Macroeconomics Quiz # 7

Travellers check is ____ instruments easily convertible into currency

Admitted

Transaction

Delivered

None of these

In which market the money demand and money supply determine the equilibrium interest rate?

Clothes market

Money market

Interest market

All of these

Quantity theory of money and prices states the hypothesis that changes in the money supply lead to ____proportional changes in the price level

Less

Greater

Zero

Equal

A measure of how frequently money is turned over is called

Velocity of money

Frequency of money

Acceleration of money

All of these

An individual’s belief that the best indicator of the future is recent information on inflation and unemployment is adaptive expectations

True

False

___ is use of payment contracts that automatically adjust for changes in inflation

Indexing

Changing

Expecting

None of these

A hypothesis that states that the economy will self-correct to the natural rate of employment is called

Natural rate hypothesis

Artificial rate hypothesis

Economy rate hypothesis

All of these

Real business cycle theory is the belief that economic fluctuations are the result of external negative and positive productivity shocks to the economy

True

False

Theory of rational expectations belief that workers and consumers incorporate the likely consequences of government policy changes into their expectations by quickly adjusting wages and prices

True

False

What is meant by real in the term real gross domestic product?

Relevant to economists

Calculated, not estimated

Literal, not figurative

Adjusted for inflation

Which of the following refers to the percentage of the population age 16 and older who are willing and able to work but are unable to obtain a job?

Labor force

Unemployment rate

Civilian labor force

Discouraged workers

Why is the unemployment rate an imperfect measure of unemployment?

It does not take into account discouraged workers.

It includes workers in the underground economy.

It does not take into account teenage workers.

It focuses too much on the condition of underemployment.

Which of the following groups typically has a high rate of unemployment?

High school graduates

Retirees

Teenagers

Skilled workers

Which type of unemployment results from the persistent mismatch of the skills of workers and the requirements of jobs?

Cyclical

Frictional

Seasonal

Structural

Which of the following types of unemployment is used to calculate the natural rate of unemployment?

Cyclical

Seasonal

Structural

Typical

The amount of real output the economy would produce if its labor and other resources were fully employed is known as ______.

Expected output

Full-time output

Overemployment

Potential output

In which of the following environments is the efficiency wage most likely to be effective?

Corporate

Government

Manufacturing

Nonprofit

Which of the following best describes the purpose of unemployment insurance?

To reduce economic hardship and the severity of recessions

To decrease the level of frictional unemployment in the economy

To bypass the moral hazard of seasonal unemployment

To combat the effects of falling inflation

How has automation affected highly skilled workers?

It has increased their demand for union jobs.

It has increased their overall wages.

It has decreased their importance in the economy.

It has decreased their need for technical training.

The price of a specific good compared to the price of other goods is known as ______.

Consumer price

Price index

Price level

Relative price

Which of the following is a price index based on?

A bundle of representative goods and services

A bundle of randomly selected goods and services

A single representative good or service

A single randomly selected good or service

What type of bias occurs when the consumer price index fails to reflect the savings that households enjoy when they change their spending in response to relative price changes?

New outlet

New product

Quality

Substitution

How many different phases does the business cycle have?

Three

Four

Five

Six

Which of the following refers to economic indicators that economists at the Department of Commerce have found typically change before changes in economic activity?

Coincident

Inverse

Lagging

Leading

The ______ is used to measure the value of goods and services for GDP.

Gallon

Meter

Dollar

Mile

For the economy as a whole, which of the following must equal spending?

Demand

Supply

Quality

Income

Since 1929, consumption has been ______ of total expenditures for goods and services for the GDP.

More than 50%

More than 75%

Less than 40%

Less than 20%

In economics, an investment refers to the creation of ______.

Factor payments

Commodities

Capital goods

Stock certificates

With the expenditure approach, what abbreviation represents exports?

E

X

EX

XP

Cheese is an example of a ______ good.

Fixed

Nonfixed

Durable

Nondurable