Question 1

The biases in the CPI include the

Accepted Answer

A)  old goods, unemployment, and inflation biases. 
B)  substitution, new goods, and old goods biases. 
C)  new goods, quality change, and substitution biases. 
D)  old goods, new goods, and quality change biases. 
A)  old goods, unemployment, and inflation biases. 
B)  substitution, new goods, and old goods biases. 
C)  new goods, quality change, and substitution biases. 
D)  old goods, new goods, and quality change biases.

Question 2

The labor force is defined as the

Accepted Answer

A)  number of people in blue-collar jobs. 
B)  number of people over 16 years of age. 
C)  sum of employed and unemployed people. 
D)  number of people who are working. 
A)  number of people in blue-collar jobs. 
B)  number of people over 16 years of age. 
C)  sum of employed and unemployed people. 
D)  number of people who are working.

Question 3

The absence of cyclical unemployment means the economy is at the natural unemployment rate.)

Accepted Answer

A) True 
 B)False

Question 4

In a period of rapid, unexpected inflation, resources can be lost

Accepted Answer

A)  because rapid inflation almost always turns into a hyperinflation. 
B)  when firms invest in research and development instead of forecasting inflation. 
C)  when firms use resources to forecast inflation. 
D)  Both answers B and C are correct. 
A)  because rapid inflation almost always turns into a hyperinflation. 
B)  when firms invest in research and development instead of forecasting inflation. 
C)  when firms use resources to forecast inflation. 
D)  Both answers B and C are correct.

Question 5

The natural unemployment rate increased significantly during the 1980s and the 1990s.)

Accepted Answer

A) True 
 B)False

Question 6

$$\begin{array} { | l | l | } 
\hline \text { Year } & \text { Price level } \
\hline 2008 & 91 \
\hline 2009 & 100 \
\hline 2010 & 110 \
\hline 2011 & 121 \
\hline
\end{array}$$
-In the above table, the inflation rate between 2008 and 2009 is approximately

Accepted Answer

A)  10 percent. 
B)  0.9 percent. 
C)  1 percent. 
D)  100 percent. 
A)  10 percent. 
B)  0.9 percent. 
C)  1 percent. 
D)  100 percent.

Question 7

Which of the following is NOT  considered to be in the labor force?

Accepted Answer

A)  a person who is not working but who has tried to find a job in the past week 
B)  a student who works part-time 
C)  a person who is waiting to start a new job in the next 30 days 
D)  a person who is not working and who has not tried to find a job 
A)  a person who is not working but who has tried to find a job in the past week 
B)  a student who works part-time 
C)  a person who is waiting to start a new job in the next 30 days 
D)  a person who is not working and who has not tried to find a job

Question 8

Frictional unemployment

Accepted Answer

A)  is voluntary part-time unemployment. 
B)  is unemployment associated normal labor turnover. 
C)  includes discouraged workers. 
D)  is unemployment associated with declining industries. 
A)  is voluntary part-time unemployment. 
B)  is unemployment associated normal labor turnover. 
C)  includes discouraged workers. 
D)  is unemployment associated with declining industries.

Question 9

Explain the CPI bias and how it can distort private contracts and increase government outlays.

Accepted Answer

The CPI bias is the point that the CPI o

Question 10

Suppose there are currently 100 people unemployed, 1500 people employed, 1600 people in the labor force, and 2000 people in the working age population. The unemployment rate equals 100 times

Accepted Answer

A)  100/2000. 
B)  1500/2000. 
C)  100/1600. 
D)  100/1500. 
A)  100/2000. 
B)  1500/2000. 
C)  100/1600. 
D)  100/1500.

Question 11

$$\begin{array} { | l | c | c | } 
\hline { \text { Item } } & \begin{array} { l } 
\text { Quantity } \
( 2010 )
\end{array} & \begin{array} { l } 
\text { Price } \
( 2010 )
\end{array} \
\hline \text { Meals } & 100 & \$ 10.00 \
\hline \text { Parking } & 50 & \$ 100.00 \
\hline
\end{array}$$ 
 $$\begin{array} { | l | c | c | } 
\hline { \text { Item } } & \begin{array} { l } 
\text { Quantity } \
( 2011 )
\end{array} & \begin{array} { l } 
\text { Price } \
( 2011 )
\end{array} \
\hline \text { Meals } & 100 & \$ 12.00 \
\hline \text { Parking } & 50 & \$ 97.50 \
\hline
\end{array}$$
-The tables above give the purchases of a typical consumer in a country comprised of one large city. These consumers purchase only restaurant meals and parking. The year 2010 is the reference base period.
a) Find the total cost of the CPI basket for 2010 and 2011.
b) What is the CPI in 2010 and in 2011?
c) What is the inflation rate between 2010 and 2011?

Accepted Answer

a) The total cost of the CPI basket in 2

Question 12

The best example of a frictionally unemployed individual is

Accepted Answer

A)  Charles who has lost his job as an autoworker because of increased imports and canʹt find a good job that utilizes his skills. 
B)  Sam who lost his job as a real estate salesperson when the housing market went soft because of a recession. 
C)  Sandy who has few skills and is no longer looking for work. 
D)  Mary who quit her job to find work closer to her home. 
A)  Charles who has lost his job as an autoworker because of increased imports and canʹt find a good job that utilizes his skills. 
B)  Sam who lost his job as a real estate salesperson when the housing market went soft because of a recession. 
C)  Sandy who has few skills and is no longer looking for work. 
D)  Mary who quit her job to find work closer to her home.

Question 13

Unlike cyclical unemployment, both frictional and structural unemployment rise during recessions and fall during expansions.

Accepted Answer

A) True 
 B)False

Question 14

Cyclical unemployment__________ during expansions and _________during recessions.

Accepted Answer

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

Question 15

Full employment occurs when the

Accepted Answer

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

Question 16

The percentage of the people of working age who have jobs is called the__________.

Accepted Answer

A)  employment-to-working-age-population ratio 
B)  employment-to-population ratio 
C)  labor force 
D)  inverse of the unemployment rate 
A)  employment-to-working-age-population ratio 
B)  employment-to-population ratio 
C)  labor force 
D)  inverse of the unemployment rate

Question 17

Cyclical unemployment is the result of

Accepted Answer

A)  technological change or foreign competition. 
B)  normal labor market turnover. 
C)  irresponsible workers with poor work habits. 
D)  the business cycle. 
A)  technological change or foreign competition. 
B)  normal labor market turnover. 
C)  irresponsible workers with poor work habits. 
D)  the business cycle.

Question 18

At the natural unemployment rate, there is no

Accepted Answer

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

Question 19

Structural unemployment is

Accepted Answer

A)  associated with the changing of jobs in a dynamic economy. 
B)  associated with changes in technology that change required job skills. 
C)  associated with general downturns in the economy. 
D)  very short-term unemployment. 
A)  associated with the changing of jobs in a dynamic economy. 
B)  associated with changes in technology that change required job skills. 
C)  associated with general downturns in the economy. 
D)  very short-term unemployment.

Question 20

$$\begin{array} { | l | l | c | } 
\hline  { \text { Year } } & \text { Price index } & \begin{array} { l } 
\text { Inflation rate } \
\text { (percent) }
\end{array} \
\hline 1 & 100 & \
\hline 2 & 117 & \text { A } \
\hline 3 & 125 & \text { B } \
\hline 4 & 120 & \text { C } \
\hline 5 & \mathrm { D } & 8.3 \
\hline 6 & 150 & \text { E } \
\hline
\end{array}$$
-In the table above, what price level belongs in space D?

Accepted Answer

A)  140 
B)  125 
C)  130 
D)  145 
A)  140 
B)  125 
C)  130 
D)  145

The biases in the CPI include the

The labor force is defined as the

The absence of cyclical unemployment means the economy is at the natural unemployment rate.)

In a period of rapid, unexpected inflation, resources can be lost

The natural unemployment rate increased significantly during the 1980s and the 1990s.)

Year Price level 2008 91 2009 100 2010 110 2011 121 -In the above table, the inflation rate between 2008 and 2009 is approximately

Which of the following is NOT considered to be in the labor force?

Frictional unemployment

Explain the CPI bias and how it can distort private contracts and increase government outlays.

Suppose there are currently 100 people unemployed, 1500 people employed, 1600 people in the labor force, and 2000 people in the working age population. The unemployment rate equals 100 times

The best example of a frictionally unemployed individual is

Unlike cyclical unemployment, both frictional and structural unemployment rise during recessions and fall during expansions.

Cyclical unemployment__ during expansions and _during recessions.

Full employment occurs when the

The percentage of the people of working age who have jobs is called the__________.

Cyclical unemployment is the result of

At the natural unemployment rate, there is no

Structural unemployment is

Year Price index Inflation rate (percent) 1 100 2 117 A 3 125 B 4 120 C 5 8.3 6 150 E -In the table above, what price level belongs in space D?

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

Exam 5: Monitoring Jobs and Inflation

The biases in the CPI include the

The labor force is defined as the

The absence of cyclical unemployment means the economy is at the natural unemployment rate.)

In a period of rapid, unexpected inflation, resources can be lost

The natural unemployment rate increased significantly during the 1980s and the 1990s.)

Year Price level 2008 91 2009 100 2010 110 2011 121 -In the above table, the inflation rate between 2008 and 2009 is approximately

Which of the following is NOT considered to be in the labor force?

Frictional unemployment

Explain the CPI bias and how it can distort private contracts and increase government outlays.

Suppose there are currently 100 people unemployed, 1500 people employed, 1600 people in the labor force, and 2000 people in the working age population. The unemployment rate equals 100 times

The best example of a frictionally unemployed individual is

Unlike cyclical unemployment, both frictional and structural unemployment rise during recessions and fall during expansions.

Cyclical unemployment__________ during expansions and _________during recessions.

Full employment occurs when the

The percentage of the people of working age who have jobs is called the__________.

Cyclical unemployment is the result of

At the natural unemployment rate, there is no

Structural unemployment is

Year Price index Inflation rate (percent) 1 100 2 117 A 3 125 B 4 120 C 5 8.3 6 150 E -In the table above, what price level belongs in space D?

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

Cyclical unemployment__ during expansions and _during recessions.