 |
| 1 | |
The business cycle is best described as: |
| | A) | a period of declining real GDP, accompanied by lower income and higher unemployment. |
| | B) | a period of accelerating GDP, accompanied by higher income and lower unemployment. |
| | C) | recurring periods of falling and rising productivity in the economy over periods of time. |
| | D) | the phases that all firms go through from the development of an idea or product to its final sale. |
|
|
|
| 2 | |
Carlos is an unemployed software designer. In his area, the software industry is in decline, but there are many jobs in the real-estate sector. Carlos' unemployment is best classified as: |
| | A) | cyclical unemployment. |
| | B) | demand-deficient unemployment. |
| | C) | structural unemployment. |
| | D) | frictional unemployment. |
|
|
|
| 3 | |
Inflation: |
| | A) | reduces both the purchasing power of the dollar and one's real income. |
| | B) | reduces the purchasing power of the dollar and increases one's real income. |
| | C) | reduces the purchasing power of the dollar but may have no impact on one's real income. |
| | D) | increases the purchasing power of the dollar and reduces one's real income. |
|
|
|
| 4 | |
The CPI is currently 126; a year ago it was 120. The rate of inflation over the past year was: |
| | A) | 5 percent. |
| | B) | 6 percent. |
| | C) | 7 percent. |
| | D) | 8 percent. |
|
|
|
| 5 | |
Inflation is a rise in the general price level in the United States. It is measured by: |
| | A) | the Producer Price Index. |
| | B) | the Consumer Price Index. |
| | C) | the percentage change in quantity demanded for a good or service divided by the price. |
| | D) | none of the above. |
|
|
|
| 6 | |
The war in Iraq sent oil prices spiraling upwards, resulting in an increase in the overall price level. This is an example of which type of inflation? |
| | A) | Cost-pull |
| | B) | Cost-push |
| | C) | Demand-pull |
| | D) | Demand-push |
|
|
|
| 7 | |
If the population is 300 million, the labor force is 150 million, and there are 141 million workers employed, the unemployment rate is: |
| | A) | 4 percent. |
| | B) | 6 percent. |
| | C) | 9 percent. |
| | D) | 12 percent. |
|
|
|
| 8 | |
Which of the following is correct? |
| | A) | The teenage unemployment rate is substantially higher than the adult rate. |
| | B) | The female unemployment rate is substantially higher than the male rate. |
| | C) | The unemployment rates for those with a college degree and those with only a high school education are roughly the same. |
| | D) | The unemployment rates for blue-collar workers and white-collar workers are roughly the same. |
|
|
|
| 9 | |
At the deepest point of the Great Depression, most unemployment consisted of: |
| | A) | structural unemployment. |
| | B) | cyclical unemployment. |
| | C) | frictional unemployment. |
| | D) | search unemployment. |
|
|
|
| 10 | |
In 2003, Maxine's nominal income increased by 3 percent while the price level rose by 1 percent. Consequently, Maxine's real income: |
| | A) | rose by approximately 4 percent. |
| | B) | fell by approximately 1 percent. |
| | C) | rose by approximately 2 percent. |
| | D) | fell by approximately 2 percent. |
|
|
.