Macro Mid-Term
What is the real interest rate if the nominal interest rate is 9 percent and the expected inflation rate is 4 percent?
5%
Suppose the total population of an economy is 150 million, the labor force is 100 million, and the number of unemployed workers is 94 million. The unemployment rate is _____.
94%
A person whose skills do not match available job openings is considered frictionally unemployed.
False
Demand-pull inflation is worse than cost-push inflation because, in addition to higher prices, demand-pull inflation also reduces employment.
False
Discouraged workers are included in labor force figures, but not in unemployment figures.
False
Hyperinflation refers to a period of extremely erratic inflation rates.
False
Which of these signifies the role of money in an economy?
It serves as a medium of exchange in the economy.
Which of the following actions would increase the consumption spending component of GDP?
Tim buying Ann a dress
A sustained decrease in an economy's price level is known as deflation.
True
Construction workers at times face high rates of unemployment because their work is both seasonal and subject to wide swings over the business cycle.
True
During periods of high inflation, people want to hold as much money as possible.
True
Government fiscal policies that attempt to stimulate aggregate demand are often aimed at reducing cyclical unemployment.
True
If someone with a Ph.D. in philosophy finds work as a taxi driver, but continues to look for a college teaching position, he is counted as being employed.
True
If the price level increases by 2 percent each year, the inflation rate is increasing.
True
Inflation is defined as a sustained increase in an economy's price level.
True
Most of the unemployment during the Great Depression was cyclical unemployment.
True
The unemployment rate among African American workers in the United States is higher than that among white workers.
True
The view that union wage demands may be a source of inflation would be best associated with cost-push inflation.
True
Which of the following would be included in this year's gross domestic product (GDP)?
a bucket of Kentucky Fried Chicken that Kate bought this July
Which of the following is an example of a final good or service?
a cup of coffee bought at a restaurant
The objective of macroeconomics is to _____
analyze the role of government in the political system of a country.
People who are not currently employed but say they want a job are counted as unemployed only if they _____
are actively seeking employment
Unemployment benefits _____
are cash transfers to those who lose their jobs and actively seek employment.
How is GDP calculated?
by adding up the cost of all goods and services in the economy
Which type of unemployment is likely to decrease the most during an economy's boom?
cyclical unemployment
If the economy is experiencing a sustained decrease in the price level, it is called _____
deflation
A reduction in the rate of inflation is called _____
disinflation
A discouraged worker is one who _____
drops out of the labor force because he cannot find a job.
The labor force consists of all adults who are currently employed
false
The market value of all final goods and services produced in a nation during a particular period is called the _____
gross domestic product
Which of the following economic measures is most useful in comparing different economies across the world?
gross domestic product
The measure of the market value of all final goods and services produced in a state during a particular period, usually a year is called the _____
gross domestic product.
Relative prices describe _____
how much one good costs compared to another.
If the economy is experiencing extremely high increases in the price level, it is called _____
hyperinflation
If the economy is experiencing a sustained increase in the price level, it is called:
inflation
Frictional unemployment refers to unemployment that is a result of _____
job search
Macroeconomics is especially interested in _____
maximizing the efficiency of government.
If inflation is much higher than originally anticipated, _____ are better off and _____ are worse off.
people who borrowed at fixed interest rates; banks that extended loans at fixed interest rates
Which of the following is not an example of intermediate goods or services?
pizza bought at a restaurant
Which of the following would be studied by a macroeconomist?
price of gasoline
Which of the following would not be included in GDP?
production of the Ford plant in Mexico
An increase in unemployment insurance is likely to _____
reduce a person's incentive to look for work.
Cost-push inflation _____
results in a movement along the aggregate demand curve.
Recently, banking has become easier, with automated teller machines replacing bank tellers. The loss of tellers' jobs is an example of _____
structural unemployment
Unemployment arising from a mismatch of skills is called _____
structural unemployment
Which approach to GDP adds up spending on all final goods and services produced in the United States during the year?
the expenditure approach
Which of the following would be excluded from the gross domestic product (GDP)?
the government reducing welfare benefits
Which approach adds up earnings during the year by those who produce all that output?
the income approach
Which of the following would be included in the gross domestic product (GDP)?
the monthly telephone bill paid by Mr.Jones
Macroeconomics studies _____
the overall performance of the economy.
If the nominal interest rate is 5 percent and there is no inflation, _____
the real interest rate is 5 percent.
If the aggregate supply curve shifts leftward, then _____
the resulting increase in the price level is usually called cost-push inflation.
If the aggregate demand curve shifts rightward, then _____
the resulting increase in the price level is usually called demand-pull inflation.
The gross domestic product (GDP) excludes _____
the value of intermediate goods produced in an economy during a given period.
