3

Question 1

it has been shown that increase in the money supply are directly related to the rate of inflation. if the previous statement is true, then

Answer 1

hyperinflation will normally be associated with large increases in the money supply

Question 2

deflation is occuring in a nation; the implications of this is/are that

Answer 2

holding nominal wages constant, the real wage would rise

Question 3

to calculate the labor force participation rate, you only need to know the

Answer 3

number of employed and unemployed and the relevant adult population

Question 4

Katherine was laid off from her job 11 months ago. After searching for a job for months, Katherine gives up her job search because she feels there are no jobs available for her. Economists would classify Katherine as

Answer 4

a discouraged worker

Question 5

inflation occurs when

Answer 5

the overall level of prices rise

Question 6

Pietro quits his job in New York and moves to California. After two months he finds a job. This is an example of — unemployment

Answer 6

frictional

Question 7

a member of the labor force is defined as someone who is

Answer 7

already employed or actively seeking work

Question 8

the unemployment rate is the percentage of the

Answer 8

labor force that is unemployed

Question 9

gross domestic product (GDP) is best defined as the total market value of all

Answer 9

final goods and services produced within a country within a given time

Question 10

if over a period of time real gross domestic product (GDP) increases, while nominal GDP decreases, then this implies

Answer 10

a significant drop in the price level

Question 11

the gross domestic product (GDP) deflator is a measure of

Answer 11

price level

Question 12

nominal gross domestic product (GDP) increases if

Answer 12

current prices of quantities increase

Question 13

which of the following statements is true about the natural rate of unemployment

Answer 13

sometimes the actual rate is below the natural rate

Question 14

Bob sells his car to Stan’s Used Car Lot for $5,000. Stan’s Used Car Lot sells the car to Bill for $5,500. This transaction contributes — to gross domestic product (GDP)

Answer 14

$500

Question 15

A company produces a computer, It pays $100 for the keyboard and outer 1/1 case, $200 for the internal hardware, and $100 for the software. It sells the computer to a consumer for $500 The contribution to gross domestic product (GDP) is

Answer 15

$500

Question 16

to determine living standards for the average person, we calculate

Answer 16

per capita GDP

Question 17

an economic downturn can lead to mainly which type of unemployment

Answer 17

cyclical

Question 18

the business cycle measures

Answer 18

short-run fluctuations in economic activity

Question 19

the phase of the business cycle where the economy is growing faster than usual is called

Answer 19

an economic expansion

Question 20

the phase of the business cycle where economic activity is decreasing is called

Answer 20

an economic contraction

Question 21

which of the following people would be officially considered unemployed

Answer 21

Jenna, who just graduated college and is searching for a job that fits her graphic design skills

Question 22

a computer company builds a new factory. this is included in the — category of GDP

Answer 22

investment

Question 23

the government purchases category of GDP includes spending by

Answer 23

federal, state, and local governments

Question 24

some individuals are unemployed because it takes time for them to find jobs that fit their skill sets. these individuals would be considered to be

Answer 24

frictionally unemployed