Question 1

Who stands to gain as a result of unanticipated inflation?

Accepted Answer

A)  creditors
B)  debtors
C)  persons living on a fixed income
D)  retired individualsE) A) and B)
F) B) and D)

Question 2

All of the following are examples of a flow EXCEPT

Accepted Answer

A)  a new entrant into the labor force.
B)  an individual who voluntarily leaves the labor force.
C)  a person who is fired from a job.
D)  the current unemployment rate.E) B) and D)
F) A) and B)

Question 3

Which of the following is a TRUE statement?

Accepted Answer

A)  All recessions are due to external shocks.
B)  Ultimately, no recession has been due to an external shock.
C)  There have been recessions that cannot be explained by external shocks.
D)  All recessions and all expansions are due to external shocks.E) All of the above
F) None of the above

Question 4

A recent accounting graduate from a major business school is searching for a place to begin his career as an accountant. This individual is

Accepted Answer

A)  structurally unemployed.
B)  seasonally unemployed.
C)  cyclically unemployed.
D)  frictionally unemployed.E) A) and D)
F) All of the above

Question 5

New entrants to the labor force usually account for around ________ percent of the unemployed.

Accepted Answer

A)  ten
B)  twenty
C)  twenty-five
D)  thirtyE) A) and B)
F) None of the above

Question 6

A major element of the concepts of inflation and deflation is

Accepted Answer

A)  the idea that price changes are measured daily.
B)  their dependence on average rather than individual prices.
C)  the requirement that ALL prices must be moving in the same direction.
D)  each household's willingness to report what they pay for goods and services each month.E) None of the above
F) A) and B)

Question 7

The purpose of COLAs is to protect

Accepted Answer

A)  lenders.
B)  borrowers.
C)  workers.
D)  businesses.E) A) and B)
F) A) and C)

Question 8

If all prices in the economy go up from one year to the next, the CPI index, using the previous year as the base would

Accepted Answer

A)  be less than 100.
B)  be greater than 100.
C)  not be influenced since quantities have remained unchanged.
D)  not be determined since enough information is given.E) C) and D)
F) B) and D)

Question 9

The rate of unemployment is calculated as the number of

Accepted Answer

A)  unemployed workers divided by the number of employed workers.
B)  people in the civilian labor force divided by the number of unemployed.
C)  unemployed divided by the number of people in the civilian labor force.
D)  employed workers divided by the number of unemployed workers.E) A) and D)
F) All of the above

Question 10

Historically speaking, business fluctuations in an economy were more commonly referred to as

Accepted Answer

A)  inflationary pressures.
B)  economic growth.
C)  the GDP deflator.
D)  business cycles.E) B) and C)
F) All of the above

Question 11

Unanticipated inflation occurs when

Accepted Answer

A)  everyone knows perfectly the true rate of inflation.
B)  the actual inflation rate differs from the anticipated inflation rate.
C)  the inflation rate is zero.
D)  there is no change in the purchasing power of money.E) B) and C)
F) B) and D)

Question 12

Which one of the following would benefit financially from unanticipated inflation?

Accepted Answer

A)  a borrower whose loan has a fixed nominal interest rate
B)  a borrower with an adjustable rate mortgage
C)  a bank that has made loans at a fixed nominal interest rate
D)  a firm whose workers are covered by a COLA agreementE) All of the above
F) None of the above

Question 13

The consumer price index (CPI) is a measure of inflation for

Accepted Answer

A)  farmers.
B)  an elderly couple recently retired to Yuma, Arizona.
C)  Apple Computer.
D)  a typical consumer of the market basket used to calculate the index.E) A) and B)
F) A) and D)

Question 14

Historically, the United States has experienced

Accepted Answer

A)  continuous decreases in the unemployment rate since World War II.
B)  periods of both increases and decreases in the unemployment rate since World War II.
C)  continuous increases in the unemployment rate since World War II.
D)  no changes in the unemployment rate since World War II.E) All of the above
F) B) and D)

Question 15

Which of the following best fits the definition of unemployed?

Accepted Answer

A)  retired and not working
B)  working less than a full work week
C)  not working but looking for a job
D)  not working at a gainful pursuit, either in or out of the homeE) B) and D)
F) A) and D)

Question 16

Full employment in the United States today

Accepted Answer

A)  means a 100% employment rate.
B)  means 0% unemployment for 6 months.
C)  means about a 95% employment rate.
D)  means that the cyclical unemployment rate is about 5%.E) A) and B)
F) A) and C)

Question 17

-Refer to the above table. You are given information on Jasmin's consumption for 2005 and 2015. Using 2005 as the base year, compute the price index for 2015. The index equals

Accepted Answer

A)  1.5.
B)  70.588.
C)  141.667.
D)  107.143.E) C) and D)
F) B) and D)

Question 18

During a recession

Accepted Answer

A)  incomes rise and employment decreases.
B)  incomes fall and unemployment increases.
C)  incomes fall and unemployment falls.
D)  incomes rise and unemployment increases.E) A) and B)
F) All of the above

Question 19

The seasonally adjusted unemployment rate

Accepted Answer

A)  reports only seasonal unemployment.
B)  removes the seasonal variation from the unemployment rate.
C)  is impossible to compute since no one knows what the seasonal component equals.
D)  is another name for structural unemployment.E) All of the above
F) B) and C)

Question 20

An individual in the labor force whose employment was involuntarily terminated is

Accepted Answer

A)  a job leaver.
B)  a job loser.
C)  a job reentrant.
D)  part of the PPI.E) B) and D)
F) A) and B)

Exam 7: The Macroeconomy: Unemployment, Inflation, and Deflation

The consumer price index (CPI) is a measure of inflation for

Correct AnswerverifiedShow Answer

Which one of the following would benefit financially from unanticipated inflation?

Correct AnswerverifiedShow Answer

Historically, the United States has experienced

Correct AnswerverifiedShow Answer

The seasonally adjusted unemployment rate

Correct AnswerverifiedShow Answer

Which of the following best fits the definition of unemployed?

Correct AnswerverifiedShow Answer

Unanticipated inflation occurs when

Correct AnswerverifiedShow Answer

The rate of unemployment is calculated as the number of

Correct AnswerverifiedShow Answer

-Refer to the above table. You are given information on Jasmin's consumption for 2005 and 2015. Using 2005 as the base year, compute the price index for 2015. The index equals

Correct AnswerverifiedShow Answer

All of the following are examples of a flow EXCEPT

Correct AnswerverifiedShow Answer

A major element of the concepts of inflation and deflation is

Correct AnswerverifiedShow Answer

An individual in the labor force whose employment was involuntarily terminated is

Correct AnswerverifiedShow Answer

The purpose of COLAs is to protect

Correct AnswerverifiedShow Answer

Who stands to gain as a result of unanticipated inflation?

Correct AnswerverifiedShow Answer

Which of the following is a TRUE statement?

Correct AnswerverifiedShow Answer

During a recession

Correct AnswerverifiedShow Answer

A recent accounting graduate from a major business school is searching for a place to begin his career as an accountant. This individual is

Correct AnswerverifiedShow Answer

Historically speaking, business fluctuations in an economy were more commonly referred to as

Correct AnswerverifiedShow Answer

New entrants to the labor force usually account for around ________ percent of the unemployed.

Correct AnswerverifiedShow Answer

If all prices in the economy go up from one year to the next, the CPI index, using the previous year as the base would

Correct AnswerverifiedShow Answer

Full employment in the United States today

Correct AnswerverifiedShow Answer

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

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