Unemployment and Inflation

They spend more than they earn, reducing their accumulated savings or going deeper into debt.

• middle class

• poor people

• rich people

• none of the above

If a change in income appears permanent such as being promoted to a secure and high paying job, __________________.

• then people are likely to consume less.

• then people are likely to save more.

• then people are likely to consume more.

• then people are likely to save less.

It assumes that people save in order to distribute their consumption over their lifetime.

• permanent income theory

• savings

• wealth

• life cycle hypothesis

When individuals are searching for greener pastures is considered what type of unemployment?

• frictional

• cyclical

• structural

• seasonal

Which of these is NOT a characteristic of an unemployed person?

• He/she does not work

• He/she has made specific efforts to find a job

• He/she is laid off from a job in the succeeding months

• He/she is undergoing a career change

This inflation results from an inefficient market or structure of the economy.

• Cost push inflation

• Demand pull inflation

• Divisional inflation

• Structural inflation

Caused by the increases in the expenses of production without the corresponding increase in output.

• Cost push inflation

• Demand pull inflation

• Divisional inflation

• Structural inflation

Costs when they make more trips to the bank in order to hold significant amounts of money.

• expected inflation

• shoe leather costs

• bracket creep

• menu cost

The amount of money generated by an investment before expenses.

• nominal rate

• investment rate

• interest rate

• real rate

This is the annual percentage return realized on an investment.

• nominal rate

• investment rate

• interest rate

• real rate