Question 1

During a period of unpredictable inflation,

Accepted Answer

A)  the value of money changes unpredictably. 
B)  the price level falls unpredictably. 
C)  the economy is unharmed. 
D)  the Consumer Price Index falls. 
A)  the value of money changes unpredictably. 
B)  the price level falls unpredictably. 
C)  the economy is unharmed. 
D)  the Consumer Price Index falls.

Question 2

Based on the information in the above table, what is the unemployment rate? What is the labor force participation rate?

Accepted Answer

The unemployment rate equals (6 million

Question 3

During an economic expansion, real GDP _ and unemployment .

Accepted Answer

A)  increases; increases 
B)  decreases; decreases 
C)  decreases; increases 
D)  increases; decreases 
A)  increases; increases 
B)  decreases; decreases 
C)  decreases; increases 
D)  increases; decreases

Question 4

In a country with a working- age population of 150 million, 120 million workers are employed and 10 million workers are unemployed. What is the size of the labor force?

Accepted Answer

A)  120 million 
B)  150 million 
C)  10 million 
D)  130 million 
A)  120 million 
B)  150 million 
C)  10 million 
D)  130 million

Question 5

If the number of people unemployed is 100, the number of people employed is 1000, and the working- age population is 1400, then the employment- to- population ratio is

Accepted Answer

A)  78.6 percent. 
B)  66.6 percent. 
C)  71.4 percent. 
D)  75 percent. 
A)  78.6 percent. 
B)  66.6 percent. 
C)  71.4 percent. 
D)  75 percent.

Question 6

In an economy, 40 million people are employed, 2 million are unemployed, and 8 million are not in the labor force. What is the labor force participation rate?

Accepted Answer

A)  84 percent 
B)  87.5 percent 
C)  80 percent 
D)  83 percent 
A)  84 percent 
B)  87.5 percent 
C)  80 percent 
D)  83 percent

Question 7

The economy is at full employment when

Accepted Answer

A)  there are no unemployed workers. 
B)  all unemployment is frictional or structural. 
C)  all unemployment is cyclical. 
D)  there are fewer unemployed workers than available jobs. 
A)  there are no unemployed workers. 
B)  all unemployment is frictional or structural. 
C)  all unemployment is cyclical. 
D)  there are fewer unemployed workers than available jobs.

Question 8

The number of job leavers varies quite a bit over business cycle.

Accepted Answer

A) True 
 B)False

Question 9

Cyclical unemployment _ during expansions and during recessions.

Accepted Answer

A)  decreases; decreases 
B)  increases; increases 
C)  increases; decreases 
D)  decreases; increases 
A)  decreases; decreases 
B)  increases; increases 
C)  increases; decreases 
D)  decreases; increases

Question 10

When the economy moves into and out of recessions and expansions, the unemployment rate fluctuates around the

Accepted Answer

A)  frictional unemployment rate. 
B)  natural unemployment rate. 
C)  cyclical unemployment. 
D)  structural unemployment rate. 
A)  frictional unemployment rate. 
B)  natural unemployment rate. 
C)  cyclical unemployment. 
D)  structural unemployment rate.

Question 11

Which of the following would NOT be considered unemployed?

Accepted Answer

A)  an individual fired by her employer 
B)  a job leaver who is looking for a better job 
C)  a new entrant to the labor force 
D)  a newly retired worker 
A)  an individual fired by her employer 
B)  a job leaver who is looking for a better job 
C)  a new entrant to the labor force 
D)  a newly retired worker

Question 12

Which of the following pieces of information do you need to calculate the labor force participation r
I. the number of employed persons
II. the number of unemployed persons
III. the population
IV. the working age population

Accepted Answer

A)  I and II 
B)  I, II and III 
C)  I, II and IV 
D)  I and III 
A)  I and II 
B)  I, II and III 
C)  I, II and IV 
D)  I and III

Question 13

The commodity substitution bias is that consumers substitute high- quality goods for low- quality goods.

Accepted Answer

A) True 
 B)False

Question 14

Assume that the total labor force is 100 individuals with 10 unemployed. The unemployment rate is
) Now assume that 10 people drop out of the labor force and that 10 remain unemployed. The new unemployment rate is .

Accepted Answer

A)  11 percent, 10 percent 
B)  10 percent, 11 percent 
C)  10 percent, 9 percent 
D)  9 percent, 10 percent 
A)  11 percent, 10 percent 
B)  10 percent, 11 percent 
C)  10 percent, 9 percent 
D)  9 percent, 10 percent

Question 15

Substitution bias in the CPI refers to the fact that the CPI

Accepted Answer

A)  takes no account of the substitution of goods by consumers when relative prices change. 
B)  takes into account the substitution of goods by consumers when relative prices change. 
C)  substitutes relative prices for absolute prices of goods. 
D)  substitutes quality changes whenever they occur without taking account of the cost of the quality changes. 
A)  takes no account of the substitution of goods by consumers when relative prices change. 
B)  takes into account the substitution of goods by consumers when relative prices change. 
C)  substitutes relative prices for absolute prices of goods. 
D)  substitutes quality changes whenever they occur without taking account of the cost of the quality changes.

Question 16

The table below shows the monthly inflation rate using the CPI deflator in 2008.
 
The data show that

Accepted Answer

A)  commodity substitution bias occurred in August. 
B)  an increase in food and energy prices occurred in July. 
C)  cost the CPI basket decreased over the 5- month period. 
D)  food and energy prices increased steadily over the period. 
A)  commodity substitution bias occurred in August. 
B)  an increase in food and energy prices occurred in July. 
C)  cost the CPI basket decreased over the 5- month period. 
D)  food and energy prices increased steadily over the period.

Question 17

-The above table shows answers given by people interviewed in the Current Population Survey. Which person is cyclically unemployed?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  None of the people 
A)  A 
B)  B 
C)  C 
D)  None of the people

Question 18

When the economy is at full employment the

Accepted Answer

A)  natural unemployment rate is equal to 10 percent. 
B)  unemployment rate is equal to 0 percent. 
C)  natural unemployment rate equals the unemployment rate. 
D)  natural unemployment rate is equal to 0 percent. 
A)  natural unemployment rate is equal to 10 percent. 
B)  unemployment rate is equal to 0 percent. 
C)  natural unemployment rate equals the unemployment rate. 
D)  natural unemployment rate is equal to 0 percent.

Question 19

People enter the labor force .

Accepted Answer

A)  as entrants or reentrants 
B)  by being hired or recalled 
C)  when they switch from being unemployed to being employed 
D)  when their unemployment benefits run out 
A)  as entrants or reentrants 
B)  by being hired or recalled 
C)  when they switch from being unemployed to being employed 
D)  when their unemployment benefits run out

Question 20

The unemployment rate equals

Accepted Answer

A)  (labor force/working age population) × 100. 
B)  (number of people employed/number of people age 16 and over) × 100. 
C)  (number of people employed/working age population) × 100. 
D)  (number of people unemployed/labor force) × 100. 
A)  (labor force/working age population) × 100. 
B)  (number of people employed/number of people age 16 and over) × 100. 
C)  (number of people employed/working age population) × 100. 
D)  (number of people unemployed/labor force) × 100.

During a period of unpredictable inflation,

Based on the information in the above table, what is the unemployment rate? What is the labor force participation rate?

During an economic expansion, real GDP _ and unemployment .

In a country with a working- age population of 150 million, 120 million workers are employed and 10 million workers are unemployed. What is the size of the labor force?

If the number of people unemployed is 100, the number of people employed is 1000, and the working- age population is 1400, then the employment- to- population ratio is

In an economy, 40 million people are employed, 2 million are unemployed, and 8 million are not in the labor force. What is the labor force participation rate?

The economy is at full employment when

The number of job leavers varies quite a bit over business cycle.

Cyclical unemployment _ during expansions and during recessions.

When the economy moves into and out of recessions and expansions, the unemployment rate fluctuates around the

Which of the following would NOT be considered unemployed?

Which of the following pieces of information do you need to calculate the labor force participation r I. the number of employed persons II. the number of unemployed persons III. the population IV. the working age population

The commodity substitution bias is that consumers substitute high- quality goods for low- quality goods.

Assume that the total labor force is 100 individuals with 10 unemployed. The unemployment rate is ) Now assume that 10 people drop out of the labor force and that 10 remain unemployed. The new unemployment rate is .

Substitution bias in the CPI refers to the fact that the CPI

The table below shows the monthly inflation rate using the CPI deflator in 2008. The data show that

-The above table shows answers given by people interviewed in the Current Population Survey. Which person is cyclically unemployed?

When the economy is at full employment the

People enter the labor force .

The unemployment rate equals

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 5: Monitoring Jobs and Inflation

During a period of unpredictable inflation,

Based on the information in the above table, what is the unemployment rate? What is the labor force participation rate?

During an economic expansion, real GDP _ and unemployment .

In a country with a working- age population of 150 million, 120 million workers are employed and 10 million workers are unemployed. What is the size of the labor force?

If the number of people unemployed is 100, the number of people employed is 1000, and the working- age population is 1400, then the employment- to- population ratio is

In an economy, 40 million people are employed, 2 million are unemployed, and 8 million are not in the labor force. What is the labor force participation rate?

The economy is at full employment when

The number of job leavers varies quite a bit over business cycle.

Cyclical unemployment _ during expansions and during recessions.

When the economy moves into and out of recessions and expansions, the unemployment rate fluctuates around the

Which of the following would NOT be considered unemployed?

Which of the following pieces of information do you need to calculate the labor force participation r I. the number of employed persons II. the number of unemployed persons III. the population IV. the working age population

The commodity substitution bias is that consumers substitute high- quality goods for low- quality goods.

Assume that the total labor force is 100 individuals with 10 unemployed. The unemployment rate is ) Now assume that 10 people drop out of the labor force and that 10 remain unemployed. The new unemployment rate is .

Substitution bias in the CPI refers to the fact that the CPI

The table below shows the monthly inflation rate using the CPI deflator in 2008. The data show that

-The above table shows answers given by people interviewed in the Current Population Survey. Which person is cyclically unemployed?

When the economy is at full employment the

People enter the labor force .

The unemployment rate equals

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters