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Exam 8: Unemployment and Inflation

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Question 121

Multiple Choice

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Generous unemployment benefits are likely to cause a(n) :

A) increase in the employment level.
B) reduction in job search time.
C) decrease in the unemployment rate.
D) increase in the unemployment rate.

E) All of the above
F) B) and D)

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Question 122

Multiple Choice

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The introduction of ATMs reduced the:

A) menu costs of inflation.
B) shoe-leather costs of inflation.
C) unit-of-account costs of inflation.
D) amount of seigniorage.

E) All of the above
F) A) and B)

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Question 123

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The inflation rate for the current year is the percentage change in the price level from the previous year.

A minimum wage of $7.25 per hour can cause structural unemployment if the equilibrium wage is:

Use the following to answer questions: -(Table: Labour Force Data) Use Table: Labour Force Data.Suppose the labour force participation rate is 70%.The number of unemployed adults is _____ million.

Use the following to answer questions: -(Figure: The Effect of a Minimum Wage) Use Figure: The Effect of a Minimum Wage.Suppose the labour market is in equilibrium at E when the government imposes a minimum wage of W_F.Structural unemployment,assuming all workers without a job are searching,will equal:

The natural rate of unemployment is:

If the Canadian dollar were replaced with a "new dollar" at an exchange rate of one new dollar for eight old dollars,then a mortgage of $200 000 would become a debt of 25 000 new dollars.

Disinflation is a drop in the price level.

The labour demand curve is negatively sloped because:

During Brazil's hyperinflation of the 1990s,the economy lost real resources when the _____ sector grew very large to cope with the consequences of the high rate of inflation.

Use the following to answer questions: -(Table: Unemployment and Employment Data) Use Table: Unemployment and Employment Data.The labour force in this economy is _____ million.

During periods of high inflation,stores that publish catalogs find it necessary to revise prices and publish new catalogs more frequently than before.This is an example of _____ costs.

Unless deflation occurs,the nominal interest rate will always be greater than or equal to the real interest rate.

A fixed interest rate of _____% with _____% inflation will yield the highest rate of return for a lender.

Discouraged workers is another term for the unemployed.

If the Canadian dollar were replaced with a "new dollar" at an exchange rate of one new dollar for five old dollars,then a loan of $10 000 would become a debt of _____ new dollars.

Unemployment that occurs because it takes time for workers and employers to find each other is _____ unemployment.

A survey reveals that,on a small island,initially 40 people have jobs,10 people are not working but are looking for jobs,and 30 people are neither working nor looking for work.Suppose that 10 of the 30 people who weren't working or looking for work now begin looking for work.There are now 20 people without jobs but looking for work and 40 people working.The unemployment rate:

A worker classified as frictionally unemployed is one who is: