HYPERINFLATION

Review Quiz

1. True or False: The rate of unemployment is understated by the increasing number of discouraged workers who drop out of the labor force during severe recessions.
   1. true,
   2. false,
   3. no valid answer.
2. Recurring periods of expansion and contraction of economic activity are known as
   1. economic waves,
   2. business cycles,
   3. product life cycles,
   4. trends.
3. OPEC oil crisis has been blamed for which form of inflation in the middle and late 1970's?
   1. cost push,
   2. structural,
   3. demand pull,
   4. hyperinflation.
4. Hyperinflation is associated with
   1. wage-price spiral,
   2. stock market crash,
   3. great depression,
   4. severe price drop.
5. Costs of living adjustment are given to employees for one of the following reasons:
   1. anticipated inflation,
   2. unemployment benefits,
   3. retirement benefits,
   4. unanticipated inflation.
6. True or False: Purchases of automobiles are said not to be postponable because not everybody who drives to work, has to be there on time.
   1. true,
   2. false,
   3. no valid answer.
7. If wages and interest rates are not adjusted for inflation, who gains from inflation?
   1. debtors,
   2. fixed income earners,
   3. lenders,
   4. savers.
8. During periods of recession, discouraged workers cause the unemployment rate to be
   1. understated,
   2. overstated,
   3. very accurate,
   4. comparable to that of other countries.
9. Which of the following form(s) of unemployment is (are) tolerable?
   1. cyclical and structural,
   2. frictional only,
   3. cyclical only,
   4. structural only,
   5. structural and frictional,
   6. frictional and cyclical.
10. True or False: Indexing of social security payments has increased hardship for most retirees.
    1. true,
    2. false,
    3. no valid answer.
11. Which of the following is used to measure inflation?
    1. rate of unemployment,
    2. index of production,
    3. index of prices,
    4. Dow Jones index.
12. Which of the following would cause an overstatement of the rate of unemployment?
    1. part-time workers,
    2. retired workers,
    3. underground economy,
    4. discouraged workers.
13. Which of the following type of goods is affected by business cycles first?
    1. nondurables,
    2. necessities,
    3. durables,
    4. services.
14. The $ amount of income is
    1. nominal,
    2. purchasing power,
    3. real,
    4. adjusted.
15. The form of unemployment which is looked upon as undesirable because it is due to a potentially avoidable slowdown of economic activity, is known as ........... unemployment.
16. What is the word used to designate a general pattern of price increase throughout the economy? .............
17. Unemployment which is acceptable because it is attributable to people changing jobs to find higher pay, is known as ................. unemployment.
18. What is the word used for a general pattern of price decrease throughout the entire economy? ...............
19. What is the exact word used in economics for the phase of the business cycle during which production decreases and unemployment increases?
20. Unemployment which must be tolerated because it is tied to declining sector of the economy, is known as .............. unemployment.