A period of time in which the overall pace of business activity is rising is known as

Assessment chap 7

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Question 1(0.25 points)

A period of time in which the overall pace of business activity
is rising is known as

Question 1 options:

	inflation.
	deflation.
	an expansion.
	a contraction.

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Question 2(0.25 points)

To prevent frictional unemployment, we would have to

Question 2 options:

	eliminate recessions.
	eliminate the business cycle.
	prevent people from leaving their jobs before finding another job.
	make sure everyone went to college.

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Question 3(0.25 points)

Part of the reason that economists are concerned about
unemployment is that

Question 3 options:

	unemployment always leads to frictional unemployment.
	unemployment reduces the size of the labor force.
	unemployment shifts the production possibilities curve outward.
	the economy is producing less output than if there were full employment.

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Question 4(0.25 points)

The purchasing power of money increases when

Question 4 options:

	the inflation rate increases.
	there is inflation.
	there is deflation.
	there are more dollars in the economy.

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Question 5(0.25 points)

When the automobile replaced the horse as the primary means of
transportation, the unemployment rate of blacksmiths increased. This was an
example of

Question 5 options:

	cyclical unemployment.
	frictional unemployment.
	seasonal unemployment.
	structural unemployment.

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Question 6(0.25 points)

Which of the following statements is true about the seasonally
adjusted unemployment rate?

Question 6 options:

	The seasonally adjusted unemployment rate is the sum of the frictional unemployment rate, structural unemployment rate, and cyclical unemployment rate.
	The seasonally adjusted unemployment rate shows how the unemployment rate fluctuates with the various seasons.
	The seasonally adjusted unemployment rate is the same as the natural rate of unemployment.
	The seasonally adjusted unemployment rate is the rate computed for Fall, Spring, Summer and Winter.

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Question 7(0.25 points)

Unanticipated inflation occurs when

Question 7 options:

	everyone knows perfectly the true rate of inflation.
	the actual inflation rate differs from the anticipated inflation rate.
	the inflation rate is zero.
	there is no change in the purchasing power of money.

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Question 8(0.25 points)

To be considered officially unemployed, a person must be at least
16 years old

Question 8 options:

	and not working.
	and not in school and not working.
	and be a discouraged worker.
	not working and actively seeking employment.

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Question 9(0.25 points)

In a small country the population equals 5,000. 4,000 people are
in the labor force and 3,000 people are employed. The labor force participation
rate equals

Question 9 options:

	0.25.
	0.8.
	0.75.
	an undetermined amount given the lack of information.

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Question 10(0.25 points)

New entrants to the labor force usually account for around
________ percent of the unemployed.

Question 10 options:

	ten
	twenty
	twenty-five
	thirty

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Question 11(0.25 points)

Cutbacks in the production of autos in the U.S. due to increased
imports from Japan is an example of

Question 11 options:

	cyclical unemployment.
	frictional unemployment.
	seasonal unemployment.
	structural unemployment.

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Question 12(0.25 points)

In a small country the population equals 5,000. 4,000 people are
in the labor force and 3,000 people are employed. The unemployment rate equals

Question 12 options:

	0.25
	0.6
	0.75
	an undetermined amount given the lack of information.

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Question 13(0.25 points)

An increase in the labor force participation rate

Question 13 options:

	implies that the unemployment rate must fall.
	implies that the unemployment rate must rise.
	means there are more discouraged workers.
	is consistent with either a rise or a fall in the unemployment rate.

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Question 14(0.25 points)

Debtors gain and creditors lose when

Question 14 options:

	the anticipated rate of inflation is greater than the actual rate of inflation.
	the anticipated rate of inflation is less than the actual rate of inflation.
	the anticipated rate of inflation is the same as the unanticipated rate of inflation.
	the unanticipated rate of inflation is zero.

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Question 15(0.25 points)

The real price of a good is

Question 15 options:

	always expressed as a price index.
	depends upon a person’s income.
	the nominal price adjusted by the level of inflation.
	a value that depends upon the stock market.

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Question 16(0.25 points)

Suppose there are 100 million in the labor force, and 6 million
unemployed people. During the next month, 200,000 people lose their jobs and
300,000 find jobs. The new total of employed is ________ and the new
unemployment rate is ________.

Question 16 options:

	100.1 million; 5.8 percent.
	100 million; 6.1 percent.
	94.1 million; 5.9 percent.
	93.9 million; 6.1 percent.

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Question 17(0.25 points)

Deflation is the situation when

Question 17 options:

	the rate at which prices increase falls.
	the average of all prices is declining.
	the real rate of interest is negative.
	some prices are increasing and some are declining.

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Question 18(0.25 points)

Full employment

Question 18 options:

	includes only employed people.
	includes employed people plus the natural rate of unemployment.
	includes employed people and unemployed people.
	includes employed people plus cyclical unemployment.

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Question 19(0.25 points)

The definition of the adult population is those who are 16 years
and older and who are

Question 19 options:

	employed or unemployed.
	in the labor force.
	in the labor force or not in the labor force.
	not in the labor force.

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Question 20(0.25 points)

The real rate of interest equals 5% and the inflation premium
equals 2%. The nominal rate of interest equals

Question 20 options:

	2%.
	3%.
	5%.
	7%.

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A period of time in which the overall pace of business activity is rising is known as

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