Question 1

Suppose that at the beginning of a loan contract,the real interest rate is 4% and expected inflation is currently 6%.If actual inflation turns out to be 7% over the loan contract period,then

Accepted Answer

A)  borrowers gain 1% of the loan value.
B)  lenders gain 1% of the loan value.
C)  borrowers lose 3% of the loan value.
D)  lenders gain 3% of the loan value.

Question 2

If the number of unemployed workers is 19 million,the number in the working-age population is 500 million,and the unemployment rate is 4%,what is the labor force participation rate?

Accepted Answer

A)  4.75%
B)  7.8%
C)  95%
D)  96.2%

Question 3

Which of the following is the smallest portion of the market basket of goods that makes up the CPI?

Accepted Answer

A)  housing
B)  food and beverages
C)  transportation
D)  apparel

Question 4

An advantage of the household survey over the establishment survey of the labor market is that the household survey

Accepted Answer

A)  is based on actual payrolls,rather than on unverified answers.
B)  includes the number of self-employed persons.
C)  includes the number of discouraged workers.
D)  omits persons employed at newly opened firms.

Question 5

The nominal interest rate minus the inflation rate equals the real interest rate.

Accepted Answer

A) True 
 B)False

Question 6

Housing is the largest component of the U.S.CPI market basket.

Accepted Answer

A) True 
 B)False

Question 7

The unemployment rate tends to be higher in the European Union as compared to the United States.

Accepted Answer

A) True 
 B)False

Question 8

Due to low interest rates,increased banking regulations,and technological change,JPMorgan Chase announced it would ________ the number of persons it employed in 2015 and this would ________ the total number of persons unemployed in the economy.

Accepted Answer

A)  decrease;increase
B)  decrease;decrease
C)  increase;decrease
D)  increase;increase

Question 9

Labor unions cause unemployment because the union contract wage is set

Accepted Answer

A)  below the market wage,causing a shortage of labor.
B)  below the market wage,causing a surplus of labor.
C)  above the market wage,causing a surplus of labor.
D)  above the market wage,causing a shortage of labor.

Question 10

Table 9-14
  The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010.
-Refer to Table 9-14.The percentage change in real average earnings from 1965 to 2010 equals

Accepted Answer

A)  2.0 percent.
B)  19.7 percent.
C)  24.6 percent.
D)  80.3 percent.

Question 11

The costs to firms of changing prices are called

Accepted Answer

A)  redistribution costs.
B)  menu costs.
C)  anticipation costs.
D)  money illusion costs.

Question 12

Which of the following would increase the unemployment rate?

Accepted Answer

A)  a law making it illegal to work more than 35 hours per week
B)  a cut in unemployment compensation
C)  an increase in unemployment insurance payments
D)  a decrease in the minimum wage

Question 13

Table 9-17
 
-Refer to Table 9-17.Looking at the table above,real average hourly earnings in 2015 were

Accepted Answer

A)  $3.67.
B)  $5.63.
C)  $10.24.
D)  $11.37.

Question 14

The GDP deflator is the best measure that reflects the prices of goods and services purchased by the typical household.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following describes a situation in which the person is hurt by inflation?

Accepted Answer

A)  a retiree whose pension is adjusted for inflation
B)  a person who borrows money during a period when inflation is under-predicted
C)  a person who lends money during a period when inflation is over-predicted
D)  a person paid a fixed income during an inflationary period

Question 16

The labor force participation rate equals the

Accepted Answer

A)  (number of employed divided by the labor force) × 100.
B)  (labor force divided by the number of people not in the labor force) × 100.
C)  (labor force divided by working-age population) × 100.
D)  (labor force divided by the total population) × 100.

Question 17

Figure 9-1 
-Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage is set at $5 per hour,which of the following will occur?

Accepted Answer

A)  The unemployment rate will rise.
B)  The unemployment rate will fall.
C)  The level of unemployment will rise,but the percentage of the labor force unemployed will not change.
D)  None of the above will occur.

Question 18

Except for recessions,the duration of unemployment for the typical person lasts

Accepted Answer

A)  less than six months.
B)  six to nine months.
C)  over nine months.
D)  over one year.
E)  over five years.

Question 19

Structural unemployment is the result of

Accepted Answer

A)  a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs.
B)  the search process of matching workers with jobs.
C)  the ups and downs in inflation.
D)  a slowdown in the economy.

Question 20

What effect does the payment of government unemployment insurance have on the unemployment rate?

Accepted Answer

The payment of government unemployment i...

Exam 9: Unemployment and Inflation

The costs to firms of changing prices are called

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The GDP deflator is the best measure that reflects the prices of goods and services purchased by the typical household.

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Which of the following is the smallest portion of the market basket of goods that makes up the CPI?

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Which of the following describes a situation in which the person is hurt by inflation?

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The unemployment rate tends to be higher in the European Union as compared to the United States.

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Except for recessions,the duration of unemployment for the typical person lasts

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Table 9-17 -Refer to Table 9-17.Looking at the table above,real average hourly earnings in 2015 were

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Housing is the largest component of the U.S.CPI market basket.

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What effect does the payment of government unemployment insurance have on the unemployment rate?

Correct AnswerverifiedThe payment of government unemployment i...View AnswerShow Answer

Due to low interest rates,increased banking regulations,and technological change,JPMorgan Chase announced it would ________ the number of persons it employed in 2015 and this would ________ the total number of persons unemployed in the economy.

Correct AnswerverifiedShow Answer

Structural unemployment is the result of

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Labor unions cause unemployment because the union contract wage is set

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Figure 9-1 -Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage is set at $5 per hour,which of the following will occur?

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Suppose that at the beginning of a loan contract,the real interest rate is 4% and expected inflation is currently 6%.If actual inflation turns out to be 7% over the loan contract period,then

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Which of the following would increase the unemployment rate?

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Table 9-14 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 9-14.The percentage change in real average earnings from 1965 to 2010 equals

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An advantage of the household survey over the establishment survey of the labor market is that the household survey

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The nominal interest rate minus the inflation rate equals the real interest rate.

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The labor force participation rate equals the

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If the number of unemployed workers is 19 million,the number in the working-age population is 500 million,and the unemployment rate is 4%,what is the labor force participation rate?

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The payment of government unemployment i...
View Answer

Due to low interest rates,increased banking regulations,and technological change,JPMorgan Chase announced it would the number of persons it employed in 2015 and this would the total number of persons unemployed in the economy.

Correct Answer
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Correct Answer
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