Question 1

A worker classified as frictionally unemployed is one who is:

Accepted Answer

A)   laid off during a recession.
B)   discouraged and has dropped out of the labor force.
C)   unemployed while looking for a job that demands his or her skills.
D)   working part time but would prefer to work full time.E) All of the above
F) None of the above

Question 2

The increased availability of automatic teller machines has decreased the shoe-leather costs of high inflation.

Accepted Answer

A) True 
 B)False

Question 3

Increases in the average level of prices are called:

Accepted Answer

A)   depreciation.
B)   deflation.
C)   inflation.
D)   expectations.E) A) and B)
F) None of the above

Question 4

If deflation occurs and your income is fixed, your real income:

Accepted Answer

A)   will fall.
B)   will go up.
C)   will still be equal to your nominal income.
D)   is constant.E) A) and D)
F) B) and C)

Question 5

In 2017, 10 million people did not have a job but were actively looking for employment, and 85 million people had either a full-time or a part-time job. The unemployment rate in 2017 was _____%.

Accepted Answer

A)   10
B)   9.5
C)   10.5
D)   8.5E) All of the above
F) A) and C)

Question 6

Suppose that roughly 8 million people in the United States were actively seeking jobs but had not found them this month, the same number as last month. Suppose that 2 million of the people who were unemployed last month gave up their search this month and stopped looking for work. What will happen to the official unemployment rate this month, all other things unchanged?

Accepted Answer

A)   It will rise because 2 million people are not in the labor force this month and are not counted as unemployed.
B)   It will fall because 2 million people are not in the labor force this month and are not counted as unemployed.
C)   It will be unaffected because the same number of people is unemployed.
D)   The unemployment rate will decrease by 25%.E) All of the above
F) B) and D)

Question 7

Employment is the total:

Accepted Answer

A)   labor force.
B)   population of working age.
C)   number of people actively working, either full time or part time.
D)   number of people not unemployed.E) A) and C)
F) C) and D)

Question 8

The U.S. inflation rate was lower in the 2000s than it was in the 1970s.

Accepted Answer

A) True 
 B)False

Question 9

Use the following to answer questions: 
-(Table: Population Data for Estill County)  Use Table: Population Data for Estill County. How many people are in the labor force?

Accepted Answer

A)   6,000
B)   9,400
C)   7,400
D)   6,500E) B) and C)
F) C) and D)

Question 10

Use the following to answer questions: 
-(Table: Price Levels)  Use Table: Price Levels. What is the rate of inflation from 2013 to 2014?

Accepted Answer

A)   1.1%
B)   2.6%
C)   2.9%
D)   2.0%E) A) and B)
F) A) and C)

Question 11

When the price level increases, everyone becomes poorer.

Accepted Answer

A) True 
 B)False

Question 12

The labor force is considered to be:

Accepted Answer

A)   everyone who is employed.
B)   everyone who is employed plus everyone who is unemployed.
C)   the population of the nation.
D)   those not frictionally unemployed plus all others who are employed.E) A) and B)
F) All of the above

Question 13

During Brazil's hyperinflation of the 1990s, the economy lost real resources when the _____ sector grew very large to cope with the consequences of the high rate of inflation.

Accepted Answer

A)   banking
B)   transportation
C)   government
D)   manufacturingE) All of the above
F) A) and C)

Question 14

Unless deflation occurs, the nominal interest rate will always be greater than or equal to the real interest rate.

Accepted Answer

A) True 
 B)False

Question 15

The use of online banking would _____ the _____ cost of a high inflation rate.

Accepted Answer

A)   increase; menu
B)   decrease; shoe-leather
C)   increase; unit-of-account
D)   decrease; unit-of-accountE) A) and B)
F) A) and C)

Question 16

The unemployment rate is the:

Accepted Answer

A)   percent of the labor force that is unemployed.
B)   number of people unemployed.
C)   the labor force minus the number of people unemployed.
D)   average length of time someone is unemployed.E) A) and B)
F) A) and C)

Question 17

Suppose that a country has a progressive income tax code and taxable income is calculated in nominal terms, but the schedule of income tax rates is NOT indexed to inflation. An individual whose income keeps up with inflation over time will pay:

Accepted Answer

A)   a lower rate of the alternative minimum tax.
B)   a lower percentage of income in taxes over time.
C)   the same percentage of income in taxes over time.
D)   a higher percentage of income in taxes over time.E) A) and B)
F) A) and C)

Question 18

If the labor force totals 100 million workers and 90 million are working, then the unemployment rate is _____%.

Accepted Answer

A)   1
B)   5
C)   10
D)   90E) All of the above
F) None of the above

Question 19

A jobless recovery occurs when GDP is growing at a below-average rate and unemployment is rising.

Accepted Answer

A) True 
 B)False

Question 20

An example of structural unemployment is a(n) :

Accepted Answer

A)   autoworker who is temporarily laid off because of a decline in sales.
B)   geologist who is permanently laid off because of an increase in wages won by labor unions.
C)   worker at a fast-food restaurant who quits work and attends college.
D)   real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California.E) A) and B)
F) None of the above

Exam 8: Unemployment and Inflation

A jobless recovery occurs when GDP is growing at a below-average rate and unemployment is rising.

Correct Answer
verified

In 2017, 10 million people did not have a job but were actively looking for employment, and 85 million people had either a full-time or a part-time job. The unemployment rate in 2017 was _____%.

Correct Answer
verified

The U.S. inflation rate was lower in the 2000s than it was in the 1970s.

Correct Answer
verified

Unless deflation occurs, the nominal interest rate will always be greater than or equal to the real interest rate.

Correct Answer
verified

The unemployment rate is the:

Correct Answer
verified

A worker classified as frictionally unemployed is one who is:

Correct Answer
verified

If deflation occurs and your income is fixed, your real income:

Correct Answer
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Correct Answer
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Use the following to answer questions: -(Table: Population Data for Estill County) Use Table: Population Data for Estill County. How many people are in the labor force?

Correct Answer
verified

Increases in the average level of prices are called:

Correct Answer
verified

The labor force is considered to be:

Correct Answer
verified

The increased availability of automatic teller machines has decreased the shoe-leather costs of high inflation.

Correct Answer
verified

During Brazil's hyperinflation of the 1990s, the economy lost real resources when the _____ sector grew very large to cope with the consequences of the high rate of inflation.

Correct Answer
verified

An example of structural unemployment is a(n) :

Correct Answer
verified

The use of online banking would _ the _ cost of a high inflation rate.

Correct Answer
verified

If the labor force totals 100 million workers and 90 million are working, then the unemployment rate is _____%.

Correct Answer
verified

Suppose that a country has a progressive income tax code and taxable income is calculated in nominal terms, but the schedule of income tax rates is NOT indexed to inflation. An individual whose income keeps up with inflation over time will pay:

Correct Answer
verified

Employment is the total:

Correct Answer
verified

Use the following to answer questions: -(Table: Price Levels) Use Table: Price Levels. What is the rate of inflation from 2013 to 2014?

Correct Answer
verified

When the price level increases, everyone becomes poorer.

Correct Answer
verified

Exam 8: Unemployment and Inflation

A jobless recovery occurs when GDP is growing at a below-average rate and unemployment is rising.

Correct AnswerverifiedShow Answer

In 2017, 10 million people did not have a job but were actively looking for employment, and 85 million people had either a full-time or a part-time job. The unemployment rate in 2017 was _____%.

Correct AnswerverifiedShow Answer

The U.S. inflation rate was lower in the 2000s than it was in the 1970s.

Correct AnswerverifiedShow Answer

Unless deflation occurs, the nominal interest rate will always be greater than or equal to the real interest rate.

Correct AnswerverifiedShow Answer

The unemployment rate is the:

Correct AnswerverifiedShow Answer

A worker classified as frictionally unemployed is one who is:

Correct AnswerverifiedShow Answer

If deflation occurs and your income is fixed, your real income:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Use the following to answer questions: -(Table: Population Data for Estill County) Use Table: Population Data for Estill County. How many people are in the labor force?

Correct AnswerverifiedShow Answer

Increases in the average level of prices are called:

Correct AnswerverifiedShow Answer

The labor force is considered to be:

Correct AnswerverifiedShow Answer

The increased availability of automatic teller machines has decreased the shoe-leather costs of high inflation.

Correct AnswerverifiedShow Answer

During Brazil's hyperinflation of the 1990s, the economy lost real resources when the _____ sector grew very large to cope with the consequences of the high rate of inflation.

Correct AnswerverifiedShow Answer

An example of structural unemployment is a(n) :

Correct AnswerverifiedShow Answer

The use of online banking would _____ the _____ cost of a high inflation rate.

Correct AnswerverifiedShow Answer

If the labor force totals 100 million workers and 90 million are working, then the unemployment rate is _____%.

Correct AnswerverifiedShow Answer

Suppose that a country has a progressive income tax code and taxable income is calculated in nominal terms, but the schedule of income tax rates is NOT indexed to inflation. An individual whose income keeps up with inflation over time will pay:

Correct AnswerverifiedShow Answer

Employment is the total:

Correct AnswerverifiedShow Answer

Use the following to answer questions: -(Table: Price Levels) Use Table: Price Levels. What is the rate of inflation from 2013 to 2014?

Correct AnswerverifiedShow Answer

When the price level increases, everyone becomes poorer.

Correct AnswerverifiedShow Answer

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The use of online banking would _ the _ cost of a high inflation rate.

Correct Answer
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