Question

During the recessions of 2001 and 2008-09,

Select one:

a. only the broader measures of the unemployment rate increased.

b. only the narrower measures of the unemployment rate increased.

c. the labor force participation rate for women increased.

d. all measures of the unemployment rate (U-1 through U-6) increased.

e. the labor force participation rate for men increased.

---

Full employment is the level of unemployment that occurs

Select one:

a. None of the above answers is correct.

b. when cyclical unemployment is zero.

c. when frictional and structural unemployment are zero.

d. when everyone looking for a job has a job.

e. when frictional, structural, and cyclical unemployment are zero.

-----

If real GDP is less than potential GDP, then the money wage rate ________, and aggregate supply ________ so that the price level ________.

Select one:

a. falls; decreases; rises

b. does not change; increases; falls

c. rises; increases; falls

d. rises; decreases; rises

e. falls; increases; falls

-------

If the Fed wants to raise the interest rate, in the short run in the money market the Fed

Select one:

a. increases the quantity of money.

b. shifts the demand for money curve rightward.

c. shifts the demand for money curve leftward.

d. decreases the quantity of money.

e. directly raises the interest rate and does nothing to either the supply of money or the demand for money.

------

If the inflation rate is zero, the nominal interest rate is

Select one:

a. less than the real interest rate.

b. equal to the inflation rate.

c. positive and the real interest rate is negative.

d. equal to the real interest rate.

e. greater than the real interest rate.

-----

If the quantity of money supplied ________ the quantity demanded, in the long run the value of money ________.

Select one:

a. equals; equals zero

b. exceeds; falls as people spend their surplus money

c. is less than; does not change unless the Fed increases the money supply

d. is less than; falls as people spend their surplus money

e. exceeds; rises as people buy bonds

----

Answer 1

1 During the recessions of 2001 and 2008-09 , all measures of unemployment rate (U-1 through U-6 ) increased. Hence,option(D) is correct.

2. Full employment is the level of unemployment that occurs when cyclical unemployment is zero. Hence,option(B) is correct.

3. If real GDP is less than the potential GDP then the money wage rate falls and aggregate supply increases and so that the price level falls. Hence, option(E) is correct.

4. If the Fed wants to raise the interest rate , in the short run in the money market the Fed decreases the quantity of money. Hence,option(D) is correct.

5. If the inflation rate is zero, the nominal interest rate is equal to the real interest rate.Hence,option(D) is correct.