Question 1

Which of the following periods was not characterized by inflation in the U.S. economic history?

Accepted Answer

A)   1917-1920
B)   1929-1933
C)   1947
D)   1978-1980
E)   1980-1989F) B) and D)
G) None of the above

Question 2

During periods of inflation, all prices increase.

Accepted Answer

A) True 
 B)False

Question 3

The labor force participation rate for women in the United States has _____.

Accepted Answer

A)   stayed the same over the last 30 years
B)   increased significantly since the 1950s
C)   decreased significantly since the 1950s
D)   fluctuated substantially both upward and downward since the 1950s
E)   increased only very slightly since the 1950sF) B) and C)
G) None of the above

Question 4

Consider an economy made up of 100 people sixteen years of age and older, 60 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The number of people in the labor force is _____.

Accepted Answer

A)   30
B)   60
C)   85
D)   90
E)   70F) A) and D)
G) B) and E)

Question 5

An individual with a Ph.D. in physics who can find employment only in a pizza parlor would be considered:

Accepted Answer

A)   discouraged.
B)   underemployed.
C)   overemployed.
D)   voluntarily unemployed.
E)   long-term unemployed.F) All of the above
G) None of the above

Question 6

Unanticipated inflation generally hurts borrowers and benefits lenders.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following decades was characterized by the highest inflation rate in the U.S.?

Accepted Answer

A)   1920s
B)   1930s
C)   1950s
D)   1970s
E)   1960sF) B) and D)
G) B) and E)

Question 8

During periods of high inflation, people want to hold as much money as possible.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following people would be counted as employed?

Accepted Answer

A)   A retired naval officer
B)   A high school student
C)   A stay-at-home father
D)   A teenager who has given up looking for work after a year of trying
E)   A ski instructor who is working during the summerF) A) and B)
G) None of the above

Question 10

The unemployment rate does not reflect the true extent of the unemployment problem. Which of the following groups is not counted as unemployed in the official unemployment statistics?

Accepted Answer

A)   The underemployed and the cyclically unemployed
B)   The underemployed and discouraged workers
C)   Discouraged workers and the frictionally unemployed
D)   The frictionally unemployed and the structurally unemployed
E)   The cyclically unemployed and the frictionally unemployedF) A) and E)
G) A) and B)

Question 11

Which of the following people would be counted in the labor force?

Accepted Answer

A)   Chou, who lost his job and last looked for work three months ago
B)   Stephanie, who holds a Ph.D. in history but can only find part-time employment at a fast food restaurant
C)   Jordan, who would like to work as a stockbroker but is a stay-at-home father
D)   Steffan, who is a patient in a mental hospital
E)   Monique, age 90, who is enjoying her retirement in MontanaF) A) and C)
G) B) and D)

Question 12

Since World War II, the consumer price index has increased by an average of _____.

Accepted Answer

A)   1.4 percent per year
B)   2.1 percent per year
C)   6.4 percent per year
D)   5.6 percent per year
E)   3.5 percent per yearF) A) and E)
G) A) and D)

Question 13

The nominal interest rate is determined in the market for loanable funds.

Accepted Answer

A) True 
 B)False

Question 14

Suppose the total population of an economy is 150 million, the labor force is 100 million, and the unemployment is 94 million. The unemployment rate is _____.

Accepted Answer

A)   6 percent
B)   80 percent
C)   94 percent
D)   10 percent
E)   15 percentF) B) and D)
G) D) and E)

Question 15

Anticipated inflation causes more problems in the economy than unanticipated inflation.

Accepted Answer

A) True 
 B)False

Question 16

Unemployment arising from a mismatch of skills is called:

Accepted Answer

A)   frictional unemployment.
B)   structural unemployment.
C)   seasonal unemployment.
D)   cyclical unemployment.
E)   underemployment.F) A) and E)
G) C) and D)

Question 17

A worker would be hurt least by inflation when the:

Accepted Answer

A)   worker anticipates inflation and increases savings at the bank.
B)   worker is protected by a cost-of-living adjustment clause in an employment contract.
C)   the price level increases but at a decreasing rate.
D)   worker is protected by fixed annual increases in wages and benefits in an employment contract.
E)   government increases the level of social security retirement benefits to correct for the effects of unanticipated inflation.F) None of the above
G) B) and C)

Question 18

The unemployment rate rises any time there is an increase in the number of unemployed persons.

Accepted Answer

A) True 
 B)False

Question 19

In April 2010, the U.S. economy added 290,000 jobs but the unemployment rate still increased from 9.7 percent to 9.9 percent. Which of the following best explains this situation?

Accepted Answer

A)   The size of the labor force shrunk.
B)   The number of unemployed workers also increased, but by a smaller percentage.
C)   The number of illegal immigrants increased substantially.
D)   The number of discouraged workers increased substantially.
E)   The number of unemployed workers also increased, but by an even greater percentage.F) A) and D)
G) A) and C)

Question 20

An increase in the supply of loanable funds, other things constant, will increase the interest rate.

Accepted Answer

A) True 
 B)False

Exam 7: Unemployment and Inflation

The labor force participation rate for women in the United States has _____.

Correct AnswerverifiedShow Answer

The nominal interest rate is determined in the market for loanable funds.

Correct AnswerverifiedShow Answer

Suppose the total population of an economy is 150 million, the labor force is 100 million, and the unemployment is 94 million. The unemployment rate is _____.

Correct AnswerverifiedShow Answer

Which of the following periods was not characterized by inflation in the U.S. economic history?

Correct AnswerverifiedShow Answer

In April 2010, the U.S. economy added 290,000 jobs but the unemployment rate still increased from 9.7 percent to 9.9 percent. Which of the following best explains this situation?

Correct AnswerverifiedShow Answer

Consider an economy made up of 100 people sixteen years of age and older, 60 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The number of people in the labor force is _____.

Correct AnswerverifiedShow Answer

Unemployment arising from a mismatch of skills is called:

Correct AnswerverifiedShow Answer

Which of the following people would be counted as employed?

Correct AnswerverifiedShow Answer

An individual with a Ph.D. in physics who can find employment only in a pizza parlor would be considered:

Correct AnswerverifiedShow Answer

Which of the following decades was characterized by the highest inflation rate in the U.S.?

Correct AnswerverifiedShow Answer

Since World War II, the consumer price index has increased by an average of _____.

Correct AnswerverifiedShow Answer

A worker would be hurt least by inflation when the:

Correct AnswerverifiedShow Answer

An increase in the supply of loanable funds, other things constant, will increase the interest rate.

Correct AnswerverifiedShow Answer

During periods of inflation, all prices increase.

Correct AnswerverifiedShow Answer

The unemployment rate does not reflect the true extent of the unemployment problem. Which of the following groups is not counted as unemployed in the official unemployment statistics?

Correct AnswerverifiedShow Answer

During periods of high inflation, people want to hold as much money as possible.

Correct AnswerverifiedShow Answer

The unemployment rate rises any time there is an increase in the number of unemployed persons.

Correct AnswerverifiedShow Answer

Unanticipated inflation generally hurts borrowers and benefits lenders.

Correct AnswerverifiedShow Answer

Anticipated inflation causes more problems in the economy than unanticipated inflation.

Correct AnswerverifiedShow Answer

Which of the following people would be counted in the labor force?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified