Question ECON125-HK2. ECONOMICS FOR MANAGERS (ECON125-HK2) > TAKE ASSESSMENT: EXAM 4

04 Jun Question ECON125-HK2. ECONOMICS FOR MANAGERS (ECON125-HK2) > TAKE ASSESSMENT: EXAM 4

Question
ECON125-HK2. ECONOMICS FOR MANAGERS (ECON125-HK2) > TAKE ASSESSMENT: EXAM 4

Question 1 2 points Save

U.S. workers have

neither substantial geographic nor occupational mobility

both substantial geographic and occupational mobility

substantial geographic mobility but not occupational mobility

substantial occupational mobility but not geographic mobility

Question 2 2 points Save

Many economists believe that increases in the minimum wage tend to create a labor surplus.

True

False

Question 3 2 points Save

The rate of unemployment that can be expected from normal frictional unemployment in an otherwise fully employed labor force is known as the

natural rate of unemployment

full-employment unemployment rate

structural unemployment rate

Humphrey-Hawkins unemployment rate

Question 4 2 points Save

If workers are changing jobs voluntarily and it takes a while for them to find new jobs, they are an example of

structural unemployment

frictional unemployment

technological unemployment

none of the above

Question 5 2 points Save

Underemployment includes employed workers not performing at full capacity.

True

False

Question 6 2 points Save

The Humphrey-Hawkins Act’s target rates for unemployment and inflation were reached by their target date of 1983.

True

False

Question 7 2 points Save

Which type of unemployment is the most difficult to cure?

functional

seasonal

cyclical

structural

Question 8 2 points Save

The idea of the natural rate of unemployment is that

frictional and structural causes prevent employment in the economy from ever becoming 100 percent of the labor force

each industry has its average turnover rate, and this rate determines its natural rate of unemployment

the market system requires that a pool of unemployed people be available to limit the power of workers

none of the above

Question 9 2 points Save

The total U.S. labor force excludes members of the armed services stationed outside the United States.

True

False

Question 10 2 points Save

The Full Employment and Balanced Growth Act set a 1983 U.S. inflation rate target of

1 percent

2 percent

3 percent

4 percent

Question 11 2 points Save

The total labor force includes all persons in the noninstitutional population who are either working or seeking work.

True

False

Question 12 2 points Save

The natural rate of unemployment is usually

equal to the full-employment rate of unemployment

higher than the full-employment rate of unemployment

lower than the full-employment rate of unemployment

double the full-employment rate of unemployment

Question 13 2 points Save

If the percentage of the population that is below the poverty line has decreased, then the number of

poor must have increased

poor must have decreased

poor may have increased

people above the poverty line must have increased

Question 14 2 points Save

If a Lorenz curve were constructed for the distribution of wealth, the curve would

indicate greater inequality for wealth than income

indicate less inequality for wealth than income

be identical to the Lorenz curve for income

be a straight line from the origin

Question 15 2 points Save

The total number of people in poverty has changed little since the late 1960s.

True

False

Question 16 2 points Save

The poverty rate for blacks is almost three times that for whites.

True

False

Question 17 2 points Save

If everyone had the same income, the Lorenz curve would become the line of income equality.

True

False

Question 18 2 points Save

The official poverty threshold line is adjusted annually for

income taxes

inflation

average household size

average family size

Question 19 2 points Save

In 2004, households with incomes less than $22,629 received

3.4 percent of aggregate income

5.7 percent of aggregate income

8.2 percent of aggregate income

10 percent of aggregate income

Question 20 2 points Save

Nonfamily households earn less than 50 percent of the income earned by family households.

True

False

Question 21 2 points Save

The Lorenz curve shows the

percent of families on the vertical axis and percent of income on the horizontal axis

percent of families on the horizontal axis and the cumulative percent of income on the vertical axis

cumulative percent of income on the vertical axis and the cumulative percent of families on the horizontal axis

cumulative percent of families on the vertical axis and the cumulative percent of income on the horizontal axis

Question 22 2 points Save

A minimum wage rate job raises a family out of poverty.

True

False

Question 23 2 points Save

In discussing the distribution of income among families, the term “lowest fifth” indicates

the poorest five percent of families

the poorest twenty percent of families

the smallest twenty percent of families

the percentage of families receiving one-fifth of the income

Question 24 2 points Save

If income were distributed solely according to productivity, some individuals would not receive any income.

True

False

Question 25 2 points Save

Cost-push inflation is characterized by

the wage-price spiral

administered pricing

stagflation

the multiplier

Question 26 2 points Save

Inflation and unemployment can never exist at the same time.

True

False

Question 27 2 points Save

To most effectively combat inflation by raising taxes, the government should

target funds that would otherwise be held idle

also increase government spending

target households with low marginal propensities to consume

target funds that would otherwise be spent on consumption or investment

Question 28 2 points Save

During an inflationary period, the Fed is inclined to purchase government securities to combat inflation.

True

False

Question 29 2 points Save

In the 1970s, the war in Vietnam caused a fiscal drag on the economy.

True

False

Question 30 2 points Save

Government policies designed to lower aggregate demand in order to combat inflation are known as

expansionary policies

contractionary policies

anti-growth policies

recession policies

Question 31 2 points Save

During the 1990–1991 recession, the U.S. government’s large budget deficits and budget reduction commitments limited its ability to use fiscal policy to stimulate the economy.

True

False

Question 32 2 points Save

When the U.S. Treasury sells bonds to the public to finance government spending and then the Fed buys the bonds through open-market purchases, the Fed is

monetizing the debt

decreasing the money supply

decreasing bank reserves

increasing the difficulty of raising funds for government spending

Question 33 2 points Save

Fiscal policy deals with

interest rates

the money supply

the government budget

bank credit

Question 34 2 points Save

In the late 1960s, a 10 percent surcharge on U.S. personal and corporate income taxes was imposed as an expansionary measure.

True

False

Question 35 2 points Save

If the government finances increased spending strictly through higher taxes, this action

increases the multiplier effect

has no impact on the multiplier effect

decreases the multiplier to a value greater than one

decreases the multiplier to one

Question 36 2 points Save

The Economic Recovery Tax Act of 1981 reduced personal income taxes by 25 percent over a three-year period.

True

False

Question 37 2 points Save

Jawboning by the Carter Administration proved to be an unsuccessful contractionary policy.

True

False

Question 38 2 points Save

The U.S. economy has experienced no minor cycles since World War II.

True

False

Question 39 2 points Save

Agricultural explanations of the business cycle are not as important today as they were 50 to 75 years ago, because today

agricultural production is more mechanized

agricultural production is a smaller portion of the total economy

agricultural production is greater

we eat less

Question 40 2 points Save

The underconsumption theory is classified as a real or physical cause of the business cycle.

True

False

Question 41 2 points Save

During the expansion phase of the business cycle, profit margins increase due to a widening cost-price relationship.

True

False

Question 42 2 points Save

Which of the following is the most valid expression of a theory of underconsumption as a cause of business cycles?

capital goods production encroaches on consumer goods production

income equals production, but not all income is used for current purchasing power

people want more goods than the economy is capable of producing; therefore, they must cut their consumption expectations

the economy provides insufficient purchasing power to buy back the goods it produces

Question 43 2 points Save

A recession occurs whenever there’s a decline in real GDP for two or more successive quarters.

True

False

Question 44 2 points Save

Involuntary inventory accumulation may occur during the contracting phase of the business cycle.

True

False

Question 45 2 points Save

A hurricane is considered an external force in business cycle analysis.

True

False

Question 46 2 points Save

During the contraction phase of the business cycle,

prices fall relative to costs, reducing profit margins

costs fall relative to prices, reducing profit margins

prices fall relative to costs, increasing profit margins

costs fall relative to prices, increasing profit margins

Question 47 2 points Save

An example of an external force in business fluctuations is

falling interest rates due to lagging demand in a contraction

a devaluation in the nation’s currency

variations in inventories

the lag between price changes and cost changes

Question 48 2 points Save

Economists use the phrase “business cycle” when discussing

movements in interest rates

changes in economic productivity

fluctuations in employment

fluctuations in total output around the trend

Question 49 2 points Save

The underinvestment theory is classified as a monetary cause of the business cycle.

True

False

Question 50 2 points Save

As the economy moves into the trough of the business cycle, there is a sizable reduction in the output of capital goods.

True

False