multiple choice and essays, economics homework help

1.

In a business cycle, a
period in which the level of economic activity declines is known as:

A)

trough.

B)

peak.

C)

expansion.

D)

recession.

2.

Bombolinia has working-age
population of 200 million.  Out of
these people, 140 million are working, 10 million are currently not working
but are actively looking for jobs and are available to take a job if one is
offered.  There are also 5 million
individuals who are not working but have given up and are no longer actively
seek employment.  The participation
rate in Bombolinia is:

A)

50%

B)

100%

C)

75%

D)

25%

3.

Bombolinia has
working-age population of 200 million. 
Out of these people, 140 million are working, 10 million are currently
not working but are actively looking for jobs and are available to take a job
if one is offered.  There are also 5
million individuals who are not working but have given up and are no longer
actively seek employment.  The approximate
rate of unemployment in Bombolinia is:

A)

6.67%

B)

7.14%

C)

5%

D)

10%

4.

The short run ups and
downs in the level of economic activities is referred to as:

A)

Phillips curve.

B)

peak and trough.

C)

business trend.

D)

business cycle.

5.

A floating exchange
rate is:

A)

determined by the
market.

B)

set by government.

C)

set by the
International Monetary fund.

D)

determined by the UN.

6.

The official
unemployment rate reported by the government tends to understate the amount
of unemployment by:

A)

including discouraged
workers in the calculations.

B)

excluding discouraged
workers from the labor force.

C)

including part-time
workers in the calculations.

D)

excluding part-time
workers in the calculations.

7.

A county’s trade
balance is:

A)

international movements
of financial assets.

B)

the value of goods and
services it sells to other countries less the value of goods and services it
buys from other countries.

C)

the relative value of
the currency of one country to the currency of another country.

D)

the balance of
consumption and investment in the composition of GDP.

8.

In the country of
Sildavia, a market basket of goods and services cost $130 in 2005, and $160
in 2006. Based on this information and taking 2005 as the base year, the
price index in 2006 was:

A)

100.

B)

130

C)

81.25

D)

123.07

9.

Anna recently moved to
Boston in order for her husband, Jack, to begin a new job as an economics
professor. Anna is an experienced dermatologist who will certainly find a job
very soon.  She is currently
interviewing with several hospitals.  Anna
is currently:

A)

cyclically unemployed.

B)

structurally unemployed.

C)

seasonally unemployed.

D)

frictionally
unemployed.

10.

Sam, who is 55 years
old and has been a steel worker for 30 years. 
Last year he was laid off because his works is now performed by robots
and his skills are no longer needed by steel mills.  Sam is classified as:

A)

cyclically unemployed.

B)

permanently unemployed.

C)

frictionally unemployed.

D)

structurally unemployed.

11.

The natural rate of
unemployment refers to:

A)

the unemployment of
natural resources.

B)

summation of frictional
and structural unemployment.

C)

summation of cyclical
and structural unemployment.

D)

the unemployment of
resources.

12.

The Phillips curve
shows:

A)

a direct relationship
between the rate of unemployment and the rate of inflation.

B)

an inverse relationship
between the rate of unemployment and the rate of inflation.

C)

the consequences of fiscal
policy.

D)

the optimum level of
employment.

13.

According to the
Classical economists, the aggregate supply curve is:

A)

horizontal.

B)

vertical.

C)

upwardly sloped.

D)

downwardly sloped.

14.

An increase in
aggregate demand in the long run can lead to:

A)

cost push inflation.

B)

structural inflation.

C)

expectational inflation.

D)

demand pul inflation.

15.

The short-run aggregate
supply curve in the Keynesian range is:

A)

vertical.

B)

horizontal.

C)

upward sloping.

D)

downward sloping.

16.

Unexpected inflation:

A)

Adversely affects the
creditors.

B)

Adversely affects the
debtors.

C)

Positively affects the
creditors.

D)

(B) and (C) above.

17.

Because classical
economists stressed mostly the long run, they believe that:

A)

the economy will be self-correcting.

B)

fiscal policy is better
than monetary policy.

C)

the government should
fix the system.

D)

monetary policy is not
useful.

18.

The main consequence of
Keynesian economics is that:

A)

economic activism
should not be employed.

B)

economic activism
should be employed.

C)

fiscal policy is
ineffective.

D)

monetary policy is
ineffective.

19.

Rational expectations theory
suggests people and firms:

A)

form their expectations
by correcting their past mistakes.

B)

form their expectations
by taking chances.

C)

form their expectations
by ignoring the past.

D)

form their expectations
by taking all available information into account.

20.

Using government
spending and tax cuts to fight a recession is a policy set favored by which
of the following schools of thought?

A)

Classical

B)

Activists.

C)

Keynesians.

D)

(A) and (B) above.

21.

The belief that neither
monetary nor fiscal policy can reduce unemployment and therefore should not
be used is consistent with which of the following schools of thought?

A)

Keynesian.

B)

Classical.

C)

Adaptive expectations.

D)

modern economists.

22.

Japan’s comparative
advantage in automobiles can be attributed to:

A)

climate.

B)

factor endowments.

C)

technology.

D)

all of the above.

23.

An example of a import
quota is a:

A)

limit on the total
number of Honda automobiles imported from Japan.

B)

regulation specifying
that each imported Honda automobile must meet certain emission exhaust
guidelines.

C)

tax of $500 on each
Honda automobile produced in the United States.

D)

tax of 10 percent of
the value of each Honda automobile imported from Japan.

24.

If the European Euro appreciates
against the US dollar this will make:

A)

American imports from
Europe and American exports to Europe more expensive.

B)

American exports to
Europe and American Imports from Europe less expensive.

C)

American exports to
Europe more expensive and American Imports from Europe less expensive.

D)

American imports from
Europe more expensive and American export to Europe less expensive.