ECON304 - MidTerm02_Practice - F10

ECON304 - MidTerm02_Practice - F10 - Sonoma State...

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.' Sonoma State University Department of Economics ECN 304 Florence Bouvet Fall 2010 Practice Midterm 2 Multiple Choice Questions: Choose the best answer. I. Which of the following would be counted as unemployed according to official statistics? a. Tim, who worked, but worked only 35 hours last week b. Mary, who is waiting for her new job to start c. Bev, who neither has ajob nor is looking for one ell. None of the above would be counted as unemployed. } 2. Ifvelocity is constant and, in addition, real GOP grows at a constant rate: ~ The price level is proportional to the money supply l' b. Real GOP is proportional to money supply \"'\\) -; '-J'j c. The price level is fixed d. Nominal GDP is fixed 3. The natural rate of unemployment is f!J'. The average rate of unemployment around which the economy fluctuates b. About 10 percent of the labor force c. A rate that never changes d. The transition of individuals between employment and unemployment. 4. During the past 50 years the natural rate of unemployment in the United States ___ during the 1970s and 1980s, compared to the t 950s and t 960s, and then ___ during the t 990s, compared to the previous two decades. a. increased; increased c}}. increased; decreased c. decreased; decreased d. decreased; increased 5. Inflation tax means that:
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a. As the price level rises, taxpayers are pushed into higher tax brackets. As the price level rises, the real value of money held by the public decreases. c. As taxes increase, the rate of inflation also increases. d. In a hyperinflation, the chief source of tax revenue is often printing money. 6. All of the following are causes of structural unemployment except: a. Minimum-wage laws b. The monopoly power of unions @ Unemployment insurance d. Efficiency wage 7. How can the Solow model explain the trend of growth in output per person observed in U.S. data over the last century or longer? a. increase in capital stock as the economy converges to steady state b. population growth 0'1 technological progress d. all of the above 8. Frictional unemployment differs from structural unemployment in that it: 1,1. has a shorter duration b. can be caused by 'efficiency wages' c. implies the supply of labor is larger than the number of jobs d. all of the above 9. Assume a country experiences a reduction in productivity that shifts the labor demand curve downward and to the left. If the real wage were rigid, this would lead to:
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ECON304 - MidTerm02_Practice - F10 - Sonoma State...

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