Question 1

Which of the following statements is true?

Accepted Answer

A)  If the number of unemployed falls and the number of people in the labor force rises,the unemployment rate falls.
B)  Both liberals and conservatives feel that the official unemployment rate is too low.
C)  Greater participation by young people in the labor force tends to push the unemployment rate down.
D)  The unemployment rate for blacks is virtually the same as it is for whites.
E)  All of the statements are truE.F) D) and E)
G) A) and E)

Question 2

If the CPI changed from 210.6 in 2007 to 209.4 in 2008 to 206.3 in 2009,this would be an example of

Accepted Answer

A)  disinflation.
B)  escalating inflation.
C)  creeping inflation.
D)  deflation.E) A) and B)
F) None of the above

Question 3

A lender need not be penalized by inflation if the

Accepted Answer

A)  long-term rate of inflation is less than the short-term rate of inflation.
B)  short-term rate of inflation is less than the long-term rate of inflation.
C)  lender correctly anticipates inflation and increases the nominal interest rate accordingly.
D)  inflation is unanticipated by both borrower and lender.E) All of the above
F) B) and C)

Question 4

Statement I: Deflation and disinflation are virtually identical.
Statement II: Inflation got progressively worse through most of the 1980s.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.E) A) and B)
F) All of the above

Question 5

Suppose the CPI in 1990 is 500,with 1967 as the base year.On average,how much money must be spent in 1990 to purchase the same quantity of goods and services that could have been bought with $10 in 1967?

Accepted Answer

A)  $50
B)  $5
C)  $400
D)  $500
E)  None of the choices are correctF) None of the above
G) B) and D)

Question 6

The unemployment rate is computed by dividing the _____ by the ____.

Accepted Answer

number of ...

Question 7

The recovery phase of the business cycle is _____ followed by the prosperity phase.

Accepted Answer

A)  never
B)  sometimes
C)  usually
D)  alwaysE) C) and D)
F) B) and C)

Question 8

Most business cycle theories are

Accepted Answer

A)  endogenous.
B)  exogenous.
C)  both endogenous and exogenous.
D)  neither exogenous nor endogenous.E) A) and B)
F) A) and D)

Question 9

Discouraged workers

Accepted Answer

A)  have jobs,but are unhappy with them.
B)  are officially unemployed.
C)  want to work,but have given up looking for jobs.
D)  are not working and don't want to work.E) C) and D)
F) None of the above

Question 10

If prices have risen 220 percent since the base year,the current level of the CPI is

Accepted Answer

A)  20.
B)  120.
C)  220.
D)  320.
E)  420.F) B) and E)
G) A) and C)

Question 11

An increase in the quality of items included in the Consumer Price Index would cause the index to

Accepted Answer

A)  overstate the true amount of unemployment.
B)  overstate the true amount of inflation.
C)  understate the true amount of unemployment.
D)  understate the true amount of inflation.E) A) and B)
F) B) and C)

Question 12

We have had a long-term downward trend in unemployment since the year _____ until _____.

Accepted Answer

The answer of We have had a long-term downward trend...

Question 13

Stagflation describes a situation in the economy where the economy is

Accepted Answer

A)  growing with a simultaneous inflation.
B)  stagnant and prices are falling.
C)  growing and prices are falling.
D)  stagnant and prices are stable.
E)  stagnant and prices are rising.F) A) and B)
G) A) and C)

Question 14

If the number of employed people goes down at the same time that the unemployment rate goes down,then we may conclude that some people must have

Accepted Answer

A)  left the labor force.
B)  entered the labor force.
C)  been forced off unemployment benefits.
D)  either retired or dieD.E) None of the above
F) All of the above

Question 15

A recession would be a decline in real GDP for at least

Accepted Answer

A)  one business quarter.
B)  two business quarters.
C)  one business year.
D)  two business years.
E)  five business years.F) None of the above
G) A) and E)

Question 16

When there is no cyclical unemployment,the overall rate of unemployment is ____ percent.

Accepted Answer

The answer of When there is no cyclical unemployment,the overall...

Question 17

In 2008 we were in the ___________ phase of the business cycle.

Accepted Answer

The answer of In 2008 we were in the ___________...

Question 18

In October 2009 our unemployment rate averaged _________%.

Accepted Answer

The answer of In October 2009 our unemployment rate averaged...

Question 19

Unemployment caused by economic decline or recession is called

Accepted Answer

A)  frictional unemployment.
B)  cyclical unemployment.
C)  natural unemployment.
D)  necessary unemployment.
E)  structural unemployment.F) C) and D)
G) None of the above

Question 20

In general _____ by unanticipated inflation.

Accepted Answer

A)  creditors and debtors are both helped
B)  creditors and debtors are both hurt
C)  creditors are helped and debtors are hurt
D)  creditors are hurt and debtors are helpedE) A) and C)
F) A) and B)

Exam 10: Economic Fluctuations, unemployment, and Inflation

The recovery phase of the business cycle is _____ followed by the prosperity phase.

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Statement I: Deflation and disinflation are virtually identical. Statement II: Inflation got progressively worse through most of the 1980s.

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If the CPI changed from 210.6 in 2007 to 209.4 in 2008 to 206.3 in 2009,this would be an example of

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A recession would be a decline in real GDP for at least

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Most business cycle theories are

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Which of the following statements is true?

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We have had a long-term downward trend in unemployment since the year _____ until _____.

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Discouraged workers

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When there is no cyclical unemployment,the overall rate of unemployment is ____ percent.

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In 2008 we were in the ___________ phase of the business cycle.

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Unemployment caused by economic decline or recession is called

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An increase in the quality of items included in the Consumer Price Index would cause the index to

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A lender need not be penalized by inflation if the

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Stagflation describes a situation in the economy where the economy is

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If the number of employed people goes down at the same time that the unemployment rate goes down,then we may conclude that some people must have

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If prices have risen 220 percent since the base year,the current level of the CPI is

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In general _____ by unanticipated inflation.

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Suppose the CPI in 1990 is 500,with 1967 as the base year.On average,how much money must be spent in 1990 to purchase the same quantity of goods and services that could have been bought with $10 in 1967?

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The unemployment rate is computed by dividing the _____ by the ____.

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In October 2009 our unemployment rate averaged _________%.

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We have had a long-term downward trend in unemployment since the year _ until _.

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The unemployment rate is computed by dividing the _ by the .

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number of ...
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