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Chapter 09 - Business Cycles, Unemployment, and Inflation
58. The GDP gap measures the difference between:
59. A large negative GDP gap implies:
60. The aggregate cost of unemployment can be measured by the:
Chapter 09 - Business Cycles, Unemployment, and Inflation
61. If actual GDP is $500 billion and there is a negative GDP gap of $10 billion, potential
GDP is:
62. If actual GDP is $340 billion and there is a positive GDP gap of $20 billion, potential
GDP is:
63. If potential GDP is $330 billion and there is a positive GDP gap of $30 billion, real GDP
is:
Chapter 09 - Business Cycles, Unemployment, and Inflation
64. If potential GDP is $400 billion and there is a negative GDP gap of $15 billion, real GDP
is:
65. Assume the natural rate of unemployment in the U.S. economy is 5 percent and the actual
rate of unemployment is 9 percent. According to Okun's law, the negative GDP gap as a
percent of potential GDP is:
66. The relationship between the size of the negative GDP gap and the unemployment rate is:
Chapter 09 - Business Cycles, Unemployment, and Inflation
9-24
67. If actual GDP is less than potential GDP:
68. Full-employment output is also called:
Answer the question on the basis of the following information for a specific year in a
hypothetical economy for which Okun's law is applicable:
Chapter 09 - Business Cycles, Unemployment, and Inflation
69. Refer to the above data. The size of the negative GDP gap as a percent of potential GDP
for the above economy is:
70. Refer to the above data. The amount of output being forgone by the above economy is:
71. Refer to the above data. If the unemployment rate in the above economy fell to 6 percent,
Chapter 09 - Business Cycles, Unemployment, and Inflation
72. Okun's law:
73. For every 1 percentage point that the actual unemployment rate exceeds the natural rate, a
2 percentage point negative GDP gap occurs. This is a statement of:
74. Inflation means that:
Chapter 09 - Business Cycles, Unemployment, and Inflation
75. If the consumer price index falls from 120 to 116 in a particular year, the economy has
experienced:
76. The consumer price index was 177.1 in 2001 and 179.9 in 2002. Therefore, the rate of
inflation in 2002 was about:
77. The annual rate of inflation can be found by subtracting:
Chapter 09 - Business Cycles, Unemployment, and Inflation
78. If the Consumer Price Index rises from 300 to 333 in a particular year, the rate of inflation
in that year is:
79. As applied to the price level, the "rule of 70" indicates that the number of years required
for the price level to double can be found by:
80. Between 1980 and 2000 the price level approximately doubled. The average annual rate of
inflation over this 20-year period was about:
Chapter 09 - Business Cycles, Unemployment, and Inflation
81. Given the annual rate of inflation, the "rule of 70" allows one to:
82. If Fred's annual real income rises by 8 percent each year, his annual real income will
double in about:
83. If the rate of inflation is 12 percent per year, the price level will double in about:
Chapter 09 - Business Cycles, Unemployment, and Inflation
84. Compared to other industrial nations, inflation rates in the United States are:
85. Demand-pull inflation:
86. Demand-pull inflation:
Chapter 09 - Business Cycles, Unemployment, and Inflation
87. The phrase "too much money chasing too few goods" best describes:
88. Unlike demand-pull inflation, cost-push inflation:
89. Inflation initiated by increases in wages or other resource prices is labeled:
Chapter 09 - Business Cycles, Unemployment, and Inflation
90. Cost-push inflation:
91. Cost-push inflation may be caused by:
92. Rising per-unit production costs are most directly associated with:
