Resource Markets: Sample Quiz

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1. A vertical long-run aggregate supply curve is based on the assumption that in the long run:

wages and prices are completely inflexible.
 government is needed to stabilize the economy.
 the economy has a natural level of output and unemployment.
 the amount of money is determined by its commodity backing.

2. When students leave school in May and begin to search for a job, the type of unemployment they represent is usually:

cyclical unemployment.
 structural unemployment.
 fiscal unemployment.
 frictional unemployment.

3. The evidence of the 1970s cast doubt on the idea that:

changes in money affected prices.
 consumption depended on income.
 there was a stable trade-off between inflation and unemployment.
 the Federal Reserve could control bank reserves.

4. The aggregated market which monetarists stress as a source of economic disturbances is the market for:

goods and services.
 resources.
 money balances.
 financial assets.

5. Cain Zian is structurally unemployed. What does this mean?

He is unemployed because he refused job offers in hope of better future offers.
 His ability to benefit any employer is less than he will cost that employer.
 He was willing to accept a layoff rather than a pay cut.
 He does not have a job because he will not spend the time needed to discover the job offers that exist.

6. The Phillips Curve was a very influential guide to government policy decisions during the:

1930s.
 1940s and 1950s.
 1960s and 1970s.
 1980s.

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Copyright Robert Schenk