Question

11. A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. How many discouraged workers does the country have?

A 5 million B 20 million C 10 million D 15 million

12. A patient with a rare disease has the same chance of survival as one with a common disease, thanks to the spillover effect.

True or False

13. Deflation is a decrease in the:

A average level of prices B velocity of money C exchange rate D inflation rate

14. The supply of savings curve shows the relationship between savings and:

A investment B income C the interest rate D age

15. A country has 24 million people in the labor force, and 21.5 million of them are employed. What is the unemployment rate in this country?

A 89.6% B 10.4% C 2.5% D 21.5%

16. The Fisher effect is the tendency of nominal interest rates to rise with the expected inflation rates.

True or False

17. Technological advances are generally expected to have  ____ spillovers.

A both positive and negative B negative C positive D no

18. Figure loanable funds expansion: In the accompanying figure, if the demand for loanable funds increased from Dlf to D1lf and the supply of loanable funds remains at Slf, the equilibrium interest rate will:

A increase to i1 temporarily and then return to i0 B fall below i0 C increase to i1 D remain at i0

19. Episodes of hyperinflation are caused by:

A moderately high rates of real GDP growth B extremely high rates of money growth C severe recessions D extreme economic booms

20. According to the textbook, one major reason for the increase in the female labor force participation rate after Worlds War II was:

A an increase in the overall production because of the baby boom B a decrease in the male labor force participation rate

   C an increase in the incentive to work D an increase in income taxes

Answer 1

11.Option A 5 million A discouraged worker is a person of legal employment age who is not actively seeking employment or who has not found employment after long-term unemployment, but who would prefer to be working. This is usually because an individual has given up looking, hence the term "discouraged".

12.False . This is because Incentives to create drugs for common disease are higher.

13. Option A Average level of prices.Deflation is a persistent fall in the average level of prices in an economy.When the overall price level decreases so that inflation rate becomes negative, it is called deflation.

14. Option C Interest rate.Interest rates determine the amount of interest payments that savers will receive on their deposits. An increase in interest rates will make saving more attractive and should encourage saving. A cut in interest rates will reduce the rewards of saving and will tend to discourage saving.