Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Chapter 09 - Business Cycles, Unemployment, and Inflation
93. Which of the following would most likely occur during the expansionary phase of the
business cycle?
94. Real income is found by:
95. Which of the following formulas is correct? Percentage change in:
Chapter 09 - Business Cycles, Unemployment, and Inflation
96. Real income can be determined by:
97. Suppose that a person's nominal income rises from $10,000 to $12,000 and the consumer
price index rises from 100 to 105. The person's real income will:
98. Recently a labor union argued that the standard of living of its members was falling. A
critic of the union argued that this could not possibly be true because the union had been
acquiring increases in the nominal incomes of its members through collective bargaining. Is
the critic correct?
Chapter 09 - Business Cycles, Unemployment, and Inflation
99. Suppose that a person's nominal income rises by 5 percent and the price level rises from
125 to 130. The person's real income will:
100. In 2005, Tatum's nominal income rose by 4.6 percent and the price level rose by 1.6
percent. We can conclude that Tatum's real income:
101. In which of the following cases would real income rise?
Chapter 09 - Business Cycles, Unemployment, and Inflation
102. Under which of the following circumstances would we observe the greatest increase in
real income?
103. Cost-push inflation:
104. Cost-of-living adjustment clauses (COLAs):
Chapter 09 - Business Cycles, Unemployment, and Inflation
105. During a period of hyperinflation:
106. Inflation is undesirable because it:
107. Who is least likely to be hurt by unanticipated inflation?
Chapter 09 - Business Cycles, Unemployment, and Inflation
108. A lender need not be penalized by inflation if the:
109. Unanticipated inflation:
110. Inflation affects:
Chapter 09 - Business Cycles, Unemployment, and Inflation
111. If the nominal interest rate is 5 percent and the real interest rate is 2 percent, then the
inflation premium is:
112. If both the real interest rate and the nominal interest rate are 3 percent, then the:
113. Suppose the nominal annual interest rate on a two year loan is 8 percent and lenders
expect inflation to be 5 percent in each of the two years. The annual real rate of interest is:
Chapter 09 - Business Cycles, Unemployment, and Inflation
114. Suppose that lenders want to receive a real rate of interest of 5 percent, and that they
expect inflation to remain steady at 2 percent in the coming years. Based on this, lenders
should charge a nominal interest rate of:
115. (Consider This) The feudal practice of clipping coins illustrates the idea of:
116. (Consider This) The main point of the Consider This box on clipping coins is that:
Chapter 09 - Business Cycles, Unemployment, and Inflation
117. (Last Word) Declines in stock prices measured by the Dow Jones average:
118. (Last Word) Changes in stock market prices:
119. (Last Word) A burst stock market bubble might adversely affect the economy by:
Chapter 09 - Business Cycles, Unemployment, and Inflation
120. The production of durable goods is more stable than the production of nondurables over
the business cycle.
121. The business cycle is so named because upswings and downswings in business activity
are predictably equal in terms of duration and intensity.
122. People who work part time, but desire to work full time, are considered to be officially
unemployed.
123. The natural rate of unemployment in the United States is about 4 to 5 percent.
Chapter 09 - Business Cycles, Unemployment, and Inflation
124. An annual rate of inflation of 7 percent will double the price level in about 15 years.
125. During the past ten years the annual rate of inflation in the United States has averaged
less than 1 percent.
126. If the price level doubled in a 23-year period, we can conclude that the average annual
rate of inflation over that period was about 3 percent.
127. Unanticipated inflation benefits debtors at the expense of creditors.
Chapter 09 - Business Cycles, Unemployment, and Inflation
128. Unanticipated inflation benefits some groups in the economy.
129. If the nominal interest rate is 8 percent and the real interest rate is 5 percent, then the
inflation premium is 13 percent.
