d.
Hyperinflation
e.
A prolonged deflation
94. Which of the following countries did not experience hyperinflation in the past 20 years?
a.
South Korea
b.
Nicaragua
c.
Ukraine
d.
Bolivia
e.
Argentina
Easy
MACR.BOYE.16.33 – ch. 07, 5
United States – Inflation
Inflation
Knowledge
95. The four phases of a business cycle, in order, are trough, depression, peak, and expansion.
a.
True
b.
False
False
Easy
MACR.BOYE.16.29 – ch. 07, 1
Business Cycles
Knowledge
96. When there is an upward rise in the volume of economic activity, the economy is said to be in a recession.
a.
True
b.
False
False
Easy
MACR.BOYE.16.29 – ch. 07, 1
d
Easy
MACR.BOYE.16.33 – ch. 07, 5
United States – Inflation
Inflation
Knowledge
97. In a business cycle, a peak marks the end of an expansion and the beginning of a recession.
a.
True
b.
False
98. The Great Depression was the most severe recession experienced by the U.S. economy, during which national output
had declined by 25 percent.
a.
True
b.
False
True
Easy
MACR.BOYE.16.29 – ch. 07, 1
Business Cycles
Knowledge
99. During a period of economic expansion, we would expect increasing levels of employment.
a.
True
b.
False
True
Easy
MACR.BOYE.16.29 – ch. 07, 1
Business Cycles
Knowledge
100. The NBER focuses primarily on the value of real GDP while deciding whether an economic contraction is a
recession, because it is measured monthly and allows the identification of the month in which business-cycle turning
points occur.
a.
True
b.
False
False
Moderate
United States – Inflation
True
Easy
MACR.BOYE.16.29 – ch. 07, 1
Business Cycles
Knowledge
101. Suppose statistical surveys indicate that new orders for manufactured goods and new building permits for single-
family homes are declining and that business inventories are rising. This implies economic activity is slowing down and
the economy is potentially entering a recessionary period.
a.
True
b.
False
False
Challenging
MACR.BOYE.16.29 – ch. 07, 1
United States – Unemployment
Business Cycles
Analysis
102. A coincident indicator will change before a recession begins.
a.
True
b.
False
103. Leading and lagging indicators show the effects of economic fluctuations but coincident indicators do not.
a.
True
b.
False
False
Moderate
MACR.BOYE.16.29 – ch. 07, 1
United States – Unemployment
Business Cycles
Knowledge
104. Individuals who are under the age of 16 can sometimes be out of work, but they are still not included among the
unemployed.
a.
True
b.
False
True
MACR.BOYE.16.30 – ch. 07, 2
United States – Unemployment
Business Cycles
Knowledge
105. Institutionalized adults are not considered to be a part of the labor force by the Bureau of Labor Statistics.
a.
True
b.
False
True
Moderate
MACR.BOYE.16.30 – ch. 07, 2
United States – Unemployment
Application
106. To be considered employed, a person must have a full-time job.
a.
True
b.
False
False
Moderate
MACR.BOYE.16.30 – ch. 07, 2
Knowledge
107. Frictional and structural unemployment are always present in a dynamic economy.
a.
True
b.
False
True
Easy
MACR.BOYE.16.30 – ch. 07, 2
Knowledge
108. Including discouraged workers in the labor market statistics would raise the unemployment rate.
a.
True
b.
False
True
Easy
Unemployment
Analysis
109. Underemployed workers include individuals who are employed in tasks that do not fully utilize their productive
potential.
a.
True
b.
False
True
Easy
MACR.BOYE.16.30 – ch. 07, 2
United States – Unemployment
Unemployment
Knowledge
110. The smaller the underground economy the more will be the overstatement of the official unemployment rate.
a.
True
b.
False
False
Moderate
MACR.BOYE.16.30 – ch. 07, 2
Unemployment
Knowledge
111. When the economy moves into recession, some companies lay off workers. Those unemployed workers are
experiencing cyclical unemployment.
a.
True
b.
False
True
Moderate
MACR.BOYE.16.30 – ch. 07, 2
United States – Unemployment
Unemployment
Application
112. Other things equal, as the number of discouraged workers rises in an economy, the gap between potential and actual
real GDP will widen.
a.
True
b.
False
True
Easy
Unemployment
Knowledge
113. The natural rate of unemployment is always more than the actual rate of unemployment because it excludes frictional
and seasonal unemployment rates.
a.
True
b.
False
False
Moderate
MACR.BOYE.16.31 – ch. 07, 3
United States – Unemployment
Unemployment
Knowledge
114. The GDP gap tends to increase when the economy shifts into recession.
a.
True
b.
False
False
Moderate
MACR.BOYE.16.31 – ch. 07, 3
Unemployment
Knowledge
115. Looking at the labor statistics of the United States from 1951 to 2002, we find that the unemployment rate for women
is higher than that for men in most years.
a.
True
b.
False
True
Easy
MACR.BOYE.16.31 – ch. 07, 3
United States – Unemployment
Unemployment
Knowledge
116. Teenagers are usually the demographic group with the highest unemployment rates.
a.
True
b.
False
True
Easy
MACR.BOYE.16.31 – ch. 07, 3
United States – Unemployment
Knowledge
Knowledge
117. In the 1990s, the unemployment rates in the U.S. were higher than that in the European nations.
a.
True
b.
False
118. Countries that have policies that encourage unemployment should be expected to have more unemployed workers.
a.
True
b.
False
True
Moderate
United States – Unemployment
Knowledge
119. When government provides generous unemployment benefits, unemployed workers have lesser incentives to look for
jobs.
a.
True
b.
False
True
Moderate
MACR.BOYE.16.31 – ch. 07, 3
Global Business Insight – High Unemployment in Europe
Comprehension
Revised
120. The more difficult it is for a firm to adjust its labor force in the face of economic fluctuation, the more likely the firm
is to hire new workers.
a.
True
b.
False
False
Moderate
MACR.BOYE.16.31 – ch. 07, 3
United States – Unemployment
Knowledge
False
Moderate
MACR.BOYE.16.31 – ch. 07, 3
Unemployment
Knowledge
121. Inflation is defined as the sustained increase in relative prices.
a.
True
b.
False
122. If the average price level in 1991 was 1.20 relative to the base year in 1986, then a dollar in 1991 bought 20 percent
more goods and services than a dollar in 1986.
a.
True
b.
False
False
Challenging
MACR.BOYE.16.33 – ch. 07, 5
United States – Reflective Thinking
Inflation
Application
123. If the inflation rate for a given year is 5 percent, then $1.00 in the previous year will buy goods worth approximately
$0.95 this year.
a.
True
b.
False
True
Moderate
MACR.BOYE.16.33 – ch. 07, 5
United States – Reflective Thinking
Inflation
Application
124. Variable-rate mortgages decrease the risks associated with unexpected inflation.
a.
True
b.
False
True
Moderate
MACR.BOYE.16.33 – ch. 07, 5
Inflation
False
Easy
MACR.BOYE.16.32 – ch. 07, 4
Inflation
Knowledge
125. If a student borrowed $5,000 at a fixed rate of 8.9 percent to pay for this year’s college expenses and the annual
inflation rate turns out to be 11 percent, then the student’s purchasing power for the year has increased.
a.
True
b.
False
126. Rapid increases in military spending by the federal government without accompanying increases in real output could
be a cause of cost-push inflation.
a.
True
b.
False
False
Challenging
MACR.BOYE.16.33 – ch. 07, 5
United States – Reflective Thinking
Inflation
Comprehension
127. Demand-pull inflation is more likely to occur when the economy is producing at maximum capacity.
a.
True
b.
False
True
Easy
MACR.BOYE.16.33 – ch. 07, 5
Inflation
Knowledge
128. Indonesia experienced hyperinflation in the 1990s.
a.
True
b.
False
False
Moderate
MACR.BOYE.16.33 – ch. 07, 5
United States – Inflation
Inflation
Knowledge
129. Hyperinflation is usually accompanied by a great macroeconomic expansion.
True
Challenging
MACR.BOYE.16.33 – ch. 07, 5
Inflation
Application
a.
True
b.
False
Moderate
United States – Reflective Thinking
Comprehension