Question 1

The currently used method for calculating the CPI

Accepted Answer

A)  probably overstates inflation by about 1 percentage point. 
B)  accounts for people increasing consumption of a good that falls in relative price. 
C)  has no effect on government expenditures. 
D)  None of the above answers are correct. 
A)  probably overstates inflation by about 1 percentage point. 
B)  accounts for people increasing consumption of a good that falls in relative price. 
C)  has no effect on government expenditures. 
D)  None of the above answers are correct.

Question 2

The natural unemployment rate

Accepted Answer

A)  is attained whenever the unemployment rate is less than 5 percent because 95 percent employment is considered full employment. 
B)  has been estimated to range between 4 percent and 6 percent in the United States in recent years. 
C)  occurs when 100 percent of the labor force is employed. 
D)  estimated to be close to 9 percent in recent years in the United States. 
A)  is attained whenever the unemployment rate is less than 5 percent because 95 percent employment is considered full employment. 
B)  has been estimated to range between 4 percent and 6 percent in the United States in recent years. 
C)  occurs when 100 percent of the labor force is employed. 
D)  estimated to be close to 9 percent in recent years in the United States.

Question 3

The table below shows the price index for China starting in 2000.   The inflation rate between 2004 and 2005 was

Accepted Answer

A)  3.9 percent 
B)  0.7 percent. 
C)  1.8 percent 
D)  2.8 percent 
A)  3.9 percent 
B)  0.7 percent. 
C)  1.8 percent 
D)  2.8 percent

Question 4

An economy is at full employment when .

Accepted Answer

A)  there is no frictional unemployment 
B)  there is no structural unemployment 
C)  the unemployment rate is zero 
D)  the unemployment rate equals the natural unemployment rate 
A)  there is no frictional unemployment 
B)  there is no structural unemployment 
C)  the unemployment rate is zero 
D)  the unemployment rate equals the natural unemployment rate

Question 5

If the CPI was 122.3 at the end of last year and 124.5 at the end of this year, the inflation rate over these two years was

Accepted Answer

A)  18.0 percent. 
B)  22.5 percent. 
C)  2.5 percent. 
D)  1.8 percent. 
A)  18.0 percent. 
B)  22.5 percent. 
C)  2.5 percent. 
D)  1.8 percent.

Question 6

Define and give an example of how a spell of structural unemployment can begin.

Accepted Answer

Structural unemployment arises when chan

Question 7

How would you best describe a manufacturing employee who has been fired because he was replaced by a robot (new technology) and does not have the skills necessary to help operate the robot?

Accepted Answer

A)  entrant/reentrant 
B)  structurally unemployed 
C)  job leaver 
D)  cyclically unemployed 
A)  entrant/reentrant 
B)  structurally unemployed 
C)  job leaver 
D)  cyclically unemployed

Question 8

Cyclical unemployment

Accepted Answer

A)  occurs when technology improvements change job requirements. 
B)  may increase or decrease during an expansion. 
C)  fluctuates over the business cycle. 
D)  is due mainly to job leavers. 
A)  occurs when technology improvements change job requirements. 
B)  may increase or decrease during an expansion. 
C)  fluctuates over the business cycle. 
D)  is due mainly to job leavers.

Question 9

In a country with a working- age population of 130 million, 90 million workers are employed and 10 million workers are unemployed. What is the unemployment rate?

Accepted Answer

A)  7.1 percent 
B)  7.7 percent 
C)  10.0 percent 
D)  5.0 percent 
A)  7.1 percent 
B)  7.7 percent 
C)  10.0 percent 
D)  5.0 percent

Question 10

Full employment occurs when

Accepted Answer

A)  the unemployment rate is less than 5 percent. 
B)  there is no cyclical unemployment. 
C)  there is no frictional unemployment. 
D)  there is no unemployment. 
A)  the unemployment rate is less than 5 percent. 
B)  there is no cyclical unemployment. 
C)  there is no frictional unemployment. 
D)  there is no unemployment.

Question 11

The working- age population is divided between those people in the labor force and those people unemployed.

Accepted Answer

A) True 
 B)False

Question 12

What, if any, is the impact of the CPI bias on government spending?

Accepted Answer

About one- third of government outlays,

Question 13

-In the table above, what inflation rate belongs in space B?

Accepted Answer

A)  17.0 percent 
B)  8.3 percent 
C)  6.8 percent 
D)  - 4.0 percent 
A)  17.0 percent 
B)  8.3 percent 
C)  6.8 percent 
D)  - 4.0 percent

Question 14

Which of the following people would be counted as is employed in the Current Population Survey?

Accepted Answer

A)  Misty, who just quit her job to return full- time to school 
B)  Rich, who is working 20 hours a week but wants a full- time job 
C)  April, who just graduated from college and is looking for work 
D)  Jason, who was laid off from work less than 6 months ago but who has stopped looking for work 
A)  Misty, who just quit her job to return full- time to school 
B)  Rich, who is working 20 hours a week but wants a full- time job 
C)  April, who just graduated from college and is looking for work 
D)  Jason, who was laid off from work less than 6 months ago but who has stopped looking for work

Question 15

The is calculated as the number of people divided by the labor force multiplied by 100.

Accepted Answer

A)  employment rate; employed 
B)  unemployment rate; unemployed 
C)  employment- to- population ratio; unemployed 
D)  employment- to- population ratio; in the working age population 
A)  employment rate; employed 
B)  unemployment rate; unemployed 
C)  employment- to- population ratio; unemployed 
D)  employment- to- population ratio; in the working age population

Question 16

Suppose that the unemployment rate equals 4.5 percent and that the natural unemployment rate is
5)5 percent. We can conclude that

Accepted Answer

A)  potential GDP is less than real GDP. 
B)  we have mismeasured the natural unemployment rate. 
C)  potential GDP is greater than real GDP. 
D)  potential GDP equals real GDP. 
A)  potential GDP is less than real GDP. 
B)  we have mismeasured the natural unemployment rate. 
C)  potential GDP is greater than real GDP. 
D)  potential GDP equals real GDP.

Question 17

When a worker quits a job to look for a better job,

Accepted Answer

A)  cyclical unemployment increases. 
B)  frictional unemployment increases. 
C)  structural unemployment decreases. 
D)  structural and cyclical unemployment increase. 
A)  cyclical unemployment increases. 
B)  frictional unemployment increases. 
C)  structural unemployment decreases. 
D)  structural and cyclical unemployment increase.

Question 18

Structural unemployment

Accepted Answer

A)  falls as the pace of technological progress increases. 
B)  generally lasts longer than frictional unemployment. 
C)  falls during the expansion phase of the business cycle. 
D)  falls when the government provides more generous unemployment compensation benefits. 
A)  falls as the pace of technological progress increases. 
B)  generally lasts longer than frictional unemployment. 
C)  falls during the expansion phase of the business cycle. 
D)  falls when the government provides more generous unemployment compensation benefits.

Question 19

The technique currently used to calculate the CPI implicitly assumes that over time consumers buy

Accepted Answer

A)  goods and services whose quality improves at the rate of growth of real income. 
B)  the same relative quantities of goods as in a base year. 
C)  relatively less of goods whose relative prices are rising. 
D)  relatively more of goods whose relative prices are rising. 
A)  goods and services whose quality improves at the rate of growth of real income. 
B)  the same relative quantities of goods as in a base year. 
C)  relatively less of goods whose relative prices are rising. 
D)  relatively more of goods whose relative prices are rising.

Question 20

Suppose the working- age population is 150 million, the labor force is 125 million, and employment is 120 millio
a) What is the unemployment rate?
b) Now suppose that 2 million students graduate from college and begin to look for jobs. What is the new unemployment rate if none of the students have found jobs yet?
c) Suppose that all 2 million students find jobs. What is the unemployment rate now?

Accepted Answer

a) The unemployment rate is (5 million u

The currently used method for calculating the CPI

The natural unemployment rate

The table below shows the price index for China starting in 2000. The inflation rate between 2004 and 2005 was

An economy is at full employment when .

If the CPI was 122.3 at the end of last year and 124.5 at the end of this year, the inflation rate over these two years was

Define and give an example of how a spell of structural unemployment can begin.

How would you best describe a manufacturing employee who has been fired because he was replaced by a robot (new technology) and does not have the skills necessary to help operate the robot?

Cyclical unemployment

In a country with a working- age population of 130 million, 90 million workers are employed and 10 million workers are unemployed. What is the unemployment rate?

Full employment occurs when

The working- age population is divided between those people in the labor force and those people unemployed.

What, if any, is the impact of the CPI bias on government spending?

-In the table above, what inflation rate belongs in space B?

Which of the following people would be counted as is employed in the Current Population Survey?

The is calculated as the number of people divided by the labor force multiplied by 100.

Suppose that the unemployment rate equals 4.5 percent and that the natural unemployment rate is 5)5 percent. We can conclude that

When a worker quits a job to look for a better job,

Structural unemployment

The technique currently used to calculate the CPI implicitly assumes that over time consumers buy

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

The currently used method for calculating the CPI

The natural unemployment rate

The table below shows the price index for China starting in 2000. The inflation rate between 2004 and 2005 was

An economy is at full employment when .

If the CPI was 122.3 at the end of last year and 124.5 at the end of this year, the inflation rate over these two years was

Define and give an example of how a spell of structural unemployment can begin.

How would you best describe a manufacturing employee who has been fired because he was replaced by a robot (new technology) and does not have the skills necessary to help operate the robot?

Cyclical unemployment

In a country with a working- age population of 130 million, 90 million workers are employed and 10 million workers are unemployed. What is the unemployment rate?

Full employment occurs when

The working- age population is divided between those people in the labor force and those people unemployed.

What, if any, is the impact of the CPI bias on government spending?

-In the table above, what inflation rate belongs in space B?

Which of the following people would be counted as is employed in the Current Population Survey?

The is calculated as the number of people divided by the labor force multiplied by 100.

Suppose that the unemployment rate equals 4.5 percent and that the natural unemployment rate is 5)5 percent. We can conclude that

When a worker quits a job to look for a better job,

Structural unemployment

The technique currently used to calculate the CPI implicitly assumes that over time consumers buy

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