Question 1

Unemployment and recessions are sometimes necessary to curb high inflation.

Accepted Answer

A) True 
 B)False

Question 2

For the purpose of statistically reporting the unemployment rate, ʺdiscouraged workers,ʺ are

Accepted Answer

A)  counted.
B)  not counted.
C)  offered other jobs.
D)  trained to do different work.E) A) and C)
F) All of the above

Question 3

Critically evaluate the statement ʺHonolulu is an expensive place to live. Therefore the inflation rate must be high in Honolulu.ʺ

Accepted Answer

The statement confuses the price level w...

Question 4

On what kind of income is our tax system based?

Accepted Answer

A)  real
B)  nominal
C)  adjusted
D)  inflationaryE) C) and D)
F) A) and D)

Question 5

Economic expansions might lead to inflation because an expansion leads to

Accepted Answer

A)  a decrease in the unemployment rate, which increases wages.
B)  an increase in the unemployment rate, which increases wages.
C)  a decrease in the unemployment rate, which decreases wages.
D)  an increase in the unemployment rate, which decreases wages.E) None of the above
F) A) and D)

Question 6

What does the Consumer Price Index CPI) measure?

Accepted Answer

A)  prices of durable goods
B)  prices of non durable goods
C)  the cost of living over time
D)  the cost of replacing lost itemsE) None of the above
F) A) and B)

Question 7

Suppose that the chain-weighted index for GDP in Gambia was 275 in 2009 and 350 in 2010. The inflation rate between those two years was

Accepted Answer

A)  20.2 percent.
B)  27.3 percent.
C)  37.5 percent.
D)  75 percent.E) All of the above
F) B) and C)

Question 8

Cyclical unemployment increases during recessions.

Accepted Answer

A) True 
 B)False

Question 9

Why does unemployment not go to zero during booms?

Accepted Answer

While unemployment has a cyclical compon...

Question 10

Hector voluntarily left his job to search for a job in accounting, the field in which he has his bachelorʹs degree. Hector is considered

Accepted Answer

A)  structurally unemployed.
B)  cyclically unemployed.
C)  frictionally unemployed.
D)  not to be unemployed.E) B) and D)
F) A) and C)

Question 11

The biggest problem caused by a deflation is that

Accepted Answer

A)  prices fall.
B)  wages fall.
C)  people cannot repay their debts.
D)  interest rates rise.E) B) and C)
F) A) and D)

Question 12

Recall the Application about the time involved in including cell phones in the calculation of the CPI to
answer the following question(s) .
-According to the Application, as new products are constantly invented and introduced on the market,

Accepted Answer

A)  the bias in the CPI can be large.
B)  the bias in the CPI tends to become smaller.
C)  the bias in the CPI will eventually disappear.
D)  the bias in the CPI will remain virtually unchanged.E) B) and D)
F) A) and B)

Question 13

During periods of poor economic performance, real GDP

Accepted Answer

A)  declines and unemployment rises.
B)  declines and unemployment declines.
C)  declines but unemployment typically does not change.
D)  is unchanged but unemployment rises sharply.E) A) and B)
F) B) and C)

Question 14

The real-nominal principle can be stated as

Accepted Answer

A)  production generates income.
B)  only final goods and services should be counted in GDP.
C)  what matters to people is the purchasing power of money or income.
D)  only the manufacture of real goods is production.E) All of the above
F) A) and D)

Question 15

Why is the line between frictional and structural unemployment sometimes hard to draw?

Accepted Answer

Suppose a highly skilled steel worker is...

Exam 12: Unemployment and Inflation

For the purpose of statistically reporting the unemployment rate, ʺdiscouraged workers,ʺ are

Correct Answer
verified

Why does unemployment not go to zero during booms?

Correct Answer
verified
While unemployment has a cyclical compon...
View Answer

Unemployment and recessions are sometimes necessary to curb high inflation.

Correct Answer
verified

Cyclical unemployment increases during recessions.

Correct Answer
verified

Suppose that the chain-weighted index for GDP in Gambia was 275 in 2009 and 350 in 2010. The inflation rate between those two years was

Correct Answer
verified

What does the Consumer Price Index CPI) measure?

Correct Answer
verified

Why is the line between frictional and structural unemployment sometimes hard to draw?

Correct Answer
verified
Suppose a highly skilled steel worker is...
View Answer

The real-nominal principle can be stated as

Correct Answer
verified

Economic expansions might lead to inflation because an expansion leads to

Correct Answer
verified

The biggest problem caused by a deflation is that

Correct Answer
verified

During periods of poor economic performance, real GDP

Correct Answer
verified

Recall the Application about the time involved in including cell phones in the calculation of the CPI to answer the following question(s) . -According to the Application, as new products are constantly invented and introduced on the market,

Correct Answer
verified

Hector voluntarily left his job to search for a job in accounting, the field in which he has his bachelorʹs degree. Hector is considered

Correct Answer
verified

On what kind of income is our tax system based?

Correct Answer
verified

Critically evaluate the statement ʺHonolulu is an expensive place to live. Therefore the inflation rate must be high in Honolulu.ʺ

Correct Answer
verified
The statement confuses the price level w...
View Answer

Exam 12: Unemployment and Inflation

For the purpose of statistically reporting the unemployment rate, ʺdiscouraged workers,ʺ are

Correct AnswerverifiedShow Answer

Why does unemployment not go to zero during booms?

Correct AnswerverifiedWhile unemployment has a cyclical compon...View AnswerShow Answer

Unemployment and recessions are sometimes necessary to curb high inflation.

Correct AnswerverifiedShow Answer

Cyclical unemployment increases during recessions.

Correct AnswerverifiedShow Answer

Suppose that the chain-weighted index for GDP in Gambia was 275 in 2009 and 350 in 2010. The inflation rate between those two years was

Correct AnswerverifiedShow Answer

What does the Consumer Price Index CPI) measure?

Correct AnswerverifiedShow Answer

Why is the line between frictional and structural unemployment sometimes hard to draw?

Correct AnswerverifiedSuppose a highly skilled steel worker is...View AnswerShow Answer

The real-nominal principle can be stated as

Correct AnswerverifiedShow Answer

Economic expansions might lead to inflation because an expansion leads to

Correct AnswerverifiedShow Answer

The biggest problem caused by a deflation is that

Correct AnswerverifiedShow Answer

During periods of poor economic performance, real GDP

Correct AnswerverifiedShow Answer

Recall the Application about the time involved in including cell phones in the calculation of the CPI to answer the following question(s) . -According to the Application, as new products are constantly invented and introduced on the market,

Correct AnswerverifiedShow Answer

Hector voluntarily left his job to search for a job in accounting, the field in which he has his bachelorʹs degree. Hector is considered

Correct AnswerverifiedShow Answer

On what kind of income is our tax system based?

Correct AnswerverifiedShow Answer

Critically evaluate the statement ʺHonolulu is an expensive place to live. Therefore the inflation rate must be high in Honolulu.ʺ

Correct AnswerverifiedThe statement confuses the price level w...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified
While unemployment has a cyclical compon...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Suppose a highly skilled steel worker is...
View 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
The statement confuses the price level w...
View Answer