Question 1

Most business cycle theories are

Accepted Answer

A)  endogenous.
B)  exogenous.
C)  both endogenous and exogenous.
D)  neither exogenous nor endogenous. A

Question 2

If the number of unemployed stays the same and the number of people in the labor force declines

Accepted Answer

A)  The unemployment rate will rise.
B)  the unemployment rate will fall.
C)  the unemployment rate will stay the same.
D)  There is not enough information to determine what will happen to the unemployment rate. A

Question 3

In constructing the consumer price index for the current year

Accepted Answer

A)  the average price of a "bundle" of goods purchased in a base year is divided by the prices of the same bundle that existed during the current year.
B)  the average price of a "bundle" of goods purchased during a base year is divided into the price that existed in the current year.
C)  the total cost of a "bundle" of goods purchased in a base year is divided by the cost of the same bundle that existed during the current year.
D)  the total cost of a "bundle" of goods purchased in a base year is divided into the cost of the same bundle that existed during the current year.

Question 4

During a period of deflation the purchasing power of the dollar ____.

Accepted Answer

The answer of During a period of deflation the purchasing...

Question 5

If the number of employed went up and the number of unemployed went down

Accepted Answer

A)  the unemployment rate would go down.
B)  the unemployment rate would go up.
C)  the unemployment rate would stay the same.
D)  the unemployment rate might go up,go down,or stay the same.

Question 6

Statement I: Demand-pull inflation and cost-push inflation have the same basic causes.
Statement II: Traditionally,inflation has hurt creditors and helped debtors.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.

Question 7

Demand-pull inflation is often summed up as

Accepted Answer

A)  too many dollars chasing too few goods.
B)  the wage-price spiral.
C)  profit-push inflation.
D)  supply-side cost shock inflation.

Question 8

Statement I: Since 1998 our misery index has risen sharply.
Statement II: The misery index is the sum of the unemployment and inflation rates.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.

Question 9

Tired of looking for work with nothing to show for it,Bill has given up on the job search.Bill is

Accepted Answer

A)  a contingent worker.
B)  part of the frictionally unemployed.
C)  voluntarily unemployed.
D)  a discouraged worker.
E)  a displaced worker.

Question 10

According to conservatives the Bureau of Labor Statistics

Accepted Answer

A)  overstates the number of unemployed and overstates the unemployment rate.
B)  overstates the number of unemployed and understates the unemployment rate.
C)  understates the number of unemployed and understates the unemployment rate.
D)  understates the number of unemployed and overstates the unemployment rate.

Question 11

Suppose many college faculty members lose their jobs because universities begin to rely more heavily on computerized instruction.The dismissed teachers are appropriately called

Accepted Answer

A)  fully employed.
B)  discouraged workers.
C)  structurally unemployed.
D)  cyclically unemployeD.

Question 12

Which statement is true?

Accepted Answer

A)  Cost-push inflation may be summed up as "too many dollars chasing too few goods."
B)  Profit-push inflation is a variant of demand-pull inflation.
C)  Demand-pull inflation usually happens during wars.
D)  The wage-price spiral is the basic cause of demand-pull inflation.

Question 13

An increase in the quality of items included in the Consumer Price Index would cause the index to

Accepted Answer

A)  overstate the true amount of unemployment.
B)  overstate the true amount of inflation.
C)  understate the true amount of unemployment.
D)  understate the true amount of inflation.

Question 14

A recession would be a decline in real GDP for at least

Accepted Answer

A)  one business quarter.
B)  two business quarters.
C)  one business year.
D)  two business years.
E)  five business years.

Question 15

Statement I: The CPI goes up every year;it can never go down.
Statement II: In constructing the Consumer Price Index,the Bureau of Labor Statistics compiles a market basket of hundreds of goods and services that the typical urban family buys in the base year.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.

Question 16

Use the following choices regarding the various types of unemployment to describe this situation.George was laid off by his trucking firm because of a recession.

Accepted Answer

A)  Frictional unemployment
B)  Structural unemployment
C)  Natural unemployment
D)  Cyclical unemployment

Question 17

In the spring of 2002 we were in the _____ phase of the business cycle.

Accepted Answer

A)  recovery
B)  prosperity
C)  depression
D)  recession
E)  acceleration

Question 18

Michael West has trouble getting places on time.He is always late for job interviews and has been out of work for three years.He is ___________ unemployed.

Accepted Answer

A)  frictionally
B)  structurally
C)  cyclically
D)  seasonally

Question 19

The difference between real and nominal interest rates is

Accepted Answer

A)  unimportant because they are usually the same.
B)  important because bonds are expressed in real rates.
C)  the unemployment rate.
D)  unimportant unless there is deflation.
E)  the expected inflation rate.

Question 20

Frictional unemployment describes

Accepted Answer

A)  recent entrants,re-entrants,and voluntary quits who require only a short time to find new employment.
B)  the growing number of job seekers whose absence of skills makes them unemployable in any line of work except unskilled,dead-end jobs.
C)  the loss of jobs resulting from periods of recession.
D)  extended periods of unemployment during which retraining for new jobs occurs.
E)  seasonal layoffs and periods without work,such as construction and public school teaching. A

Exam 10: Economic Fluctuations, unemployment, and Inflation

Most business cycle theories are

Correct AnswerverifiedA

If the number of unemployed stays the same and the number of people in the labor force declines

Correct AnswerverifiedA

In constructing the consumer price index for the current year

Correct AnswerverifiedShow Answer

During a period of deflation the purchasing power of the dollar ____.

Correct AnswerverifiedShow Answer

If the number of employed went up and the number of unemployed went down

Correct AnswerverifiedShow Answer

Statement I: Demand-pull inflation and cost-push inflation have the same basic causes. Statement II: Traditionally,inflation has hurt creditors and helped debtors.

Correct AnswerverifiedShow Answer

Demand-pull inflation is often summed up as

Correct AnswerverifiedShow Answer

Statement I: Since 1998 our misery index has risen sharply. Statement II: The misery index is the sum of the unemployment and inflation rates.

Correct AnswerverifiedShow Answer

Tired of looking for work with nothing to show for it,Bill has given up on the job search.Bill is

Correct AnswerverifiedShow Answer

According to conservatives the Bureau of Labor Statistics

Correct AnswerverifiedShow Answer

Suppose many college faculty members lose their jobs because universities begin to rely more heavily on computerized instruction.The dismissed teachers are appropriately called

Correct AnswerverifiedShow Answer

Which statement is true?

Correct AnswerverifiedShow Answer

An increase in the quality of items included in the Consumer Price Index would cause the index to

Correct AnswerverifiedShow Answer

A recession would be a decline in real GDP for at least

Correct AnswerverifiedShow Answer

Statement I: The CPI goes up every year;it can never go down. Statement II: In constructing the Consumer Price Index,the Bureau of Labor Statistics compiles a market basket of hundreds of goods and services that the typical urban family buys in the base year.

Correct AnswerverifiedShow Answer

Use the following choices regarding the various types of unemployment to describe this situation.George was laid off by his trucking firm because of a recession.

Correct AnswerverifiedShow Answer

In the spring of 2002 we were in the _____ phase of the business cycle.

Correct AnswerverifiedShow Answer

Michael West has trouble getting places on time.He is always late for job interviews and has been out of work for three years.He is ___________ unemployed.

Correct AnswerverifiedShow Answer

The difference between real and nominal interest rates is

Correct AnswerverifiedShow Answer

Frictional unemployment describes

Correct AnswerverifiedA

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