5000

Most economists agree that the immediate determinant of the volume of output and employment is the:

• composition of consumer spending.

• ratio of public goods to private goods production.

• level of total spending.

• size of the labor force.

According to the past 15 U.S. recessions, what’s the average duration of a recession?

• About six months

• About 1 year

• About 2 years

• About 3 years

According to the past 15 U.S. recessions, what’s the average time gap between two recessions?

• About 2 years

• About 3 years

• About 4 years

• About 5 years

"Full employment" refers to the situation when there is:

• 100% employment of the labor force

• 0% unemployment rate

• No frictional or structural unemployment

• No cyclical unemployment

If the unemployment rate is 9 percent and the natural rate of unemployment is 5 percent, then the:

• frictional unemployment rate is 5 percent.

• cyclical unemployment rate and the frictional unemployment rate together are 5 percent.

• cyclical unemployment rate is 4 percent.

• natural rate of unemployment will eventually increase.

“The CPI is usually overstating the cost of living by _____%” and “the social security is indexed to _____.”

• 1 percent and UAW.

• 2 percent and inflation premium.

• 2 percent and COLA.

• 1 percent and CPI.

If the nominal interest rate is 9 percent and the inflation premium is 3, then the real interest rate is:

• 6 percent.

• 5 percent.

• 3 percent.

• 2 percent.

Inflation initiated by increases in wages or other resource prices is labeled:

• demand-pull inflation

• demand-push inflation

• cost-push inflation

• cost-pull inflation