question 1

Which of the following is true of high and variable rates of inflation?

Accepted Answer

A)   When such rates are present, it will be difficult for people to accurately forecast next year's rate of inflation.
B)   Inflation of this type will help promote economic growth and the efficient use of resources.
C)   People will respond to such rates by spending more time producing and less time trying to protect their wealth and income from the uncertainty created by the inflation.
D)   Inflation of this type will improve the information content delivered by market prices.

Question 2

The natural rate of unemployment is not zero because

Accepted Answer

A)   some workers will always have few skills.
B)   unemployment will always rise during the recessionary phase of the business cycle.
C)   the economy is characterized by dynamic change and imperfect information.
D)   not every member of society is capable of participating in the labor force.

Question 3

At the beginning of a year, decision makers expect the general level of prices to increase at a 3 percent annual rate. The CPI increases from 150 to 154.5 during the year; this is an example of

Accepted Answer

A)   an inflation rate that is equal to 4.5 percent.
B)   an unanticipated increase in the general level of prices.
C)   an increase in the general level of prices that was accurately anticipated.
D)   an inflation rate that is less than what people anticipated.

Question 4

During a recession, the actual rate of unemployment will be

Accepted Answer

A)   less than the natural rate of unemployment.
B)   greater than the natural rate of unemployment.
C)   equal to the natural rate of unemployment.
D)   unaffected by the economic contraction.

Question 5

An individual should continue to spend time searching for a job as long as

Accepted Answer

A)   all salary offers are below what the person expected.
B)   the marginal benefit expected from additional search exceeds the marginal cost.
C)   job openings are available in the individual's field.
D)   information is available that the individual has not yet collected.

Question 6

Which one of the following would be classified as employed?

Accepted Answer

A)   a parent who works 50 to 60 hours per week caring for family members
B)   an construction worker vacationing in Florida who is on layoff due to bad weather conditions in his home state
C)   a 21-year-old full-time college student
D)   a 17-year-old high school student who works a newspaper route six hours per week

Question 7

Andrea would be considered unemployed if she is

Accepted Answer

A)   working at a part-time job but is looking for a full-time job.
B)   absent from her regular job as the result of illness.
C)   working at a full-time job but is looking for a part-time job.
D)   not working and is looking for a part-time job.

Question 8

At the beginning of a year, decision makers expect the general level of prices to increase at a 6 percent annual rate. The CPI increases from 150 to 154.5 during the year; this indicates that

Accepted Answer

A)   decision makers underestimated the rate of inflation during the year.
B)   decision makers overestimated the rate of inflation during the year.
C)   decision makers accurately forecast the rate of inflation during the year.
D)   the rate of inflation during the year was 4.5 percent.

Question 9

Which of the following types of unemployment can exist in an economy that is at its potential output level?

Accepted Answer

A)   cyclical unemployment only
B)   structural unemployment only
C)   frictional, cyclical, and seasonal unemployment only
D)   frictional, seasonal, and structural unemployment only
E)   there will be no unemployment in an economy that is at the potential output level

Question 10

The concept of full employment

Accepted Answer

A)   is based on the premise that an economy with an efficient labor market will experience no unemployment.
B)   reflects the "shopping" of employees looking for employment and of employers seeking to hire workers.
C)   indicates that full employment is present when the actual rate of unemployment is below the natural rate.
D)   reflects the impact of an economic contraction.

Question 11

Which one of the following persons would be considered employed?

Accepted Answer

A)   a retired construction worker
B)   a part-time worker looking for a full-time job
C)   a construction worker laid off due to cold weather
D)   a full-time college student who is not a member of the labor force

Question 12

Answer the following questions:
a.What is meant by the term "business cycle"?
b.What economic indicators would indicate where the economy is in the business cycle? Explain.
c.Give the four phases of the business cycle in their order of occurrence.
d.What criterion must be met for our economy to be officially in a recession?

Accepted Answer

a.The business cycle is the periodic inc...

Question 13

If Sam Jackson voluntarily quits one job, possesses marketable skills, and expects to find a new job in a few weeks, then Mr. Jackson is considered

Accepted Answer

A)   frictionally unemployed.
B)   cyclically unemployed.
C)   seasonally unemployed.
D)   structurally unemployed.
E)   unwise to quit his job without already having another one.

Question 14

Which of the following would be most likely to reduce the rate of unemployment?

Accepted Answer

A)   a business recession
B)   an Internet job listing system that makes it easier to get information about job openings and available employees
C)   an increase in unemployment compensation benefits
D)   a rise in the minimum wage

Question 15

As the "baby boom" generation has become older, youthful workers as a share of the labor force have decreased causing a(n)

Accepted Answer

A)   increase in frictional unemployment.
B)   increase in cyclical unemployment.
C)   increase in actual unemployment.
D)   decrease in the natural rate of unemployment.

Question 16

Which of the following is true?

Accepted Answer

A)   The unemployment rates of the major European economies were substantially lower than in the United States during the last decade.
B)   High unemployment rates over lengthy time periods are indicative of structural and regulatory factors that are exerting an adverse impact on the natural rate of unemployment.
C)   The natural rate of unemployment is unaffected by changes in the age composition of the labor force (for example, an increase in the relative number of youthful workers) .
D)   Institutional changes such as an increase in the minimum wage may increase cyclical unemployment but will not affect the natural rate of unemployment.

Question 17

Evaluate the economic validity of the following statement: "Unemployed resources would not exist if the economy were operating efficiently."

Accepted Answer

This statement is false. It fails to rec...

Question 18

Which of the following will most likely occur during the expansionary phase of a business cycle?

Accepted Answer

A)   Real GDP rises, and unemployment falls.
B)   Real GDP declines, and inflation rises.
C)   Interest rates rise, and the number of business failures rise.
D)   Inflation rises, and employment falls.

Question 19

When the "baby boom" generation began entering the labor market during the 1960s and 1970s, youthful workers as a share of the labor force increased causing a(n)

Accepted Answer

A)   reduction in frictional unemployment.
B)   reduction in cyclical unemployment.
C)   reduction in actual unemployment.
D)   increase in the natural rate of unemployment.

Question 20

The labor force participation rate is

Accepted Answer

A)   the number of persons employed divided by the number of persons unemployed.
B)   the number of persons 16 years of age and older who are either employed or actively seeking work divided by the total noninstitutional population 16 years of age and older.
C)   the number of persons employed divided by the number of persons 16 years of age and older.
D)   the number of persons who are actively seeking work divided by the number of persons who are employed.

Exam 8: Economic Fluctuations, Unemployment, and Inflation

Which of the following is true of high and variable rates of inflation?

Correct Answer
verified

Which of the following will most likely occur during the expansionary phase of a business cycle?

Correct Answer
verified

During a recession, the actual rate of unemployment will be

Correct Answer
verified

Andrea would be considered unemployed if she is

Correct Answer
verified

Which of the following types of unemployment can exist in an economy that is at its potential output level?

Correct Answer
verified

Evaluate the economic validity of the following statement: "Unemployed resources would not exist if the economy were operating efficiently."

Correct Answer
verified
This statement is false. It fails to rec...
View Answer

Which one of the following would be classified as employed?

Correct Answer
verified

The concept of full employment

Correct Answer
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Correct Answer
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a.The business cycle is the periodic inc...
View Answer

As the "baby boom" generation has become older, youthful workers as a share of the labor force have decreased causing a(n)

Correct Answer
verified

Which of the following is true?

Correct Answer
verified

When the "baby boom" generation began entering the labor market during the 1960s and 1970s, youthful workers as a share of the labor force increased causing a(n)

Correct Answer
verified

The natural rate of unemployment is not zero because

Correct Answer
verified

At the beginning of a year, decision makers expect the general level of prices to increase at a 6 percent annual rate. The CPI increases from 150 to 154.5 during the year; this indicates that

Correct Answer
verified

Which of the following would be most likely to reduce the rate of unemployment?

Correct Answer
verified

At the beginning of a year, decision makers expect the general level of prices to increase at a 3 percent annual rate. The CPI increases from 150 to 154.5 during the year; this is an example of

Correct Answer
verified

If Sam Jackson voluntarily quits one job, possesses marketable skills, and expects to find a new job in a few weeks, then Mr. Jackson is considered

Correct Answer
verified

Which one of the following persons would be considered employed?

Correct Answer
verified

An individual should continue to spend time searching for a job as long as

Correct Answer
verified

The labor force participation rate is

Correct Answer
verified

Exam 8: Economic Fluctuations, Unemployment, and Inflation

Which of the following is true of high and variable rates of inflation?

Correct AnswerverifiedShow Answer

Which of the following will most likely occur during the expansionary phase of a business cycle?

Correct AnswerverifiedShow Answer

During a recession, the actual rate of unemployment will be

Correct AnswerverifiedShow Answer

Andrea would be considered unemployed if she is

Correct AnswerverifiedShow Answer

Which of the following types of unemployment can exist in an economy that is at its potential output level?

Correct AnswerverifiedShow Answer

Evaluate the economic validity of the following statement: "Unemployed resources would not exist if the economy were operating efficiently."

Correct AnswerverifiedThis statement is false. It fails to rec...View AnswerShow Answer

Which one of the following would be classified as employed?

Correct AnswerverifiedShow Answer

The concept of full employment

Correct AnswerverifiedShow Answer

Correct Answerverifieda.The business cycle is the periodic inc...View AnswerShow Answer

As the "baby boom" generation has become older, youthful workers as a share of the labor force have decreased causing a(n)

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

When the "baby boom" generation began entering the labor market during the 1960s and 1970s, youthful workers as a share of the labor force increased causing a(n)

Correct AnswerverifiedShow Answer

The natural rate of unemployment is not zero because

Correct AnswerverifiedShow Answer

At the beginning of a year, decision makers expect the general level of prices to increase at a 6 percent annual rate. The CPI increases from 150 to 154.5 during the year; this indicates that

Correct AnswerverifiedShow Answer

Which of the following would be most likely to reduce the rate of unemployment?

Correct AnswerverifiedShow Answer

At the beginning of a year, decision makers expect the general level of prices to increase at a 3 percent annual rate. The CPI increases from 150 to 154.5 during the year; this is an example of

Correct AnswerverifiedShow Answer

If Sam Jackson voluntarily quits one job, possesses marketable skills, and expects to find a new job in a few weeks, then Mr. Jackson is considered

Correct AnswerverifiedShow Answer

Which one of the following persons would be considered employed?

Correct AnswerverifiedShow Answer

An individual should continue to spend time searching for a job as long as

Correct AnswerverifiedShow Answer

The labor force participation rate is

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
This statement is false. It fails to rec...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a.The business cycle is the periodic inc...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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