1.Over the past 50 years, the U.S. labor force participation rate has decreased for

i. men.

ii. women.

iii. the over-all labor force.

Select one:

a.ii and iii

b.i and iii

c.ii only

d.i, ii, and iii

e.i only

2.Shoe-leather costs of inflation arise from the

Select one:

a.confusion that results from higher inflation.

b.increase of velocity as inflation rises.

c.increasing costs of apparel (clothes and shoes) as inflation rises.

d.increasing costs of agricultural products as inflation rises.

e.decline in the use of money as a unit of account.

3.The demand for money curve slopes downward because a rise in the nominal interest rate ________ the opportunity cost of holding money and therefore ________ the quantity of money demanded.

Select one:

a.decreases; increases

b.increases; increases

c.increases; does not change

d.decreases; decreases

e.increases; decreases

4.The velocity of circulation grows at 1 percent and real GDP grows at 3 percent. If the quantity of money grows at 2 percent, the inflation rate is

Select one:

a.10 percent.

b.4 percent.

c.2 percent.

d.zero.

e.8 percent.

5.When measuring GDP by the income approach, wage income includes

i. health-care insurance paid for by the firm for its employees.

ii. Social Security contributions made by the firm.

iii. wages paid during a worker's vacation time.

Select one:

a.i and ii only

b.ii only

c.i only

d.ii and iii only

e.i, ii and iii

6.When measuring GDP,

Select one:

a.the government sector is not counted because it does not produce goods and services.

b.the government sector is counted, and the value of the government sector in GDP is equal to its tax revenue.

c.only the federal government's expenditure on goods and services are included.

d.the government sector is not included because it is the public sector not the private sector.

e.the expenditure on goods and services by all levels of government are included.

7.When the nominal interest rate increases, the

Select one:

a.quantity of money demanded increases and there is a movement upward along the demand for money curve.

b.demand for money increases and the demand for money curve shifts rightward.

c.supply of money curve shifts rightward.

d.demand for money decreases and the demand for money curve shifts leftward.

e.quantity of money demanded decreases and there is a movement upward along the demand for money curve.

8.Investment is defined as the purchase of

Select one:

a.any financial asset only.

b.new capital goods but not additions to inventories.

c.financial assets and inventories only.

d.new capital goods and additions to inventories.

e.additions to inventories only.