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Chapter 26 - Quiz Textbook Resources I Web Chapters and...

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Unformatted text preview: Quiz Textbook Resources I Web Chapters and Supplements - Updates and Errata Chapter Activities Glamor 28 Origin of the flea mersctlve Graphs Worked Problerrs See the Math Pow erPhint Presentations Key Questions Quiz thwarted Sides Foul Soln'an Videos IFod Content Web-based Questions Social Studies Home Product Info Site Map Contact Us ME fiEARGHY Leem‘nl Center Economics (McConnell). 18th Edition Chapter 26: Business Cycles, Unemployment, and Inflation Quiz Results Reporter Out of 10 questions. you answered 3 correctlywith afinal grade of30% 3 correct (30%) _ 7 inmrrect (70%) — 0 unanswered (0%) Your Results: The oonect answertoreach question is indicated bye J. 1 CORRECT The war in Iraq sent oil prices spiraling upwards. resulting in an increase in the oxerell price level. This is an example ofwhich type of inflation? A) Cost-pull V B] Cost-push C) Demand-pull Di Demand-push Feedback: The higher oil prices represented an increase in costs that were peued through the economy in the form of higher prices for goods and servicea.111e increased oil prices "pushed up" the price level. 2 Anne deepest point at the Great Depression. most u nemployrnentoonsisted of. INCORRECT A) suucturalunernployment V Bl cydicalunemployment cl fictional unemployment Di search unemployment Feedback: At its height, unemployment reached approximatelyzstt. Several factors led to a decline in demand for goods and services. creating cyclical unemployment. 3 CORRECT Orlando has justfinished school and is searching forhis firstjob. Orlando is considered to be: A) atmcmrallyunemployed V Bl frictionallyunernployed C] htlpflhighatedm(grew-hill.wm,lsitesfl30256942 l2/Studem_view0fchaple rlfilquizhtml 10.08/10 12:14 PM Page i. of 3 Quiz tons/10 12:14 PM Ci cydicallyu nem ployed Di employed Feedback: The trictionelty unemployed include those who are searching or wailing forjcbs in the near future. 4 Unanticipated inflation: INCORRECT V N arbit’arilyredistributes income from creditors to debtors Bi invariablyleads to unemployment 6] reduces the real incomes cfall individuals D] has the same economic consequences as anticipated inflation Feedback: "inflation is unanticipated. lenders will be repaid in dollars that have less purchasing power than what they bargained for while borrowers will repay these loans with "cheaper“ dollars. 5 In 2007. Maidne‘s nominal inmme increased by3% while the price level rose by 1 %, Consequently. INCORRECT Maxine's real income: N rosebyapproximately4% 31 fell byapproximatelyi'ila VI Ci rosebyapproidmately2% D] fell byapproximatelyZ'i’a Feedback: Mexine'e real income increased bythe difference between the increase in her nominal income and the increase in the price level. 5 Suppose the total population is 200 million workers, 100 million ofwhom are in the laborforce. 80 million INCORRECT people are employed full time and another 16 million are employed parltime: 5 million people are “discouraged workers,“ The unemployment rate is: N 21% Bl 20% Cl 1 1% V D] 4% Feedback: There are 96 million employed workers cut of 100 million in the labor tcrce. meaning 4 million are officially unemployed. for an unemployment rate of4't’u. 7 lfthe natural rate ofunemploym ent is 5.5% and the actual unemployment rate is 6,5%,then,according to INCORRECT Okun's law the GDP gap is: N 1% B] 2% C] 1% V Di 2% Feedback: Okun‘s law states that there is a negative GDP gap of 2%for every percentage point that the unemployment rate is above the natural rate. 3 The CPI is currentty126: a year ago itwas 120. The rate ofinttation overthe pastyear was: INCORRECT V A) 5% Bi 6% cl 7% Di 6% Feedback: The rate of inflation is the percentage increase in the wlue ofthe CPI. In this example, the rate of inflation is [126 120) {120 = .05. or 5% 9 Inflation always: INCORRECT N reduces both the purchasing power cfthe dollarand real income Bi reduces the purchasing power ofthe dollarand increases real income V 0] reduces the purchasing power ofthe dollar but may have no impacton real income D] increases the purchasing powerotthe dollarand reduces real income Feedback: A higher price level must reduce the purchasing power of the dollar. However. whether there is an impact on reel income depends on whether nominal income has kept pace. If nominal incomes rise at the same rate as the price level, real income will not change. Additionally. inflation affects different individuals' real incomes di'lfsrently. Inflation tends to hurt thoseon fixed incomes. for example. while benefiting debtors. 1" The "full em to ent rate ofunem to em" is: CORRECT p m p m N zero percent V’ 31 around 4% - 5% because offrictional and structural unemployment 0] around 4% - 5% because ofcyclical unemployment D] considerably higherin 2008 than it was in the mid-19803 Feedback: Also known as the "natural rate of unemployment.“ this is the rate currently estimated at 4%- 5% at which there is no cyclical unemployment. At full employment, there will still be frictionally and structurally unemployed workers those entering and exiting the labor force, switching jobs. or being retrained for other jobs. E-mail Your Results httpflhigtieredmcgraw-hill.com,lsilesjl30255942lZ/sbudenLviewOfchapl:rZG/quiz htrnl Page 2 of 3 Quiz 10.08/10 12:14 PM Date: Thu Oct28 201010:14:1T GMT+0200 (Jerusalem Standard Time) Mynama: E-mail those results In: E-mail address: Format Ma: HTML MyTeachen HTML Othan HTML E-rnail The Results The MCGTUW Hi” Cnmpurrres F'Iels read ourTbrrIIl flu“ and Prlvn: Noll" before you exp‘ore aurWeb s'le. To Iaparl a lechnica‘ problem wirh misWeb He. p‘ease canted Ihe W. htlpflhighatedmcgraw-hill.wm,lsitzsjl30256942 lZ/sbudenLfiewfl/d-aplz r26/quizhtml Pal]! 3 of 3 ...
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Chapter 26 - Quiz Textbook Resources I Web Chapters and...

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