UNEMPLOYMENT AND INFLATION

Topics: Inflation, Unemployment, Business cycle Pages: 44 (6668 words) Published: December 1, 2013
UNEMPLOYMENT AND INFLATIONUNEMPLOYMENT AND INFLATION
Student: ___________________________________________________________________________ 1. Inflation caused by a rise in per unit production costs is referred to as:  A. Cost-push inflation
B. Demand-pull inflation
C. Unanticipated inflation
D. Hyperinflation
 
2. The view that unions may be a source of inflation would be best associated with the:  A. Supply-shock view of inflation
B. Cost-push view of inflation
C. Wage-push view of inflation
D. Demand-pull view of inflation
 
3. Only two resources, capital and labor, are used in an economy to produce an output of 400 million units. If the total cost of capital resources is $200 million and the total cost of labor resources is $100 million, then the per unit production costs in this economy are:  A. $0.75 million

B. $1.33 million
C. $2.00 million
D. $3.50 million
 
4. In an economy, only two resources, capital and labor, are used to produce 50 units of output. If the total cost of capital resources is $125 and the total cost of labor resources is $25, then the per unit production costs are:  A. $150

B. $100
C. $9
D. $3
 
5. Which is a correct statement? 
A. It is relatively easy to distinguish between cost-push and demand-pull inflation even if you don't know the source of the inflation B. A supply shock will cause a variation of demand-pull inflation that can lead to hyperinflation C. Demand-pull inflation will continue so long as there is excess total spending in the economy D. Cost-push inflation will continue because increased per unit cost will lead to a reduced supply  

6. If you knew that per unit production costs were $8 and that the total cost of inputs was $1,000, then the number of units of output would be:  A. 75
B. 100
C. 125
D. 150
 
7. Only two resources, capital and labor, are used in an economy to produce an output of 600 million units. If the total cost of capital resources is $300 million and the total cost of labor resources is $100 million, then the per-unit production costs in this economy are:  A. $0.67 million

B. $1.50 million
C. $2.00 million
D. $3.00 million
 
8. Inflation that occurs when total spending is greater than the economy's ability to produce output at the existing price level is:  A. Anticipated inflation
B. Demand-pull inflation
C. Cost-push inflation
D. Unanticipated inflation
 
9. Inflation caused by an increase in aggregate spending is referred to as:  A. Cost-push inflation
B. Demand-push inflation
C. Demand-pull inflation
D. Hyperinflation
 
10. A statement that is often used to describe demand-pull inflation is:  A. "A rising tide lifts all boats"
B. "Money is easily earned, but not easily saved"
C. "Too much money chasing too few goods"
D. "There is no such thing as a free lunch"
 
11. In an economy, the price level has doubled in about 70 years. The approximate annual percentage rate of increase in the price level over this period has been:  A. 1 percent
B. 2 percent
C. 3 percent
D. 4 percent
 
12. If the annual inflation rate is 5 percent a year, about how many years will it take for the price level to double?  A. 10 years
B. 12 years
C. 14 years
D. 16 years
 
13. Which measure of inflation would include consumer goods and capital goods?  A. The GDP price index
B. The Consumer Price Index
C. The Retail Trade Survey
D. The Survey of Manufactures
 
14. Over a ten-year period, the Consumer Price Index doubled. On the basis of this information we can say that the average annual rate of inflation over this period was approximately:  A. 10 percent

B. 9 percent
C. 7 percent
D. 5 percent
 
15. If the price index rose from 254 in year 1 to 289 in year 2, then the rate of inflation for this economy in year 2 would be:  A. 11.3 percent
B. 13.7 percent
C. 89 percent
D. 35 percent
 
16. If the Consumer Price Index was 170 in one year and 180 in the next year, then the rate of inflation from one year to the next was...
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