The unemployment rate equals the number of persons:
a. unemployed divided by the number employed.
b. unemployed divided by the number in the labor force.
c. unemployed divided by the population age 16 and over.
d. not working divided by the population age 16 and over.
QUESTION 2Which of the following policies could the Fed use to lower the interest rate?
a. A tax cut.
b. Selling government securities.
c. Raising the discount rate.
d. Reducing the required reserve ratio.
QUESTION 3A leftward shift in the aggregate supply curve along a fixed aggregate demand curve will cause cost-push inflation.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4Why might the official measure of civilian unemployment in the U.S. be an understatement of actual unemployment?
a. Because some workers become discouraged and no longer are actively seeking work. Thus they are not officially counted in the labor force, and consequently are not officially unemployed.
b. Because the official measure of civilian unemployment fails to account for very high levels of unemployment among active-duty military personnel.
c. Because the statistics count part-time employment as being no different from full-time employment, even though many part-time workers would prefer to be fully employed.
d. Both a. and c. above are correct.
QUESTION 5Cost-push inflation is caused by a leftward shift of the aggregate demand curve.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6If the Fed wants to raise interest rates, then it can use its open market operations to:
a. increase the money supply.
b. decrease the money supply.
c. increase money demand.
d. decrease money demand.
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