Choose the Correct Answer 1. Suppose it is announced that industry analysts are
ID: 1222664 • Letter: C
Question
Choose the Correct Answer
1. Suppose it is announced that industry analysts are predicting that decreased oil supplies from Iraq will cause gasoline prices to rise, beginning next month. In the current week, the announcement would:
a. shift the supply of gasoline right
b. shift the demand for gasoline right
c. shift the demand for gasoline left
d. have no effect on the demand or supply of gasoline
2. The Phillips curve describes the relationship between:
a. the federal budget deficit and the trade deficit
b. savings and investment
c. the unemployment rate and the inflation rate
d. marginal tax rates and tax revenues
3. If the actual unemployment rate is below the natural rate of unemployment, it would be expected that:
a. the rate of inflation would increase
b. wages would fall
c. the Phillips curve would shift to the left
d. the natural rate of unemployment would fall
4. A type of unemployment in which workers are in-between jobs or are searching for new and better jobs is called _______ unemployment:
a. frictional
b. cyclical
c. structural
d. turnover
5. In general, countries with lower rates of growth of labor productivity have
a. Lower level of productivity
b. higher level of productivity
c. lower level of educational attainment
d. higher level of natural resources endowments
Explanation / Answer
1. Suppose it is announced that industry analysts are predicting that decreased oil supplies from Iraq will cause gasoline prices to rise, beginning next month. In the current week, the announcement would: shift the demand for gasoline right
Answer: B
Explanation: With decreased oil supply, price will go up, thus shifting the demand curve for gasoline towards right
2. The Phillips curve describes the relationship between: the unemployment rate and the inflation rat
Answer: C
Explanation: The Phillips curve represents inverse relation between the rate of inflation and the unemployment rate that result within an economy.
3. If the actual unemployment rate is below the natural rate of unemployment, it would be expected that: the rate of inflation would increase
Answer: A
Explanation: If unemployment falls below its natural rate there is upward pressure on wages, and the likely result is the risk of inflation.
4. A type of unemployment in which workers are in-between jobs or are searching for new and better jobs is called __frictional_ unemployment:
Answer: A
Explanation: Frictional unemployment is the unemployment that occurs because of people moving or changing occupations. It happens when there is a mismatch between the workers and occupation. This mismatch that can be due to salary, work hours, location, skills, and other factors