Question 1

People who work part time,but desire to work full time,are considered to be officially unemployed.

Accepted Answer

A) True 
 B)False

Question 2

Official unemployment statistics overstate unemployment because discouraged workers who are not actively seeking work are counted as unemployed.

Accepted Answer

A) True 
 B)False

Question 3

Full-employment output is also called:

Accepted Answer

A)   zero-unemployment output.
B)   equilibrium output.
C)   potential output.
D)   zero-savings output.E) B) and D)
F) All of the above

Question 4

Between 1967 and 1977 the price level approximately doubled.On the basis of this information we can say that the average annual rate of inflation over this ten-year period was about:

Accepted Answer

A)   10 percent.
B)   7 percent.
C)   4 percent.
D)   2 percent.E) All of the above
F) B) and D)

Question 5

Assume that there is a fixed rate of interest on contracts for borrowers and lenders.If unanticipated inflation occurs in the economy,then:

Accepted Answer

A)   both lenders and borrowers benefit.
B)   both lenders and borrowers are hurt.
C)   borrowers are hurt,but lenders benefit.
D)   lenders are hurt,but borrowers benefit.E) B) and C)
F) A) and D)

Question 6

Inflation initiated by increases in wages or other resource prices is labelled:

Accepted Answer

A)   demand-pull inflation.
B)   demand-push inflation.
C)   cost-push inflation.
D)   cost-pull inflation.E) B) and D)
F) A) and B)

Question 7

The following information is for a specific year in a hypothetical economy for which Okun's law is applicable:
Potential Real GDP = $200 billion
Natural rate of unemployment = 6 percent
Actual rate of unemployment = 12 percent
-The amount of output being forgone by the above economy is:

Accepted Answer

A)   $12 billion.
B)   $15 billion.
C)   $18 billion.
D)   $24 billion.E) A) and B)
F) A) and C)

Question 8

Recently a labour union argued that the standard of living of its members was falling.A critic of the union argued that this could not possibly be true because the union had been acquiring significant increases in the nominal incomes of its members through collective bargaining.Is the critic correct?

Accepted Answer

A)   Yes,because when you have a large nominal income your standard of living automatically increases.
B)   No,because real income may fall if price increases are more proportionately than the increase in nominal income.
C)   No,because real income may fall if price increases are less proportionately than the increases in nominal income.
D)   Yes,because real income may fall if price increases are less proportionately than the increases in nominal income.E) B) and D)
F) A) and B)

Question 9

In recent years the Canadian unemployment rate has been lower than the rate in most of the European countries.

Accepted Answer

A) True 
 B)False

Question 10

One perspective on low levels of inflation is that it can:

Accepted Answer

A)   reduce real output.
B)   increase real output.
C)   have no effect on real output.
D)   have no effect on businesses.E) A) and C)
F) A) and B)

Question 11

Which of the following is correct?

Accepted Answer

A)   inflation will always increase the real income.
B)   inflation does not affect the distribution of income.
C)   the redistribution effects of inflation does not depend upon expectation.
D)   the redistribution effects of inflation depends upon whether or not it is expected.E) A) and B)
F) A) and C)

Question 12

The unemployment rate of:

Accepted Answer

A)   women greatly exceeds that of men.
B)   retired persons is more than that of women.
C)   white-collar workers exceeds that of blue-collar workers.
D)   teenagers is much higher than that of adults.E) B) and D)
F) A) and D)

Question 13

During a period of hyperinflation:

Accepted Answer

A)   debtors gain because they repay their debts with dollars of diminished value.
B)   people tend to hold goods rather than money.
C)   income is redistributed away from savers.
D)   all of the above happen.E) A) and D)
F) B) and D)

Question 14

-The above diagram shows different phases of the:

Accepted Answer

A)   business cycle.
B)   cyclical variation.
C)   recession cycle.
D)   prosperity cycle.E) None of the above
F) B) and D)

Question 15

A mismatch between the geographic location of workers and the location of job openings would result in what type of unemployment?

Accepted Answer

A)   wait
B)   cyclical
C)   frictional
D)   structuralE) C) and D)
F) B) and C)

Question 16

Which of the following constitute the unemployment occurring when the natural rate of unemployment exists?

Accepted Answer

A)   frictional and cyclical unemployment
B)   structural,seasonal and frictional unemployment
C)   cyclical and structural unemployment
D)   frictional,structural,and cyclical unemployment.E) B) and C)
F) All of the above

Question 17

The consumer price index was 247 in year 1 and 272 in year 2.The rate of inflation in year 2 was about:

Accepted Answer

A)   12 percent.
B)   10 percent.
C)   8 percent.
D)   6 percent.E) None of the above
F) All of the above

Question 18

When unanticipated deflation occurs:

Accepted Answer

A)   creditors and people with fixed income benefit.
B)   both creditors and debtors are hurt.
C)   both debtors and creditors benefit.
D)   people with fixed income benefit but creditors are hurt.E) A) and B)
F) B) and D)

Question 19

If the Consumer Price index rises from 300 to 333 in a particular year,the rate of inflation in that year is:

Accepted Answer

A)   11 percent.
B)   33 percent.
C)   91 percent.
D)   10 percent.E) None of the above
F) B) and D)

Question 20

The total population of an economy is 175 million,the labour force is 125 million,and the number of unemployed is 8 million.The unemployment rate for this economy is:

Accepted Answer

A)   4.6 percent.
B)   5.8 percent.
C)   6.4 percent.
D)   7.8 percent.E) None of the above
F) A) and B)

Exam 9: Business Cycles, Unemployment, and Inflation

The total population of an economy is 175 million,the labour force is 125 million,and the number of unemployed is 8 million.The unemployment rate for this economy is:

Correct Answer
verified

-The above diagram shows different phases of the:

Correct Answer
verified

The following information is for a specific year in a hypothetical economy for which Okun's law is applicable: Potential Real GDP = $200 billion Natural rate of unemployment = 6 percent Actual rate of unemployment = 12 percent -The amount of output being forgone by the above economy is:

Correct Answer
verified

Which of the following constitute the unemployment occurring when the natural rate of unemployment exists?

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

Between 1967 and 1977 the price level approximately doubled.On the basis of this information we can say that the average annual rate of inflation over this ten-year period was about:

Correct Answer
verified

Inflation initiated by increases in wages or other resource prices is labelled:

Correct Answer
verified

Correct Answer
verified

In recent years the Canadian unemployment rate has been lower than the rate in most of the European countries.

Correct Answer
verified

One perspective on low levels of inflation is that it can:

Correct Answer
verified

If the Consumer Price index rises from 300 to 333 in a particular year,the rate of inflation in that year is:

Correct Answer
verified

The consumer price index was 247 in year 1 and 272 in year 2.The rate of inflation in year 2 was about:

Correct Answer
verified

When unanticipated deflation occurs:

Correct Answer
verified

Full-employment output is also called:

Correct Answer
verified

People who work part time,but desire to work full time,are considered to be officially unemployed.

Correct Answer
verified

During a period of hyperinflation:

Correct Answer
verified

Assume that there is a fixed rate of interest on contracts for borrowers and lenders.If unanticipated inflation occurs in the economy,then:

Correct Answer
verified

Official unemployment statistics overstate unemployment because discouraged workers who are not actively seeking work are counted as unemployed.

Correct Answer
verified

The unemployment rate of:

Correct Answer
verified

A mismatch between the geographic location of workers and the location of job openings would result in what type of unemployment?

Correct Answer
verified

Exam 9: Business Cycles, Unemployment, and Inflation

The total population of an economy is 175 million,the labour force is 125 million,and the number of unemployed is 8 million.The unemployment rate for this economy is:

Correct AnswerverifiedShow Answer

-The above diagram shows different phases of the:

Correct AnswerverifiedShow Answer

The following information is for a specific year in a hypothetical economy for which Okun's law is applicable: Potential Real GDP = $200 billion Natural rate of unemployment = 6 percent Actual rate of unemployment = 12 percent -The amount of output being forgone by the above economy is:

Correct AnswerverifiedShow Answer

Which of the following constitute the unemployment occurring when the natural rate of unemployment exists?

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

Between 1967 and 1977 the price level approximately doubled.On the basis of this information we can say that the average annual rate of inflation over this ten-year period was about:

Correct AnswerverifiedShow Answer

Inflation initiated by increases in wages or other resource prices is labelled:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In recent years the Canadian unemployment rate has been lower than the rate in most of the European countries.

Correct AnswerverifiedShow Answer

One perspective on low levels of inflation is that it can:

Correct AnswerverifiedShow Answer

If the Consumer Price index rises from 300 to 333 in a particular year,the rate of inflation in that year is:

Correct AnswerverifiedShow Answer

The consumer price index was 247 in year 1 and 272 in year 2.The rate of inflation in year 2 was about:

Correct AnswerverifiedShow Answer

When unanticipated deflation occurs:

Correct AnswerverifiedShow Answer

Full-employment output is also called:

Correct AnswerverifiedShow Answer

People who work part time,but desire to work full time,are considered to be officially unemployed.

Correct AnswerverifiedShow Answer

During a period of hyperinflation:

Correct AnswerverifiedShow Answer

Assume that there is a fixed rate of interest on contracts for borrowers and lenders.If unanticipated inflation occurs in the economy,then:

Correct AnswerverifiedShow Answer

Official unemployment statistics overstate unemployment because discouraged workers who are not actively seeking work are counted as unemployed.

Correct AnswerverifiedShow Answer

The unemployment rate of:

Correct AnswerverifiedShow Answer

A mismatch between the geographic location of workers and the location of job openings would result in what type of unemployment?

Correct AnswerverifiedShow Answer

Correct Answer
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