Question 1

Which of the following measures real purchasing power?

Accepted Answer

A)   Real income.
B)   Nominal income.
C)   Increase in income.
D)   Stable income.E) None of the above
F) B) and D)

Question 2

Hysteresis occurs when:

Accepted Answer

A)   people get agitated over the level of unemployment.
B)   people become easier to employ because of a variety of skilled labour available.
C)   the full-employment rate of unemployment increases as the actual unemployment rate increases.
D)   unemployment falls quickly after a recession.E) A) and B)
F) B) and C)

Question 3

Cyclical unemployment is caused by:

Accepted Answer

A)   shifts in the job skills required in the economy.
B)   seasonal layoffs.
C)   declines in real GDP.
D)   cyclical changes in the job skills among workers.E) C) and D)
F) A) and B)

Question 4

Jan is an engineer working for the roads department in a small town in New South Wales. When the government cut spending, Jan and 99 others were laid off. The only other business in the town is growing grapes to be made into raisins, but the growers refuse to hire laid-off engineers, knowing they will leave at the first opportunity. The unemployment Jan is experiencing is:

Accepted Answer

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

Question 5

Demand-pull inflation is due to:

Accepted Answer

A)   minimum wage laws.
B)   labour cost increases.
C)   excess total spending.
D)   tax increases.E) C) and D)
F) B) and D)

Question 6

The civilian labour force is:

Accepted Answer

A)   the number of people (including students)  aged 15 and over who are unemployed.
B)   the number of people (including students)  aged 15 and over who are either employed or unemployed.
C)   the number of people (including students)  aged 15 and over who are either employed or unemployed, excluding people in hospitals.
D)   the number of people (excluding students)  aged 15 and over who are either employed or unemployed, excluding members of the armed forces and certain categories of people.E) A) and B)
F) C) and D)

Question 7

During the 1990s, which of the following countries had the highest unemployment rate?

Accepted Answer

A)   The United States.
B)   Japan.
C)   Australia.
D)   France.E) None of the above
F) A) and B)

Question 8

Real income is the purchasing power of nominal (money) income.

Accepted Answer

A) True 
 B)False

Question 9

Workers who may be between jobs are considered:

Accepted Answer

A)   frictionally unemployed.
B)   structurally unemployed.
C)   cyclically unemployed.
D)   unemployable.E) B) and C)
F) C) and D)

Question 10

Some economists claim that the natural rate of unemployment has increased over the past 30 years because:

Accepted Answer

A)   of a decrease in the participation rate of women in the workforce.
B)   of hypocrites.
C)   the long-term unemployed gain valuable skills while they are out of work.
D)   unemployment benefits are high enough to create incentives not to work.E) B) and C)
F) A) and B)

Question 11

The unemployment rate might be understating unemployment because of:

Accepted Answer

A)   a variable interest rate.
B)   overexploited workers.
C)   underemployed workers.
D)   disinterested workers.E) A) and B)
F) All of the above

Question 12

The consumer price index is also called:

Accepted Answer

A)   the price of living index.
B)   the cost of surviving index.
C)   the cost of living index.
D)   the price of underemployment.E) A) and D)
F) All of the above

Question 13

An example of structural unemployment includes:

Accepted Answer

A)   a textile worker who quits one job and waits for the new job to begin.
B)   the worker of the factory that has closed and he lacks the skills to obtain a new job.
C)   a computer programmer who becomes rich and leaves the labour force.
D)   a construction worker who was temporarily laid off due to the end of the construction contract.E) B) and D)
F) All of the above

Question 14

The CPI measures:

Accepted Answer

A)   changes in the prices of imported goods and services.
B)   changes in the prices of exported goods and services.
C)   changes in the production of imported goods and services.
D)   changes in the production of exported goods and services.E) All of the above
F) C) and D)

Question 15

The CPI is used to determine:

Accepted Answer

A)   how higher quality products increase the wellbeing of consumers.
B)   how the cost of living changed from one period to another.
C)   the changes in prices of all consumer goods and services.
D)   how changing prices affect the export of goods and services.E) None of the above
F) A) and C)

Question 16

The consumer price index (CPI)  compares the prices of:

Accepted Answer

A)   all goods and services in the economy compared to the prices of those goods and services in a base year.
B)   consumer goods and services that a household purchases to the prices of those goods and services purchased in a base year.
C)   producer goods and services that are made for consumers to the prices of those goods and services in a base year.
D)   goods and services that are purchased by producers to the prices of those goods and services in a base year.E) All of the above
F) A) and B)

Question 17

Part-time workers who want full-time work are counted as only partially employed in the official unemployment statistics.

Accepted Answer

A) True 
 B)False

Question 18

When actual real GDP output is below full-employment real GDP, the GDP measures the cost of cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 19

Narrbegin Exhibit 13.1 Consumer price index
   Year  Consumer price index 11002100310541255150\begin{array} {| c | c |} \hline 	ext { Year } & 	ext { Consumer price index } \\hline 1 & 100 \\hline 2 & 100 \\hline 3 & 105 \\hline 4 & 125 \\hline 5 & 150 \\hline\end{array} Year 12345​ Consumer price index 100100105125150​​ 
-As shown in Exhibit 13.1, the rate of inflation for Year 2 is:

Accepted Answer

A)   5 per cent.
B)   10 per cent.
C)   20 per cent.
D)   25 per cent. E) C) and D)
F) A) and C)

Question 20

Which of the following statements is true?

Accepted Answer

A)   The four phases of the business cycle, in order, are: peak, recovery, trough, recession.
B)   When unemployment is rising then real GDP is rising.
C)   The economic problem typically associated with a recovery is rising unemployment.
D)   Full employment exists in an economy when the unemployment rate equals the sum of frictional, seasonal and structural unemployment rates.E) B) and D)
F) B) and C)

Exam 14: Inflation and Unemployment

When actual real GDP output is below full-employment real GDP, the GDP measures the cost of cyclical unemployment.

Correct Answer
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Cyclical unemployment is caused by:

Correct Answer
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The civilian labour force is:

Correct Answer
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Correct Answer
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The unemployment rate might be understating unemployment because of:

Correct Answer
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Part-time workers who want full-time work are counted as only partially employed in the official unemployment statistics.

Correct Answer
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Which of the following measures real purchasing power?

Correct Answer
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The CPI measures:

Correct Answer
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The consumer price index (CPI) compares the prices of:

Correct Answer
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An example of structural unemployment includes:

Correct Answer
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Hysteresis occurs when:

Correct Answer
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The consumer price index is also called:

Correct Answer
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Some economists claim that the natural rate of unemployment has increased over the past 30 years because:

Correct Answer
verified

Real income is the purchasing power of nominal (money) income.

Correct Answer
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The CPI is used to determine:

Correct Answer
verified

Narrbegin Exhibit 13.1 Consumer price index $\begin{array} {| c | c |} \hline \text { Year } & \text { Consumer price index } \\\hline 1 & 100 \\\hline 2 & 100 \\\hline 3 & 105 \\\hline 4 & 125 \\\hline 5 & 150 \\\hline\end{array}$ -As shown in Exhibit 13.1, the rate of inflation for Year 2 is:

Correct Answer
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Workers who may be between jobs are considered:

Correct Answer
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Demand-pull inflation is due to:

Correct Answer
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During the 1990s, which of the following countries had the highest unemployment rate?

Correct Answer
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Which of the following statements is true?

Correct Answer
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Exam 14: Inflation and Unemployment

When actual real GDP output is below full-employment real GDP, the GDP measures the cost of cyclical unemployment.

Correct AnswerverifiedShow Answer

Cyclical unemployment is caused by:

Correct AnswerverifiedShow Answer

The civilian labour force is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The unemployment rate might be understating unemployment because of:

Correct AnswerverifiedShow Answer

Part-time workers who want full-time work are counted as only partially employed in the official unemployment statistics.

Correct AnswerverifiedShow Answer

Which of the following measures real purchasing power?

Correct AnswerverifiedShow Answer

The CPI measures:

Correct AnswerverifiedShow Answer

The consumer price index (CPI) compares the prices of:

Correct AnswerverifiedShow Answer

An example of structural unemployment includes:

Correct AnswerverifiedShow Answer

Hysteresis occurs when:

Correct AnswerverifiedShow Answer

The consumer price index is also called:

Correct AnswerverifiedShow Answer

Some economists claim that the natural rate of unemployment has increased over the past 30 years because:

Correct AnswerverifiedShow Answer

Real income is the purchasing power of nominal (money) income.

Correct AnswerverifiedShow Answer

The CPI is used to determine:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Workers who may be between jobs are considered:

Correct AnswerverifiedShow Answer

Demand-pull inflation is due to:

Correct AnswerverifiedShow Answer

During the 1990s, which of the following countries had the highest unemployment rate?

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

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