1. The fact that millions of jobs are created and destroyed every year is a sign of

A. a serious shortcoming of our economic system

B. the main reason why the US unemployment rate is persistently high

C. what we would expect in a vibrant dynamic market system

D., not a significant issue as long as the size of job creation is many times larger than job destruction, as is often the case

2. Who would be hurt by unanticipated inflation?

A. those living on incomes with cost-of-living adjustments B. those who find prices rising less rapidly than their nominal incomes C. those who borrowed when prices were lower D. those who lent money at a fixed interest rate

3. If the average level of nominal income in a nation is $21,000 and the CPI is 154, the average real income would be about

A. $12546

B. $13636

C. $15299

D. $17823

E. None of the above

4. If the Consumer Price Index was 110 in one year and 117 in the next year, then the rate of inflation from one year to the next was

A. 6.4%

B. 4.7%

C. 3.5%

D. 7.1%

5. The full employment in the economy is considered to be achieved when

A. frictional unemployment is zero

B. structural unemployment is zero

C. cyclical unemployment is zero

D. the (total) unemployment rate is zero