Lesson 6 quiz

Inflation is defined as: A) an increase in the overall level of prices. B) the rate of growth in nominal GDP. C) a situation where all prices in the economy rise simultaneously. D) the growth phase of the business cycle.

A) an increase in the overall level of prices.

Inflation is undesirable because it: A) arbitrarily reduces real income B) always leads to hyperinflation C) definitely causes negative growth D) reduces everyone's standard of living.

A) arbitrarily reduces real income

A forestry worker who is out of work because of the temporarily low demand for wood products associated with a recession is defined as: A) cyclically unemployed B) underemployed C) frictionally unemployed DO naturally unemployed

A) cyclically unemployed

The labor force includes: A) employed workers and persons who are officially unemployed. B) employed workers, but excludes persons who are officially unemployed. C) full-time workers, but excludes part-time workers D) permanent employees, but excludes temporary employees

A) employed workers and persons who are officially unemployed.

A college student who is enrolled in school fulltime and not seeking employment is considered: A) our of the labor force B) unemployable, and not counted in the official statistics C) employed in leisure D) underemployed

A) our of the labor force

Reginald looked for work for six months but could not find a job to his liking. He now spends his time at the beach. For purposes of employment he is considered: A) out of the labor force B) unemployed C) employed in the underground economy D) underemployed

A) out of the labor force

The most commonly cited measure of inflation in the United States is: A) the Consumer Price Index (CPI) B) the Deflationary Price Index (DPI) C) the Cumulative Price Index (CPI) D) the Inflationary Price Index (IPI)

A) the Consumer Price Index (CPI)

True or False" Inflation means that all prices rise A) True B) False

B) False

The unemployment rate in a town in which 65,400 persons are employed and 11,000 are unemployed equals: A) 20.2 B) 16.8 C) 14.4 D) 11

C) 14.4

If the unemployment rate is 8 percent, then this means: A0 8 percent of the population is unemployed B) 8 percent of the population age over 16 is unemployed C) 8 percent of the labor force is unemployed D) the number of unemployed persons equals 8 percent of the employed persons.

C) 8 percent of the labor force is unemployed

Inflation initiated by increases in wages or other resource prices is labeled: A) demand-pull inflation B) demand-push inflation C) cost-push inflation D) cost-pull inflation

C) cost-push inflation

From time to time, there is unanticipated inflation. What problem can unanticipated inflation create? A) reduces the real burden of the public debt to the Federal Government B) hurts borrowers and helps lenders C) hurts people whose sole source of income is a fixed income D) helps savers

C) hurts people whose sole source of income is a fixed income

In the winter, the majority share hotel chain NM Hotel doesn't employ many people due to low tourism activity. A) these people are seasonally unemployed, and considered part of the natural rate of unemployment B) these people are cyclically unemployed, and not considered part of the natural rate of unemployment C) these people are seasonally unemployed, and are not considered part of the natural rate of unemployment. D) these people are frictionally unemployed, and considered part o the natural rate of unemployment.

C) these people are seasonally unemployed, and are not considered part of the natural rate of unemployment.

Another term used to describe negative inflation is: A) counter inflation B) GDP deflator C) hyperinflation D) deflation

D) deflation

In the early 1990's extremely high inflation rates of 2500% were common in Russia. During that time, we can say that as a result of those inflation rates, Russia was experiencing ___________________. A) perpetual inflation B) ultra inflation C) hypo inflation D) hyperinflation

D) hyerinflation