Ch. 10 Quiz

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The study of aggregate economic behavior is referred to as:
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B. Macroeconomics The study of macroeconomics is the study of aggregate economic behavior. Aggregate being formed by the collection of particulars into a whole.
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Ah the economy falls from the peak to the trough of the business cycle:
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B. Cyclical unemployment should increase and real GDP should decline -As the economy falls cyclical unemployment (joblessness that occurs when there are simply not enough jobs) falls. Less is produced reducing GDP.
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All persons over age 16 who are either working for pay or actively seeking paid employment refers to:
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B. The Labor force
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To be officially counted as unemployed, one must be:
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D. Actively seeking employment and currently not working
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Suppose that in a population of 100 million people,50 million are in the labor force and 47 million are employed. The unemployment rate is:
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A. 6.0 percent -50 million in the labor force minus 47 million employed leaves 3 million unemployed. 3 million unemployed divided by 50 million in the labor force, equals 6 percent.
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A plumber quits his job in Dallas and moves to San Francisco where additional plumbers are needed, but it takes a couple of months for him to find a job. He is said to be:
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A. Frictionally unemployed -Unemployment associated with a job search is frictional unemployment.
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A teenager without a high school diploma is unable to find work because all of the available jobs require a certain minimum reading level. Which of the following best characterizes the teenagers circumstances?
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B. Structurally unemployed -For many job seekers, the period between jobs may drag on for long periods of time because of the mismatch between their current skill set and the skill employers currently require.
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Inflation is defines as:
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C. An increase in relative prices (not a change in any specific price)
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Deflation occurs when the:
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B. Price decreases from some goods and services outweigh price increases on all other goods and services.
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Which of the following is an essential part of the market mechanism?
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Constant prices
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Real Income:
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C. Reflects the purchasing power of money Real income is the purchasing power of money measured by the quantity of goods and services your dollars will buy.
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Patricia’s nominal annual income in 2009 was $60,000. If the rate if inflation is constant at 10 percent, in order to keep Patricia’s real income constant, her nominal income in the year 2010 should be:
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C. $66,000 Income of $60,000 multiplied by 10 percent rate of inflation is $6,000. $60,000 + $6,000= $66,000.
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To constrict the Consumer Price Index, the Bureau of Labor Statistics must:
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D. Find out what people buy and then survey how the priced of these items change. To compute the CPI, the Bureau of Labor Statistics periodically surveys families to determine what goods and services consumers actually buy.

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