Download Economics 203/Test 5 (Remember to write your name on your

Economics 203/Test 5 (Remember to write your name on your scantrons -- -2% if not)
1. Which of the following is true about the unemployment rate?
a. a 1% increase in the growth rate of real GDP will lower unemployment by about 6%.
b. during periods of high economic growth, it tends to approach 1%.
c. it is closely correlated with long run movements in GDP but not short run
d. none of the above
2. Select the statement about the employment rate that is accurate:
a. it is measured by dividing the number of employed people by the work force
b. it mainly reflects and is influenced by long term factors
c. it has stayed about the same for males in the last forty years
d. none of the above
3. The growth of female employment rates is due, in part, to
a. suburbanization of large cities
b. later retirement ages for heads of households
c. technology influencing household production
d. all of the above
4. Which of the following is true regarding immigration into the US or its effects?
a. the percentage of foreign born residents of the US is now larger than at any time in US history
b. the current increase in immigration is very similar to what occurred after World War II
c. most European immigrants entered during the early 1990s
d. none of the above
5. The best detailed evidence on immigration’s economic effects indicates that
a. most immigrants enter the job market at the high end of the wage scale
b. native wages in low skill jobs actually rise
c. native employments in low skill jobs declines but only by small amounts
d. most immigrants take jobs in rural settings or small towns
6. Which of the following is a possible way of resolving the social security & medicare problems:
a. increases in the share of government spending going toward social security
b. increases in the share of national income going toward government spending
c. decreases in benefits for at least some recipients
d. all of the above
7. Where have past surpluses in social security gone?
a. into government accounts that have been building up to cover future shortfalls
b. to pay for other government programs with only “paper” accounts building up
c. into private investment accounts for past retirees
d. none of the above
8. Which of the following is the illustration of the relationship between job separations, new hires,
and unemployment that we used?
a. a tub of bathwater with water flowing in and out
b. an ocean with tides going up and down
c. the earth with a dark side and a sunny side
d. a computer with input and output
9. Which of the following is one of the reasons why the social security and medicare systems will
likely experience large revenue shortfalls at some point in the future unless something is changed?
a. large future increases in wage rates for most workers
b. a planned future decrease in the social security tax rate
c. a future decrease in the benefits paid to the pool of eligible people
d. large future increases in the populations of eligible recipients versus working people
10. Which describes the current security system in the US?
a. a defined benefit plan
b. a defined contribution plan
c. a fully funded plan
d. none of the above
11. What is the estimated size of the 75-year sum of social security and medicare shortfall of
revenues versus expenses in present value?
a. about $1 trillion
b. about $10 trillion
c. about $20 trillion
d. about $50 trillion
12. Why did social security wind up in its current position?
a. the large amount of immigration into the US
b. increases in post-WWII fertility and benefits
c. later retirements for workers
d. none of the above
13. Which of the following illustrates attempts at countercyclical monetary policy by the Fed?
a. recent attempts to deal with the cash crisis in short term lending markets
b. attempts in the 1970s to offset declining GDP and rising unemployment
c. attempts in the 1980s to reduce inflation and make the price level more stable
d. all of the above
14. Fiscal policy refers to the use of which of the following policy tools?
a. interest rates
b. price levels
c. tax rates
d. none of the above
15. In terms of economic evidence, which of the following has seemed to be a long lasting tool for
improving economic conditions?
a. basic property, contractual, and civil rights
b. creating more money to offset poor economic performance
c. returning more money to consumer through tax rebates
d. expanding specific regulations of economic markets
16. Put A for the answer
Correct Answers:
1b, 2a, 3c, 4d, 5d, 6d, 7a, 8a, 9c, 10c, 11d, 12d, 13c, 14b, 15c