1. **A nation has a working-age population of 95 million, with 81 million working and 5 million not working and not looking for work. The unemployment rate is**
- 14.7%
- 5.2%
- 88%
- 10%
- 93%

2. **If the government increases government spending, then the aggregate demand curve will:**
- become steeper.
- shift to the right.
- become flatter.
- shift to the left.

3. **When workers lose their jobs because there is no longer a demand for their particular skills, it is called ____________ unemployment.**
- Frictional
- Cyclical
- Seasonal
- Operational
- Structural

4. **The short-run aggregate supply curve is _________, while the long-run aggregate supply curve is ____________.**
- Upward sloping; horizontal
- Upward sloping; downward sloping
- Vertical; upward sloping
- Upward sloping; vertical
- Downward sloping; vertical

5. **A positive demand shock will cause, in the short run,  
I. economic growth  
II. inflation  
III. increased employment**
- II only
- I, II and III
- I only
- II and III only
- III only

6. **Which of the following could cause inflation in the short run?**
- A decrease in the amount of exports
- A decrease in consumer incomes
- A decrease in the wage rate
- An increase in the amount of imports
- An increase in the price of an energy source such as natural gas

7. **All else equal, if there is an increase in the nominal wage rate, the price level will _________ and the amount of aggregate output will ___________ in the short run.**
- Increase; remain unchanged
- Increase; increase
- Decrease; decrease
- Increase; decrease
- Remain unchanged; increase

8. **Which of the following statements accurately describes why aggregate demand curves slope downward?  
I. When income levels rise, all else equal, consumers increase spending at all price levels.  
II. When interest rates fall, all else equal, firms increase investment spending at any price level.  
III. When the price level falls, all else equal, the value of saved assets rises and consumers increase spending.**
- II and III only
- I only
- I and II only
- III only
- II only

9. **Grover was released from his sales job at the auto dealership when the economy slipped into a recession. Grover is classified as**
- (D) Frictionally unemployed
- (B) Seasonally unemployed
- (C) Out of the labor force
- (A) Structurally unemployed
- (E) Cyclically unemployed

10. **Suppose that energy prices increase across the economy. The short-run aggregate supply (SRAS) curve will:**
- shift to the right.
- shift to the left.
- be unchanged.
- move to the vertical part.

11. **If the central bank decreases the supply of money, then the aggregate demand curve will:**
- become steeper.
- shift to the left.
- become flatter.
- shift to the right.
- be unchanged.

12. **The natural rate of unemployment is equal to**
- Frictional unemployment plus structural unemployment plus cyclical unemployment
- Frictional unemployment
- Zero unemployment
- Structural unemployment
- Frictional unemployment plus structural unemployment

13. **Because of the relationship between prices and the real money supply, the aggregate demand curve is:**
- vertical.
- horizontal.
- downward-sloping.
- upward-sloping.

14. **If the government raises taxes and the central bank maintains a policy of keeping the interest rate constant, then the combined effect of these two policies would cause income to:**
- rise.
- It cannot be determined from the information given.
- stay the same.
- fall.

15. **Oscar recently quit his job at the city sanitation office and is applying for openings in the park departments. Oscar is currently**
- Seasonally unemployed
- Frictionally unemployed
- Out of the labor force
- Structurally unemployed
- Cyclically unemployed