Econ Online Prob Ch 8

The increased costs of transactions that are caused by inflation are known as:

shoe-leather costs.

A binding minimum wage is likely to cause:

structural unemployment.

Unemployment that results when there are more people seeking jobs in a labor market than there are jobs available at the current wage rate is called:

structural unemployment.

Workers who would like to find a full-time job but who are currently working part time are called:

the underemployed.

To the extent that discouraged workers are present in the economy, the reported:

unemployment rate will understate the number of people who are unable to find jobs.

The increased costs that arise because inflation makes money a less reliable unit of measurement are known as:

unit-of-account costs.

If a country replaced its currency with a new currency at a ratio of 10 units of the old currency equal to 1 unit of the new currency, real:

wages and real income would not change.

Which of the following statements is NOT true?

The unemployment rate is a literal measure of the percentage of people who want a job but can't find one.

Which of the following statements is TRUE about the rate of unemployment?

There is a negative relationship between growth in the economy and the rate of unemployment.

Structural unemployment would not be caused by:

a minimum wage set below the equilibrium wage.

The natural rate of unemployment arises from the effects of:

frictional and structural unemployment.

Unemployment associated with the time workers spend in job search is called:

frictional unemployment.

Actual unemployment is equal to:

natural unemployment + cyclical unemployment.

Increases in the unemployment rate typically indicate:

periods of economic recession.

A country's labor force is:

the sum of employment and unemployment.

The natural rate of unemployment:

will rise if there is an increase in the number of young workers.

The unemployment rate can understate the true level of unemployment because it does not count:

discouraged workers, marginally attached workers, and the underemployed.

Which of the following statements is TRUE about borrowers?

Borrowers gain at the expense of lenders if the actual inflation rate is higher than expected.

If lenders expect higher inflation in years to come, they will most likely:

increase the nominal rate of interest.

A comparatively high unemployment rate indicates:

that it is relatively difficult to find a job.