Econ Quiz

A

Inflation is a rise in: A. the general level of prices over time B. The standard living over time. C. Industrial production over time. D. Real GDP over time.

A

According to the Bureau of Labor Statistics, to be officially unemployed a person must: A. Be in the labor force B. Be 21 years of age or older C. Have lost a job. D. Be waiting to be called back from a layoff.

C

Assuming the total population is 200 million, the labor force is 100 million, and 92 million workers are employed, the unemployment rate is: A. 4 percent B. 6 percent C. 8 percent D. 10 percent

A

If a person's nominal income increases by 5% while the price level increases by 2% then that person's real income: A. increases by 3% B. Increases by 5% C. Decreases by 7% D. Decreases by 2%

B

If the consumer price index was 170 in one year and 180 in the next year, then the rate of inflation is approximately: A. 5.5 percent B. 5.9 percent C. 6.3 percent D. 7.2 percent

C

If the price level increases by 15 percent while nominal income increases by 8 percent, then in percentage terms real income would: A. Rise by about 8 percent B. Fall by about 8 percent C. Fall by about 7 percent D. Fall by about 15 percent

C

Kevin has lost his job in an automobile plant because of the use of robots for welding on the assembly line. Kevin plans to go to technical school to learn how to repair microcomputers. The type of unemployment Kevin is faced with is: A. Cyclical B. Frictional C. Structural D. Natural

B

Official unemployment statistics: A. Understate unemployment because individuals receiving unemployment are counted as unemployed. B. Understate unemployment because discouraged workers are not counted as unemployed. C. Include cyclical and structural unemployment, but not frictional unemployment. D. Overstate unemployment because workers who are involuntarily working part time are counted as being employed.

D

Potential GDP is the output that would be produced if the economy was experiencing: A. No unemployment B. Free markets and international trade C. No inflation D. Full employment

D

Refer to the above diagram. The phases of the business cycle from point A to D are, respectively: A. Peak, recession, expansion, trough B. Trough, recovery, expansion, peak C. Expansion, recession, trough, peak D. Peak, recession, trough, expansion

B

Refer to the information: Unemployed 7 Total population 145 Employed 95 Discouraged workers 3 The labor force in Scoob is: A. 95 million B. 105 million C. 105 million D. 145 million

C

The best example of a "frictionally unemployed" worker is one who: A. Reduces productivity by causing frictions in a business. B. Is laid off during a recessionary period in the economy. C. Is in the process of voluntarily switching jobs. D. Is discouraged and actively seeking work.

A

Unanticipated inflation tends to penalize: A. People who save money in financial institutions B. Individuals who borrow money from financial institutions. C. Businesses which borrow money from financial institutions. D. Governments which have a progressive personal income tax.

D

What is the main problem with mild inflation according to some economists? A. It reduces the size of the GDP gap B. It leads to unanticipated deflation C. It increases frictional and structural unemployment in the economy. D. it diverts productive time towards activities to hedge against inflation.

C

Which of the following is a correct statement? A. it is relatively easy to distinguish between cost-push and demand-pull inflation even if you don't know the source of the inflation. B. A supply shock will cause a variation of demand-pull inflation that can lead to hyperinflation C. Demand-pull inflation will continue so long as there is excess total spending in the economy. D. Demand-pull inflation is usually accompanied by higher unemployment rates.