Question 1

If the U.S. dollar were replaced with a "new dollar" at an exchange rate of 1 new dollar for 4 old dollars, then an hourly wage of $12 would become an hourly wage of 3 new dollars.

Accepted Answer

A) True 
 B)False

Question 2

Menu costs are the:

Accepted Answer

A)   costs of money becoming less reliable.
B)   real costs of changing listed prices.
C)   increase in the transaction costs caused by inflation.
D)   adjustments to the cost of living.E) None of the above
F) C) and D)

Question 3

Use the following to answer questions 
-(Table: The Consumer Price Index (CPI) )  Look at the table The Consumer Price Index (CPI) . The inflation rate between 2011 and 2012 was:

Accepted Answer

A)   10%.
B)   3%.
C)   1.4%.
D)   24.6%.E) A) and C)
F) B) and C)

Question 4

Which annual rate of inflation is hyperinflation?

Accepted Answer

A)   5%
B)   13%
C)   25%
D)   2,000%E) A) and B)
F) A) and C)

Question 5

Which of the following statements is FALSE?

Accepted Answer

A)   Both frictional and structural unemployment can occur even if unemployment is at its natural level.
B)   Cyclical unemployment is unemployment in excess of the natural rate.
C)   A new college graduate looking for that first professional job may be frictionally unemployed.
D)   Efficiency wages may cause frictional unemployment.E) A) and B)
F) None of the above

Question 6

If the wage rate is $9 per hour and the price level is 2, then the real wage is:

Accepted Answer

A)   $18.
B)   $11.
C)   $7.
D)   $4.50.E) A) and D)
F) All of the above

Question 7

If actual unemployment is 6.2% and the natural rate is 4%, cyclical unemployment is:

Accepted Answer

A)   6.2%.
B)   10.2%.
C)   4%.
D)   2.2%.E) None of the above
F) All of the above

Question 8

The use of online banking increases the unit-of-account cost of a high inflation rate.

Accepted Answer

A) True 
 B)False

Question 9

A bank makes a loan for one year. The nominal annual interest rate is 7.5%. The real rate is 4%. Over the course of the year, overall prices increase by 4%. This rate of inflation hurt the _____ because the actual rate of inflation was _____ than the anticipated rate.

Accepted Answer

A)   borrower; lower
B)   borrower; higher
C)   lender; higher
D)   lender; lowerE) A) and C)
F) None of the above

Question 10

A jobless recovery occurs when GDP is decreasing and unemployment is rising.

Accepted Answer

A) True 
 B)False

Question 11

A survey reveals that on a small island initially 1,000 people have jobs, 250 people are not working but are looking for jobs, and 450 people are neither working nor looking for work. Suppose that 150 of the 450 people who weren't looking for work now begin looking for work. There are now 400 people looking for work and 1,000 people working. The unemployment rate:

Accepted Answer

A)   falls to 20%.
B)   rises to 28.6%.
C)   rises to 50%.
D)   Nothing happens to the unemployment rate, because these people weren't working before and they aren't working now.E) A) and C)
F) None of the above

Question 12

Since the 1960s, the U.S. price level has _____ and the inflation rate has _____.

Accepted Answer

A)   remained constant; increased
B)   increased; fluctuated
C)   decreased; decreased
D)   fluctuated; remained constantE) A) and D)
F) B) and C)

Question 13

Use the following to answer questions 
Figure: The Effect of a Minimum Wage F. Structural unemployment will equal: A)  QS - QD. B)  QE - QD. C)  QS - QE. D)  zero." class="answers-bank-image d-inline" rel="preload" >
-(Figure: The Effect of a Minimum Wage)  Look at the figure The Effect of a Minimum Wage. Suppose the labor market is in equilibrium at E when the government imposes a minimum wage of WF. Structural unemployment will equal:

Accepted Answer

A)   QS - QD.
B)   QE - QD.
C)   QS - QE.
D)   zero.E) All of the above
F) A) and B)

Question 14

The Republic of Livonia has an adult population of 100 million; 60% of Livonia's population is employed, and 10% of the people are unemployed. The labor force participation rate in Livonia is:

Accepted Answer

A)   70%.
B)   60%.
C)   7%.
D)   10%.E) A) and D)
F) B) and D)

Question 15

When the demand for labor is falling and employers have committed to high wages, _____ unemployment will result.

Accepted Answer

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

Question 16

Use the following to answer questions 
-(Table: Labor Force Distribution)  Look at the table Labor Force Distribution. The unemployment rate is:

Accepted Answer

A)   3.85%.
B)   10%.
C)   4.55%.
D)   6.75%.E) B) and D)
F) B) and C)

Question 17

The rate of unemployment when the economy is at full employment is:

Accepted Answer

A)   zero.
B)   the natural rate.
C)   the structural rate.
D)   less than the full employment rate of unemployment.E) B) and D)
F) A) and B)

Question 18

The natural rate of unemployment:

Accepted Answer

A)   would increase if a larger percentage of the labor force were over 25 years old.
B)   would increase if union membership fell.
C)   would increase if unemployment benefits were increased.
D)   will always remain fixed.E) All of the above
F) A) and D)

Question 19

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) None of the above
F) A) and B)

Question 20

If Jim's income is $80,000 and the price level is 4, then Jim's real income is:

Accepted Answer

A)   $20,000.
B)   $320,000.
C)   $84,000.
D)   $80,000.E) B) and C)
F) A) and D)

Exam 22: Unemployment and Inflation

The natural rate of unemployment:

Correct Answer
verified

If the U.S. dollar were replaced with a "new dollar" at an exchange rate of 1 new dollar for 4 old dollars, then an hourly wage of $12 would become an hourly wage of 3 new dollars.

Correct Answer
verified

Which annual rate of inflation is hyperinflation?

Correct Answer
verified

The use of online banking increases the unit-of-account cost of a high inflation rate.

Correct Answer
verified

If Jim's income is $80,000 and the price level is 4, then Jim's real income is:

Correct Answer
verified

A bank makes a loan for one year. The nominal annual interest rate is 7.5%. The real rate is 4%. Over the course of the year, overall prices increase by 4%. This rate of inflation hurt the _ because the actual rate of inflation was _ than the anticipated rate.

Correct Answer
verified

If actual unemployment is 6.2% and the natural rate is 4%, cyclical unemployment is:

Correct Answer
verified

A jobless recovery occurs when GDP is decreasing and unemployment is rising.

Correct Answer
verified

Menu costs are the:

Correct Answer
verified

Correct Answer
verified

When the demand for labor is falling and employers have committed to high wages, _____ unemployment will result.

Correct Answer
verified

If the wage rate is $9 per hour and the price level is 2, then the real wage is:

Correct Answer
verified

The Republic of Livonia has an adult population of 100 million; 60% of Livonia's population is employed, and 10% of the people are unemployed. The labor force participation rate in Livonia is:

Correct Answer
verified

Which of the following statements is FALSE?

Correct Answer
verified

The rate of unemployment when the economy is at full employment is:

Correct Answer
verified

Since the 1960s, the U.S. price level has _ and the inflation rate has _.

Correct Answer
verified

Use the following to answer questions -(Table: The Consumer Price Index (CPI) ) Look at the table The Consumer Price Index (CPI) . The inflation rate between 2011 and 2012 was:

Correct Answer
verified

Use the following to answer questions Figure: The Effect of a Minimum Wage -(Figure: The Effect of a Minimum Wage) Look at the figure The Effect of a Minimum Wage. Suppose the labor market is in equilibrium at E when the government imposes a minimum wage of W_F. Structural unemployment will equal:

Correct Answer
verified

Employment is the total:

Correct Answer
verified

Use the following to answer questions -(Table: Labor Force Distribution) Look at the table Labor Force Distribution. The unemployment rate is:

Correct Answer
verified

Exam 22: Unemployment and Inflation

The natural rate of unemployment:

Correct AnswerverifiedShow Answer

If the U.S. dollar were replaced with a "new dollar" at an exchange rate of 1 new dollar for 4 old dollars, then an hourly wage of $12 would become an hourly wage of 3 new dollars.

Correct AnswerverifiedShow Answer

Which annual rate of inflation is hyperinflation?

Correct AnswerverifiedShow Answer

The use of online banking increases the unit-of-account cost of a high inflation rate.

Correct AnswerverifiedShow Answer

If Jim's income is $80,000 and the price level is 4, then Jim's real income is:

Correct AnswerverifiedShow Answer

A bank makes a loan for one year. The nominal annual interest rate is 7.5%. The real rate is 4%. Over the course of the year, overall prices increase by 4%. This rate of inflation hurt the _____ because the actual rate of inflation was _____ than the anticipated rate.

Correct AnswerverifiedShow Answer

If actual unemployment is 6.2% and the natural rate is 4%, cyclical unemployment is:

Correct AnswerverifiedShow Answer

A jobless recovery occurs when GDP is decreasing and unemployment is rising.

Correct AnswerverifiedShow Answer

Menu costs are the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When the demand for labor is falling and employers have committed to high wages, _____ unemployment will result.

Correct AnswerverifiedShow Answer

If the wage rate is $9 per hour and the price level is 2, then the real wage is:

Correct AnswerverifiedShow Answer

The Republic of Livonia has an adult population of 100 million; 60% of Livonia's population is employed, and 10% of the people are unemployed. The labor force participation rate in Livonia is:

Correct AnswerverifiedShow Answer

Which of the following statements is FALSE?

Correct AnswerverifiedShow Answer

The rate of unemployment when the economy is at full employment is:

Correct AnswerverifiedShow Answer

Since the 1960s, the U.S. price level has _____ and the inflation rate has _____.

Correct AnswerverifiedShow Answer

Use the following to answer questions -(Table: The Consumer Price Index (CPI) ) Look at the table The Consumer Price Index (CPI) . The inflation rate between 2011 and 2012 was:

Correct AnswerverifiedShow Answer

Use the following to answer questions Figure: The Effect of a Minimum Wage -(Figure: The Effect of a Minimum Wage) Look at the figure The Effect of a Minimum Wage. Suppose the labor market is in equilibrium at E when the government imposes a minimum wage of WF. Structural unemployment will equal:

Correct AnswerverifiedShow Answer

Employment is the total:

Correct AnswerverifiedShow Answer

Use the following to answer questions -(Table: Labor Force Distribution) Look at the table Labor Force Distribution. The unemployment rate is:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A bank makes a loan for one year. The nominal annual interest rate is 7.5%. The real rate is 4%. Over the course of the year, overall prices increase by 4%. This rate of inflation hurt the _ because the actual rate of inflation was _ than the anticipated rate.

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

Since the 1960s, the U.S. price level has _ and the inflation rate has _.

Correct Answer
verified

Correct Answer
verified

Use the following to answer questions Figure: The Effect of a Minimum Wage -(Figure: The Effect of a Minimum Wage) Look at the figure The Effect of a Minimum Wage. Suppose the labor market is in equilibrium at E when the government imposes a minimum wage of W_F. Structural unemployment will equal:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified