Question 1

The Business cycle is at its expansionary peak when the economy is at or near full employment.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is a variation of cost-push inflation?

Accepted Answer

A)  Profit-push inflation.
B)  Demand-pull inflation.
C)  Export-push inflation.
D)  Import-pull inflation.E) A) and B)
F) A) and C)

Question 3

Assume that the consumer price index in 2016 was 120 and in 2017 it was 126.What was the rate of inflation in 2017?

Accepted Answer

A)  3%
B)  5%
C)  6%
D)  20%
E)  26%F) None of the above
G) D) and E)

Question 4

In 2015,which Canadian province had the highest unemployment rate?

Accepted Answer

A)  British Columbia
B)  Saskatchewan
C)  Quebec
D)  New Brunswick
E)  Newfoundland and LabradorF) C) and D)
G) B) and E)

Question 5

Which of the following statements is correct if we apply the "rule of 70" to a known rate of inflation?

Accepted Answer

A)  We would be able to calculate the corresponding rate of unemployment.
B)  We could determine when the value of a real asset will approach zero.
C)  We could calculate the number of years it will take for the price level to double.
D)  We could calculate the size of the GDP gap.E) C) and D)
F) B) and C)

Question 6

Below are various statistics for a hypothetical economy (all figures in millions) 
 
-Refer to the information above to answer this question.What is the participation rate of this economy?

Accepted Answer

A)  80%.
B)  60%.
C)  75%.
D)  50%.
E)  62.5%.F) A) and C)
G) None of the above

Question 7

Distinguish between real GDP and nominal GDP.

Accepted Answer

Nominal GDP is the value of GDP using cu...

Question 8

Which of the following is an example of a frictionally unemployed person?

Accepted Answer

A)  A homemaker re-entering the labour force now that her children are older but who has not yet found employment.
B)  A middle-aged man who,having quit his previous job,is searching for something more satisfying.
C)  A contract college instructor who has left her job for a year and is looking for work at another college.
D)  A recent commerce graduate seeking her first job.
E)  A pulp-mill worker is laid off because the mill's inventories are at a all-time high.F) A) and D)
G) A) and C) E

Question 9

Which of the following would lead to wage-push inflation?

Accepted Answer

A)  The economy experiences a trend of wage increases below labour productivity increases.
B)  The economy experiences an inflationary gap.
C)  Producers are able to pass a wage increase on to the consumer in the form of higher prices.
D)  Aggregate demand increases significantly.E) B) and C)
F) A) and B)

Question 10

Under what condition could the number of people employed and the number of people unemployed both increase?

Accepted Answer

A)  If the economy entered a severe recession.
B)  If the number of people in the labour force increased more than the number of people employed.
C)  If the total number of discouraged workers increased.
D)  If the total population decreased.
E)  If the number of people in the labour force grew slower than the increase in the number of people employed.F) B) and E)
G) A) and D)

Question 11

What occurs at the economy's natural rate of unemployment?

Accepted Answer

A)  The economy achieves its output potential.
B)  Frictional and structural unemployment are zero.
C)  Only frictional unemployment exists.
D)  Only structural unemployment exists.
E)  Potential GDP is above actual GDP.F) A) and B)
G) A) and C) A

Question 12

What is meant by the term the GDP Gap? How can it be calculated using Okun's Law?

Accepted Answer

The GDP Gap is the difference between wh...

Question 13

Assume that the Consumer Price Index rises from 80 in one year to 88 in the next year.What is the rate of inflation?

Accepted Answer

A)  10%.
B)  20%.
C)  12%.
D)  6%.
E)  8%.F) B) and C)
G) B) and E)

Question 14

-Refer to the information above to answer this question.What is the population in 2015?

Accepted Answer

A)  8.27
B)  17
C)  52.2
D)  61.8
E)  107.2F) B) and D)
G) B) and E)

Question 15

Assume that goods X,Y,and Z constitute a "market basket" used to compute a price index and that 2014 is the base year.
 
-Refer to the above information to answer this question.What is the annual inflation rate in 2018?

Accepted Answer

A)  0%
B)  10%
C)  12%
D)  Cannot be determined from the information.E) A) and D)
F) B) and D)

Question 16

Suppose the labour force data for Country XYZ are:
  a)What are the participation rates for Country XYZ in 2016 and 2017?
b)What are the unemployment rates for Country XYZ in 2016 and 2017?

Accepted Answer

a)2016: 77.4%,2017: ...

Question 17

How can the percentage change in real income from one year to the next be calculated?

Accepted Answer

A)  As the percentage change in nominal income plus the percentage change in the price level.
B)  As the percentage change in nominal income minus the percentage change in the price level.
C)  As the percentage change in nominal income divided by the percentage change in the price level.
D)  As the percentage change in the price level minus the percentage change in nominal income.
E)  As the percentage change in nominal income multiplied by the inflation rate.F) B) and D)
G) A) and B)

Question 18

Etruria's nominal GDP rose from $420 billion in 2013 to $450 billion in 2016.During the same period,its inflation rate was 5 percent.By what percentage did its real GDP increase?

Accepted Answer

A)  1.67%
B)  2.14%
C)  9.33%
D)  30%E) B) and C)
F) All of the above

Question 19

If the rate of inflation is 7% per year,how long will it take for the price level to double?

Accepted Answer

A)  4 years.
B)  10 years.
C)  7 years.
D)  12 years.
E)  14 years.F) None of the above
G) B) and E)

Question 20

How can the rate of inflation be calculated?

Accepted Answer

A)  By subtracting the real income from the nominal income.
B)  By subtracting last year's price index from this year's price index.
C)  By subtracting this year's price index from last year's price index,dividing the difference by this year's price index,and multiplying by 100.
D)  By subtracting last year's price index from this year's price index and dividing the difference by last year's price index and multiplying by 100.
E)  By dividing the real income by the nominal income and multiplying by 100.F) A) and E)
G) B) and E) D

Exam 4: Measuring the Economy 2: Unemployment and Inflation

The Business cycle is at its expansionary peak when the economy is at or near full employment.

Correct AnswerverifiedShow Answer

Which of the following is a variation of cost-push inflation?

Correct AnswerverifiedShow Answer

Assume that the consumer price index in 2016 was 120 and in 2017 it was 126.What was the rate of inflation in 2017?

Correct AnswerverifiedShow Answer

In 2015,which Canadian province had the highest unemployment rate?

Correct AnswerverifiedShow Answer

Which of the following statements is correct if we apply the "rule of 70" to a known rate of inflation?

Correct AnswerverifiedShow Answer

Below are various statistics for a hypothetical economy (all figures in millions) -Refer to the information above to answer this question.What is the participation rate of this economy?

Correct AnswerverifiedShow Answer

Distinguish between real GDP and nominal GDP.

Correct AnswerverifiedNominal GDP is the value of GDP using cu...View AnswerShow Answer

Which of the following is an example of a frictionally unemployed person?

Correct AnswerverifiedE

Which of the following would lead to wage-push inflation?

Correct AnswerverifiedShow Answer

Under what condition could the number of people employed and the number of people unemployed both increase?

Correct AnswerverifiedShow Answer

What occurs at the economy's natural rate of unemployment?

Correct AnswerverifiedA

What is meant by the term the GDP Gap? How can it be calculated using Okun's Law?

Correct AnswerverifiedThe GDP Gap is the difference between wh...View AnswerShow Answer

Assume that the Consumer Price Index rises from 80 in one year to 88 in the next year.What is the rate of inflation?

Correct AnswerverifiedShow Answer

-Refer to the information above to answer this question.What is the population in 2015?

Correct AnswerverifiedShow Answer

Assume that goods X,Y,and Z constitute a "market basket" used to compute a price index and that 2014 is the base year. -Refer to the above information to answer this question.What is the annual inflation rate in 2018?

Correct AnswerverifiedShow Answer

Suppose the labour force data for Country XYZ are: a)What are the participation rates for Country XYZ in 2016 and 2017? b)What are the unemployment rates for Country XYZ in 2016 and 2017?

Correct Answerverifieda)2016: 77.4%,2017: ...View AnswerShow Answer

How can the percentage change in real income from one year to the next be calculated?

Correct AnswerverifiedShow Answer

Etruria's nominal GDP rose from $420 billion in 2013 to $450 billion in 2016.During the same period,its inflation rate was 5 percent.By what percentage did its real GDP increase?

Correct AnswerverifiedShow Answer

If the rate of inflation is 7% per year,how long will it take for the price level to double?

Correct AnswerverifiedShow Answer

How can the rate of inflation be calculated?

Correct AnswerverifiedD

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Nominal GDP is the value of GDP using cu...
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The GDP Gap is the difference between wh...
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a)2016: 77.4%,2017: ...
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