Question

1. Which of the following accounts for a movement along a given AD curve? a. The...

1. Which of the following accounts for a movement along a given AD curve?

a. The substitution effect

b. The tax rate effect

c. The real-balance effect

d. The foreign aid effect

e. The government spending effect

2. If the nominal interest rate is 6.3 percent and the inflation rate is 7.2 percent, then the real interest rate equals:

a. - 13.5 percent

b. + 13.5 percent

c. - 0.9 percent

d. - 7.2 percent

e. + 1.1 percent

3. The wealth effect, the interest rate effect, and the international trade effect account for the:

a. positive slope of the short-run aggregate supply curve

b. the shape of the long run aggregate supply curve

c. positive slope of the aggregate demand curve

d. negative slope of the aggregate demand curve

e. negative slope of the short-run aggregate supply curve

Scenario 7.1

Of 1,350 people surveyed, 318 are not working.

The status of those not working is as follows:

122 full time students

29 discouraged workers

18 in long term care facilities

21 seeking employment and aged 16 or older

50 retirees

63 under age 16

15 working in the underground economy and not looking for a "real" job

Eight of those working were under 16 years of age.

4. Refer to scenario 7.1. According to the data provided, the number of workers officially unemployed is:

a. 122

b. 36

c. 40

d. 21

e. 55

5. Which of the following is true of nominal GDP?

a. It acts as an indicator of the general price level in the economy

b. It measures the real level of output in the economy

c. It measures national output based on the current year's prices

d. It tends to rise by a smaller amount than real GDP when the general price level increases

e. It measures changes in the output of intermediate goods and services

6. Because there is no way to account for them, the official unemployment rate does not include discouraged workers. What would happen to the unemployment rate if, because of a program that gave them new hope, all discouraged workers suddenly begin reporting themselves as ready to work?

a. The official unemployment rate would remain unchanged

b. The size of labor force would increase

c. The size of labor force would remain unchanged

d. The official unemployment rate would decrease

e. The size of the underground economy would shrink

7. Assume you borrow $1,000 on credit cards at an annual interest rate of 10 percent. If the inflation rate is 12 percent during the year and the debt has to be paid back in 12 months, then:

a. income will be redistributed from you to the bank

b. the real return for the bank will be greater than initially expected

c. you will repay the bank with fewer dollars than you borrowed

d. the dollars repaid will have less purchasing power than those borrowed

e. the bank will obtain the same return on the loan as initially expected

8. Some economists say that "full employment" exists in an economy where:

a. cyclical unemployment is 2 percent

b. cyclical unemployment is 4 to 6 percent

c. frictional unemployment is zero

d. the unemployment rate is 4 to 7 percent

e. the natural unemployment rate is zero

Homework Answers

Answer #1

Answer 1

c. The real-balance effect

Other options mentioned are not valid for movement along a given AD curve

Answer 2

c. - 0.9 percent

Real rate of interest = Nominal rate - Inflation rate = 6.3 - 7.2 = -0.9

Answer 3

d. negative slope of the aggregate demand curve

Its a fact that the above wealth effect, the interest rate effect, and the international trade effect reflects negative slope of the AD curve

Answer 4

d. 21

Because unemployment is counted from the age 16 and above

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
5. Which of the following is true of nominal GDP? a. It acts as an indicator...
5. Which of the following is true of nominal GDP? a. It acts as an indicator of the general price level in the economy b. It measures the real level of output in the economy c. It measures national output based on the current year's prices d. It tends to rise by a smaller amount than real GDP when the general price level increases e. It measures changes in the output of intermediate goods and services 6. Because there is...
1. Which of following will shift the Investment demand curve to the right?(choose one or more)...
1. Which of following will shift the Investment demand curve to the right?(choose one or more) A People believe the Economy will decline in the future B.Business Tax Decline C. The cost of buying production equipment Increases D. Decrease is unsued Production Capacity 2. In the long run the aggregate supply curve is vertical and the economy is at full- employment. A.True, in the long-run there is no cyclical unemployment which helps the economy maintain full employment. B. False, the...
2. Discouraged workers Which of the following statements correctly describe discouraged workers? (If none of the...
2. Discouraged workers Which of the following statements correctly describe discouraged workers? (If none of the choices apply, leave all of the checkboxes blank.) Check all that apply. They are full-time workers who would like to work only part-time. They have given up on looking for a job. They are employed workers who want to earn higher wages. They are counted as part of the labor force by the Bureau of Labor Statistics. The following table contains U.S. employment information...
1- The long-run aggregate supply curve assumes that the unemployment rate is more than 9 percent....
1- The long-run aggregate supply curve assumes that the unemployment rate is more than 9 percent. only laborers are fully employed. all factors of production are fully employed. there is no government purchasing of goods and services. 2-The natural rate of unemployment will help determine the level of economic growth in the economy. the position of the long-run aggregate supply curve. low levels of inflation. the open economy effect. 3-The vertical axis for an aggregate demand curve measures real income....
2. Discouraged workers Which of the following statements correctly describe discouraged workers? (If none of the...
2. Discouraged workers Which of the following statements correctly describe discouraged workers? (If none of the choices apply, leave all of the checkboxes blank.) Check all that apply. They are employed workers who want to earn higher wages. They have not looked for a job in 4 weeks (or longer), but they would like a job and are available for work. They have given up on looking for a job. They are dissatisfied with their current jobs and are considering...
1.    Recently, a flood of cheap computer chips has poured over the border from Arboc to Arbez.  Thousands...
1.    Recently, a flood of cheap computer chips has poured over the border from Arboc to Arbez.  Thousands of workers in the Arbezani computer chip industry have lost their jobs.  This unemployment is best described as A.   frictional. B.    structural C.    competitive. D.   cyclical. 2.    Barry Borrower arranges a loan with Leonard Lender.  Last year inflation was running at 3%.  Leonard charges Barry an interest rate of 9%, and would be adequately rewarded with a real interest rate of 4%.  Leonard must expect the inflation rate during the period of the...
11.   Demand-pull inflation occurs when the aggregate __________ curve shifts _______. A.   demand, right B.    demand, left C.    supply, right...
11.   Demand-pull inflation occurs when the aggregate __________ curve shifts _______. A.   demand, right B.    demand, left C.    supply, right D.   supply, left 12.   When the aggregate price level decreases, the resulting decrease in interest rates will most likely ___________ investment and _____________ consumption. A.   increase, increase B.    increase, decrease C.    decrease, increase D.   decrease, decrease 13.   The economy is operating at full capacity.  The long-run aggregate supply curve is __________.  In the long run, an increase in the aggregate price level will __________ output. A.   horizontal, increase B.    horizontal, not change C.    vertical, increase D.   vertical,...
1. Which of the following is true of unemployment? A) It is defined as the number...
1. Which of the following is true of unemployment? A) It is defined as the number of people actively looking for work who do not have jobs. B) The result is that the economy operates inside its production possibilities curve. C) There are psychological consequences associated with unemployment. D) All of the above. 2. Which of the following people would be considered unemployed? A) Homer, who lost his job at the power plant and is not looking for work B)...
1. Both your real wage and your nominal wage fell, which of the following must be...
1. Both your real wage and your nominal wage fell, which of the following must be true. a.         Inflation is positive but less than the rate of increase in your wage. b.         Deflation has occurred. c.         your boss took some of your wages illegally. d.         The overall price level has fallen more than your nominal wage. e.         None of the above. 2. The invention of new technology has increased ________ unemployment. a.         structural                     d.         frictional b.         cyclical                        e.        ...
1.   Which one of the following shifts the aggregate demand curve leftward? Select one: a. An...
1.   Which one of the following shifts the aggregate demand curve leftward? Select one: a. An increase in the wage rate. b. An increase in the price level. c. An increase in expected deflation. d. A decrease in taxes. e. A decrease in the interest rate. 2.   Consider an economy starting from a position of full employment. Which one of the following changes does not occur as a result of an increase in aggregate demand? Select one: a. Real GDP...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT