A hypothesis is a normative statement.
a. True
b. False
Indicate whether the statement is true or false
Question 2The inflation rate is a:
a. percentage decrease in price level.
b. percentage increase in price level.
c. sustained increase in relative prices.
d. sustained decrease in relative prices.
e. sudden increase in the weighted average of all prices.
Question 3Economic models are of limited use since they cannot be tested empirically.
a. True
b. False
Indicate whether the statement is true or false
Question 4In the 1990s, the Danish government passed laws tightening eligibility requirements for receiving unemployment benefits. What happened in Denmark as a result of this policy change?
a. The size of the labor force declined
b. The unemployment rate decreased
c. More teenagers entered the labor force
d. The wage rate increased
e. The natural rate of unemployment increased
Question 5A good economic theory, or model, weeds out the irrelevant facts from the relevant ones.
a. True
b. False
Indicate whether the statement is true or false
Question 6Why do the European countries like France, Germany, Italy and Spain have higher unemployment rates than other industrialized nations?
a. Low interest rate and low capital formation
b. Minimum wages are lower in these European countries compared to the other industrialized nations
c. Trade unions are not so prominent in these European countries
d. Stringent policies adopted by the governments of these nations against the termination of workers by firms
e. Nominal wages are more flexible in these nations compared to the other industrialized nations
Question 7A good economic theory is always more useful when it includes detailed facts, even if the facts are not relevant to the questions being investigated.
a. True
b. False
Indicate whether the statement is true or false
Question 8According to the labor statistics of the United States, the _____ reported the highest unemployment rate between 1960 and 2008.
a. Whites
b. Asians
c. African Americans
d. Hispanics
e. Latinos
Question 9Economists believe that most people's actions are rational and purposeful, not random and chaotic.
a. True
b. False
Indicate whether the statement is true or false
Question 10According to general trends in the incidence of unemployment across different demographic groups in the United States, which of the following groups have the lowest unemployment rates in the country?
a. Asians
b. Hispanics
c. Whites
d. Nonwhites
e. Latinos
Question 11When people make choices they typically know with certainty which choice is best.
a. True
b. False
Indicate whether the statement is true or false
Question 12Which of the following statements regarding the unemployment rates in the U.S. between 1971 and 2002 is true?
a. The unemployment among the whites were much lower compared to the non-whites.
b. The unemployment rate for all workers reached a low of 2.9 percent in 1982.
c. The unemployment rate of both male and female workers have consistently increased from 1971 to 1998.
d. The whites had much higher unemployment rates than the nonwhites.
e. Teenagers reported the lowest unemployment rates in the country.
Question 13To an economist, rational self-interest means that individuals try to weigh the expected marginal (additional) benefits and marginal (additional) costs of their decisions.
a. True
b. False
Indicate whether the statement is true or false
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