Quiz #8: Chapter 9

In the United States, the rate of unemployment is highest for: white teenagers. African-American teenagers. married women. unmarried women.

African-American teenagers.

An annual rate of inflation of 7 percent will double the price level in about 15 years. True False

False

If the nominal interest rate is 8 percent and the real interest rate is 5 percent, then the inflation premium is 13 percent. True False

False

If the price level doubled in a 23-year period, we can conclude that the average annual rate of inflation over that period was about 3 percent. True False

True

Unanticipated inflation benefits debtors at the expense of creditors. True False

True

Unanticipated inflation helps some groups in the economy. True False

True

Most economists agree that the immediate cause of most business cycle variation is: an unexpected change in the productivity of workers. an unexpected change in the level of total spending. the invention of new products. the growth and subsequent bursting of financial bubbles.

an unexpected change in the level of total spending.

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

be in the labor force.

Inflation initiated by increases in wages or other resource prices is labeled: demand-pull inflation. demand-push inflation. cost-push inflation. cost-pull inflation.

cost-push inflation.

The type of unemployment associated with recessions is called: frictional unemployment. structural unemployment. cyclical unemployment. seasonal unemployment.

cyclical unemployment.

The phase of the business cycle in which real GDP is at a minimum is called: the peak. a recession. the trough. the underside.

the trough.

Most economists agree that the immediate determinant of the volume of output and employment is the: composition of consumer spending. ratio of public goods to private goods production. level of total spending. size of the labor force.

level of total spending.

Cost-of-living adjustment clauses (COLAs): invalidate the "rule of 70." apply only to demand-pull inflation. increase the gap between nominal and real income. tie wage increases to changes in the price level.

tie wage increases to changes in the price level.

In the depth of the Great Depression, the unemployment rate in the United States was about: 15 percent. 33 percent. 25 percent. 40 percent.

25 percent.

Which of the following is correct? During the Great Recession, unemployment rates for men rose above those of women. Unemployment rates for African-American and white workers are approximately the same. Teenagers experience approximately the same unemployment rates as do adults. Laborers are less vulnerable to unemployment than are professional workers.

During the Great Recession, unemployment rates for men rose above those of women.