Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
EC 305-Exam1-Ch7
Macro
| Question | Answer |
|---|---|
| Based on what we know about the average annual unemployment and inflation rates since 1981, which of the following is true? | unemployment was considered a bigger problem than inflation in almost every year |
| The sacrifice ratio is defined as | the percentage of output lost for each 1 percent reduction in the rate of inflation |
| Which of these people could officially be counted as unemployed? | a garage attendant who got fired from his old job two months ago but will start a new job in two weeks |
| If we look at the sacrifice ratios across countries, we find that | Germany has a higher ratio than Italy, Australia, or the U.S. |
| Okun's law states that one extra percentage point in unemployment causes | a 2 percent fall in GDP |
| An employed person is defined as a person who during a reference week | -had a job but was not working due to family or personal reasons -had a job but was not working due to maternity or paternity leave -did at least one hour of work as a paid employee D)all of the above |
| Which of the following people is in the unemployment pool? | -Chris, who quit her job to look for other employment -Jack, who has been temporarily laid off by his employer, but who expects to be called back after one or two months -Lesley, who lost her job because her firm had to shut down D)all of the above |
| Which of the following people has moved out of the pool of unemployment? | -Peter, who just got hired as a part-time security guard -Mary, who has given up looking for a job, leaving the work force permanently E)both Peter and Mary |
| Which of the following statements is FALSE? | most workers who became unemployed in 2000 or 2009 remained unemployed for half a year or more |
| The spell of unemployment is | defined as the period during which a person remains continuously unemployed |
| The duration of unemployment depends on | -how organized the labor market is in matching potential workers with jobs -age, sex, and racial mix of the labor force -ability/desire of those who are unemp to hold out for a better job -avail of jobs that match workers' skills E)all of the above |
| Some evidence suggests that prolonged periods of high unemployment actually increase the natural unemployment rate. This phenomenon is known as | unemployment hysteresis |
| Unemployment hysteresis refers to the fact that | high rates of unemployment tend to perpetuate themselves |
| If we look at U.S. unemployment by duration we can see that in 2009 | the mean duration of unemployment was more than 24 weeks |
| Which of the following does NOT affect the duration of unemployment? | the rate at which new workers enter the work force |
| Which of the following statements is TRUE for the United States? | the unemployment rate of teenagers tends to be much higher and more variable than that of people 20 years and older |
| Which of the following statements is FALSE? | the availability of unemployment benefits reduces the natural rate of unemployment |
| Unemployment benefits add to the measured unemployment rate since | -wkrs not looking for jobs may report as unemp to collect bnft -recvng benefits dcrs the opp costs of fndg job after an offer has been made -firms are likely to lay off, the consq of being unemp arent severe E)all |
| Which of the following can affect the frequency of unemployment? | -the variability of the demand for labor across different employers -the rate at which new workers enter the labor force |
| Over the last five decades, the natural rate of unemployment has | changed as the composition of the labor force has changed |
| Frictional unemployment is | the unemployment that exists even at the full-employment level of output |
| The natural rate of unemployment will most likely increase if | unemployment benefits are increased |
| Which country below had the lowest unemployment rate in 2008? | United States |
| In 2009, the high unemployment rate in the U.S. caused a loss in real GDP of roughly | $1,168 billion |
| Assume the share of whites in the labor force is 86% and their unemployment rate is 6%; the share of non-whites in the labor force is 14% with an unemployment rate of 11%. What is the overall unemployment rate? | 6.7% |
| Assume the overall unemployment rate is 7.5%, and whites constitute 82% of the labor force. If the unemployment rate among whites is 6.5%, what is the unemployment rate among non-whites? | 12.0% |
| Assume adult males have a 48% share of the work force and their unemp rate is 7.0%; adult females' share is 45% and their unemp rate is 6.8%; teenagers' share of the work force is 7% with an unemp rate of 18.0%. What is the overall unemp rate? | 7.7% |
| The replacement ratio is | after-tax income while unemployed divided by after-tax income while employed |
| The natural rate of unemployment can be reduced by | training and skills programs that focus on teenagers and the long-term unemployed |
| In a "jobless recovery," | there is a lag between GDP growth and a drop in unemployment |
| The ill effects of unemployment are often more severe than is evident from the official data since | the incidence of unemployment, both in frequency and duration, is spread unevenly throughout the economy |
| Over the last decade, unemployment rates in many European countries have been much higher than those in the United States. This is partially due to the fact that these European countries have | more generous unemployment benefits |
| Both unemployment and inflation are matters of concern, but | unemployment has real costs in terms of lost output, while inflation mostly redistributes income or wealth |
| Unemployment rates tend to be higher in European countries than in Japan. This is most likely due to the fact that | a large part of Japanese wages are paid in bonuses, making wages more flexible |
| If inflation were always perfectly anticipated, then | people would hold less cash but would still suffer losses since money balances are always positive |
| The menu cost of inflation arises since | resources have to be devoted to marking up prices and changing vending machines and cash registers |
| If inflation were always perfectly anticipated and contracts were written in real terms, then | currency holders would have a negative rate of return |
| The concern over inflation | stems from the fact that inflation is rarely predictable and those households who hold fixed dollar assets will experience a loss in wealth |
| If inflation this year is higher than expected, then | borrowers will gain at the expense of lenders |
| The unanticipated inflation of the last three decades benefited largely | homeowners with fixed mortgage rates |
| In an adverse supply shock, wage indexation is likely to | lead to a wage-price spiral |
| If wages and prices were fully indexed, | the economy would have difficulty adjusting to supply shocks since real wages could not adjust easily |
| The misery index is constructed by | adding the inflation rate and the unemployment rate |
| The misery index for the United States | is only loosely and inversely related to the successes of the incumbent party |
| Political business cycles consist of fluctuations caused by | economic policies designed to help win elections |
| Predictions based on the theory of political business cycles suggest that | presidents who want to be re-elected should aim for low inflation early in their terms and then try to achieve strong economic growth before the next election |
| Policy makers should be aware that they | can pursue growth policies in deep recessions without much risk of accelerating inflation |
| Wage indexation | increases nominal wages periodically in accordance with the increase in prices over a given time period |
| Which of the following statements is FALSE? | the costs of unanticipated inflation can be ignored, since the gains and losses of induced wealth transfers tend to cancel each other out over the economy as a whole |
| A zero inflation target | may not be as good as a positive inflation target, because it makes it more difficult to achieve full employment |
Created by:
jwtroupe
Popular Economics sets