If 130 million individuals are employed and 6 million are unemployed, what is the
unemployment rate?
a. 4.8 percent
b. 3.0 percent
c. 4.4 percent
d. 4.6 percent
e. 9.6 percent
Increases in the general price level are primarily a macroeconomic issue.
The real wage rate measures
a. nominal wages after taxes
b. what workers are paid in terms of this year’s dollars
c. what workers are paid in terms of purchasing power
d. what workers have available for spending after paying their bills
e. the number of dollars earned by workers
A spending shock
a. causes unemployment and inflation to change in the same direction
b. results in a movement along the AD curve
c. shifts the AS curve
d. first affects the economy through the money market
e. causes equilibrium GDP to change at each price level
Suppose the Bureau of Labor Statistics reports that the noninstitutional civilian
population is 250 million. Of those, 150 million are employed and 5 million are
unemployed. Of the 150 million employed, 5 million would like to be working twice as
many hours and of the 250 million, 5 million have given up the search for work. The
unemployment rate reported by the BLS would be __________, while if the BLS
counted the discouraged workers as unemployed the unemployment rate would be
__________.
a. 6.25%; 3.2%
b. 2%; 6.25%
c. 6.25%; 2%
d. 3.2%; 6.25%
e. 6%; 6.25%
Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours. Eileen can cook
dinner in 1.5 hours and mow the lawn in 2 hours. Bill’s opportunity cost of mowing the
lawn is
a. 1/2 of a dinner
b. 2 dinners
c. 3/4 of a dinner
d. 1-1/3 dinners
e. 2-2/3 dinners
What major historical event led to the most significant challenge to classical economic
thinking?
a. The war on poverty
b. The American Revolution
c. World War II
d. The Great Depression
e. The oil shocks of the 1970s
According to the classical model, an increase in government purchases will
a. lead to a change in the interest rate that encourages consumers to spend more
b. lead to a change in the interest rate that encourages private businesses to invest more
c. discourage private spending by increasing the price level
d. be partially offset by a decline in consumption and investment spending
e. leave total spending and output unchanged
If there is an excess supply of money in the money market, there must be an excess
supply of bonds in the bond market.
Less-developed countries often have low economic growth rates because of
a. low population growth rates and poor infrastructure
b. low current output per capita, high population growth rates and good infrastructure
c. low current output per capita, high population growth rates and poor infrastructure
d. low current output per capita, low population growth rates and poor infrastructure
e. low current output per capita and poor infrastructure.
If the aggregate expenditure line has shifted downward, which of the following is the
most likely cause?
a. There have been reports of good economic news.
b. The Fed has conducted an open market sale of bonds.
c. Income tax rates have been lowered.
d. The Fed has conducted an open market purchase of bonds.
e. Exports have increased.
Which of the following is the correct formula for computing GDP?
a. GDP = consumption + private investment + government spending + exports – imports
b. GDP = consumption + public investment + government spending + exports – imports
c. GDP = consumption + private investment + government spending – exports – imports
d. GDP = consumption + private investment + government spending + transfers
e. GDP = consumption + private investment + tax revenue + transfers
The simple leverage ratio is defined as:
a. Depreciation of an asset / Value of an asset
b. Current assets / current liabilities.
c. Equity of an asset / Value of an asset
d. Value of an asset / Equity of an asset.
e. Equity of an asset / Original cost of an asset.