Marginally attached workers are people who are

not working and are not looking for work, but would work if asked.

working part-time while they go to school or get training for a better job.

only a few years from retirement.

looking for a better job than they currently have.

To be counted as "employed" in the U.S. labor force statistics, a person

does not have to be working for pay if they are working for a family business and does not have to be working full time.

must be working for pay and be working full time.

does not have to be working for pay if they are working for a family business but must be employed full time.

must be working for pay but does not have to be working full time.

Collective bargaining refers to

the process by which unions and firms agree on the terms of employment.

the process by which the government sets exemptions from the minimum wage law.

setting the same wage for all employees to prevent conflict among workers.

firms colluding to set the wages of employees below equilibrium.

The theory of efficiency wages explains why

it may be in the best interest of firms to offer wages that are above the equilibrium level.

setting wages at the equilibrium level may increase unemployment.

the most efficient way to pay workers is to pay them according to their skills.

it is efficient for firms to set wages at the equilibrium level.

If the reserve requirement is 10 percent, a bank desires to hold no excess reserves, and it receives a new deposit of $500, it

must increase required reserves by $50.

must increase required reserves by $100.

will initially see reserves decrease by $500.

will be able to use this deposit to make new loans amounting to $500.

In a system of 100-percent-reserve banking,

banks do not influence the supply of money.

loans are the only asset item for banks.

banks can increase the money supply.

Which of the following policies can the Fed follow to increase the money supply?

Reduce the interest rate on reserves

Increase reserve requirements for banks

Reduce the quantity of funds available through the Term Auction Facility

When conducting an open-market sale, the Fed

sells government bonds, and in so doing decreases the money supply.

buys government bonds, and in so doing increases the money supply.

buys government bonds, and in so doing decreases the money supply.

sells government bonds, and in so doing increases the money supply.

The existence of money leads to

greater specialization and to a higher standard of living.

greater specialization in production, but not to a higher standard of living.

a higher standard of living, but not to greater specialization.

neither greater specialization nor to a higher standard of living.

The inflation tax refers to

the revenue a government creates by printing money.

higher inflation which requires more frequent price changes.

the idea that, other things the same, an increase in the tax rate raises the inflation rate.

taxes being indexed for inflation.

When the price level falls, the number of dollars needed to buy a representative basket of goods

decreases, so the value of money rises.

increases, so the value of money rises.

increases, so the value of money falls.

decreases, so the value of money falls.

In 2010 the U.S. government was running a large deficit. Some were concerned that pressures might be put on the Federal Reserve to purchase government bonds to help the government finance this deficit. If the Fed were to buy government bonds to help the government finance its expenditures, then the price level would

rise, so the value of money would fall.

fall, so the value of money would fall.

fall, so the value of money would rise.

rise, so the value of money would rise.

On a given morning, Franco sold 40 pairs of shoes for a total of $800 at his shoe store.

The $800 is a nominal variable. The quantity of shoes is a real variable.

The $800 is a real variable. The quantity of shoes is a nominal variable.

Both the $800 and the quantity of shoes are nominal variables.

Both the $800 and the quantity of shoes are real variables.

James took out a fixed-interest-rate loan when the CPI was 200. He expected the CPI to increase to 206 but it actually increased to 204. The real interest rate he paid is

higher than he had expected, and the real value of the loan is higher than he had expected.

higher than he had expected, and the real value of the loan is lower than he had expected.

lower than he had expected, and the real value of the loan is higher than he had expected.

lower then he had expected, and the real value of the loan is lower than he had expected.

An associate professor of physics gets a $200 a month raise. With her new monthly salary she can buy more goods and services than she could buy last year.

Her real and nominal salary have risen.

Her real and nominal salary have fallen.

Her real salary has risen and her nominal salary has fallen.

Her real salary has fallen and her nominal salary has risen.

When inflation causes relative-price variability consumer decisions,

are distorted and the ability of markets to efficiently allocate factors of production is impaired.

are distorted, but markets are still able to efficiently allocate factors of production.

are not distorted, but the ability of markets to efficiently allocate factors of production is impaired.

are not distorted and markets are still able to efficiently allocate factors of production.

Last year, Jane spent all of her income to purchase 200 units of corn at $5 per unit. This year, she spent all of her income to purchase 180 units of corn at $6 per unit.

Jane's nominal income increased this year, but her real income decreased.

Jane's nominal income and real income decreased this year.

Jane's nominal income decreased this year, but her real income increased.

Jane's nominal income and real income increased this year.

Gabrielle, an Italian citizen, uses some previously obtained dollars to purchase a bond issued by a U.S. company. This transaction

does not change U.S. net capital outflow.

decreases U.S. net capital outflow.

increases U.S. net capital outflow by more than the value of the bond.

increases U.S. net capital outflow by the value of the bond.

According to purchasing-power parity, which of the following necessarily equals the ratio of the foreign price level divided by the domestic price level?

The nominal exchange rate, but not the real exchange rate.

The real exchange rate, but not the nominal exchange rate.

The real exchange rate and the nominal exchange rate.

Neither the real exchange rate nor the nominal exchange rate.

A country's trade balance

is greater than zero only if exports are greater than imports.

is greater than zero only if imports are greater than exports.

A depreciation of the U.S. real exchange rate induces U.S. consumers to buy

more domestic goods and fewer foreign goods.

fewer domestic goods and fewer foreign goods.

fewer domestic goods and more foreign goods.

more domestic goods and more foreign goods.

You hold currency from a foreign country. If that country has a higher rate of inflation than the United States, then over time the foreign currency will buy

fewer goods in that country and buy fewer dollars.

more goods in that country and buy more dollars.

more goods in that country but buy fewer dollars.

fewer goods in that country but buy more dollars.

The dollar is said to appreciate against the euro if the exchange rate

rises. Other things the same, it will cost more euros to buy U.S. goods.

falls. Other things the same, it will cost fewer euros to buy U.S. goods.

falls. Other things the same, it will cost more euros to buy U.S. goods.

rises. Other things the same, it will cost fewer euros to buy U.S. goods.

Suppose that foreign citizens decide to purchase more U.S. pharmaceuticals and U.S. citizens decide to buy stock in foreign corporations. Other things the same, these actions

raise both U.S. net exports and U.S. net capital outflows.

raise U.S. net exports and lower U.S. net capital outflows.

lower both U.S. net exports and U.S. net capital outflows.

lower U.S. net exports and raise U.S. net capital outflows.

The nominal exchange rate is the

rate at which a person can trade the currency of one country for another.

nominal interest rate in one country divided by the nominal interest rate in the other country.

ratio of a foreign country's interest rate to the domestic interest rate.

real exchange rate minus the inflation rate.

Which of the following is an example of U.S. foreign direct investment?

A U.S. company opens an auto parts factory in Canada

A Chinese company opens a restaurant in the U.S.

An Australian bank buys stocks issued by a U.S. corporation.

A U.S. bank buys bonds issued by an Australian corporation.

Suppose that the United States imposes an import quota on lumber. The quota makes the real exchange rate of the U.S. dollar

appreciate but does not change the real interest rate in the United States.

appreciate and the real interest rate in the United States increase.

depreciate and the real interest rate in the United States decrease.

depreciate but does not change the real interest rate in the United States.

Which of the following accurately describes of the effect of the government budget deficit on the open economy?

Real interest rates rise, which causes crowding out of domestic investment; the currency appreciates pushing the trade balance toward deficit.

Real interest rates fall, which encourages domestic investment; the currency appreciates pushing the trade balance toward deficit.

Real interest rates fall, which encourages domestic investment; the currency depreciates pushing the trade balance toward surplus.

Real interest rates rise, which causes crowding out of domestic investment; the currency depreciates pushing the trade balance toward surplus.

If the demand for loanable funds shifts right, then the real interest rate

and the equilibrium quantity of loanable funds both rise.

and the equilibrium quantity of loanable funds both fall.

falls and the equilibrium quantity of loanable funds rises.

rises and the equilibrium quantify of loanable funds falls.

If people thought that many banks in a certain country were at or near the point of bankruptcy, then that country's real exchange rate

would fall and its net exports would rise.

would rise and its net exports would fall.

and its net exports would fall.

In the open-economy macroeconomic model, the supply of loanable funds comes from

the sum of domestic investment and net capital outflow.

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The natural rate of unemployment includes

neither frictional nor structural unemployment.

both frictional and structural unemployment.

structural but not frictional unemployment.

frictional but not structural unemployment.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Suppose that some country had an adult population of about 50 million, a labor-force participation rate of 60 percent, and an unemployment rate of 5 percent. How many people were employed?

1.5 million

30 million

28.5 million

47.5 million

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The BLS reports the U-6 measure of labor underutilization. Which of the following is how it computes U-6?

(Total unemployed + Marginally attached workers)/Adult population

(Total unemployed + Marginally attached workers + Part-time employed for economic reasons)/Adult population

(Total unemployed + Marginally attached workers)/(Labor force + Marginally attached workers)

(Total unemployed + Marginally attached workers + Part-time employed for economic reasons)/(Labor force + Marginally attached workers)

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Suppose that the adult population in the country of Atlantis is 115 million. If 80 million people are employed and 5 million are unemployed, then

30 million are not in the labor force.

35 million are in the labor force.

75 million are in the labor force.

35 million are not in the labor force.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The amount of unemployment varies

little over time but substantially across countries.

substantially over time and across countries.

substantially over time but little across countries.

little over time and across countries.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Josh is a full-time college student who is not working or looking for a job. The Bureau of Labor Statistics counts Josh as

employed.

unemployed.

marginally attached worker.

not in the labor force.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In the 1990s Ireland made unemployment benefits less generous. This change would likely have reduced

both structural unemployment and the natural rate of unemployment.

both frictional unemployment and the natural rate of unemployment.

frictional unemployment but not the natural rate of unemployment.

structural unemployment but not the natural rate of unemployment.

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