Question 1

A passive job search:

Accepted Answer

A)  entails merely talking to friends about jobs. 
B)  means participating in productive activities, like sending off résumés. 
C)  entails the scheduling of job interviews. 
D)  includes contacting a private employment agency. 
A)  entails merely talking to friends about jobs. 
B)  means participating in productive activities, like sending off résumés. 
C)  entails the scheduling of job interviews. 
D)  includes contacting a private employment agency.

Question 2

Johnny is 17 and works in his father's bubble gum store 10 hours a week after school. His father pays him no money but buys video games for him. However, Johnny earns a spot on the high school football team and no longer works in his father's store. How is Johnny categorized in the unemployment figures?

Accepted Answer

A)  Johnny is considered unemployed. 
B)  Johnny is considered employed because he works hard at his football career. 
C)  Johnny is not part of the labor force. 
D)  Johnny is considered underemployed. 
A)  Johnny is considered unemployed. 
B)  Johnny is considered employed because he works hard at his football career. 
C)  Johnny is not part of the labor force. 
D)  Johnny is considered underemployed.

Question 3

Suppose the market basket of goods costs $10,000 in 2009, the base period, and that same basket of goods now costs $11,200. What has been the percentage change in the cost of goods between the base period and the current period?

Accepted Answer

A)  +20% 
B)  +11.2% 
C)  -10.7% 
D)  -20% 
A)  +20% 
B)  +11.2% 
C)  -10.7% 
D)  -20%

Question 4

Wages set high to discourage employee turnover are called _____ wages.

Accepted Answer

A)  turnover minimization 
B)  efficiency 
C)  productivity 
D)  labor utilization 
A)  turnover minimization 
B)  efficiency 
C)  productivity 
D)  labor utilization

Question 5

Suppose the unemployment rate is 10% and an economist breaks the unemployment rate into the following components: frictional (3%) and structural (3%). Based on these estimates, the cyclical inflation rate is:

Accepted Answer

A)  3%. 
B)  4%. 
C)  5%. 
D)  6%. 
A)  3%. 
B)  4%. 
C)  5%. 
D)  6%.

Question 6

There are 15 million people living in Marketstan, of whom 9 million are working and 1 million are actively looking for work. What is the size of Marketstan's labor force?

Accepted Answer

A)  15 million 
B)  10 million 
C)  5 million 
D)  16 million 
A)  15 million 
B)  10 million 
C)  5 million 
D)  16 million

Question 7

(Table) According to the table, if 50 discouraged workers suddenly decide to start actively seeking employment again, what will be the unemployment rate of this economy? $$\begin{array} { | l | r | } 
\hline \text { Population } & 500 \
\hline \text { Number employed } & 300 \
\hline \text { Number unemployed } & 50 \
\hline
\end{array}$$

Accepted Answer

A)  10% 
B)  14.3% 
C)  16.67% 
D)  25% 
A)  10% 
B)  14.3% 
C)  16.67% 
D)  25%

Question 8

The GDP deflator is the narrowest of our measures of inflation.

Accepted Answer

A) True 
 B)False

Question 9

During a deflationary period, prices will increase at a decreasing rate.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements represents a problem with accurately measuring the price of health care?

Accepted Answer

A)  Payments made by Medicaid and Medicare are not included. 
B)  People with good health insurance policies overuse health facilities. 
C)  Doctors sometimes charge excessive and inaccurate prices. 
D)  Pharmaceutical prices are not market prices. 
A)  Payments made by Medicaid and Medicare are not included. 
B)  People with good health insurance policies overuse health facilities. 
C)  Doctors sometimes charge excessive and inaccurate prices. 
D)  Pharmaceutical prices are not market prices.

Question 11

The natural rate of employment:

Accepted Answer

A)  explains why some people are underemployed. 
B)  explains why the unemployment rate is high. 
C)  occurs when the actual inflation rate is lower than the consumer's inflationary expectations. 
D)  is the rate at which the actual inflation rate is equal to people's inflationary expectations. 
A)  explains why some people are underemployed. 
B)  explains why the unemployment rate is high. 
C)  occurs when the actual inflation rate is lower than the consumer's inflationary expectations. 
D)  is the rate at which the actual inflation rate is equal to people's inflationary expectations.

Question 12

Inflation hurts individuals with fixed interest rate mortgages.

Accepted Answer

A) True 
 B)False

Question 13

Discouraged workers are counted in the labor force.

Accepted Answer

A) True 
 B)False

Question 14

People are considered employed if they are:

Accepted Answer

A)  unpaid family workers. 
B)  on strike. 
C)  on vacation. 
D)  All of those listed are considered employed. 
A)  unpaid family workers. 
B)  on strike. 
C)  on vacation. 
D)  All of those listed are considered employed.

Question 15

Frictional unemployment is:

Accepted Answer

A)  short-term unemployment associated with people who are switching jobs. 
B)  long-term unemployment caused by changes in consumer demand or technology. 
C)  the unemployment that arises due to downturns in the business cycle. 
D)  equivalent to the natural rate of unemployment. 
A)  short-term unemployment associated with people who are switching jobs. 
B)  long-term unemployment caused by changes in consumer demand or technology. 
C)  the unemployment that arises due to downturns in the business cycle. 
D)  equivalent to the natural rate of unemployment.

Question 16

The GDP deflator is an index that includes prices of all of the following EXCEPT:

Accepted Answer

A)  consumer goods. 
B)  investment goods. 
C)  imports. 
D)  government goods and services. 
A)  consumer goods. 
B)  investment goods. 
C)  imports. 
D)  government goods and services.

Question 17

Workers who want to work but have been frustrated by the inability to find work and have stopped searching are known as:

Accepted Answer

A)  the invisible unemployed. 
B)  temporary workers. 
C)  discouraged workers. 
D)  the disgruntled unemployed. 
A)  the invisible unemployed. 
B)  temporary workers. 
C)  discouraged workers. 
D)  the disgruntled unemployed.

Question 18

The payroll survey has a larger sample than the household survey and so is considered a more accurate measure of employment.

Accepted Answer

A) True 
 B)False

Question 19

The producer price index measures the average changes in the prices received by domestic producers for their output.

Accepted Answer

A) True 
 B)False

Question 20

Use of the GDP deflator allows economists to estimate the real rate of growth of the economy.

Accepted Answer

A) True 
 B)False

A passive job search:

Suppose the market basket of goods costs $10,000 in 2009, the base period, and that same basket of goods now costs $11,200. What has been the percentage change in the cost of goods between the base period and the current period?

Wages set high to discourage employee turnover are called _____ wages.

Suppose the unemployment rate is 10% and an economist breaks the unemployment rate into the following components: frictional (3%) and structural (3%). Based on these estimates, the cyclical inflation rate is:

There are 15 million people living in Marketstan, of whom 9 million are working and 1 million are actively looking for work. What is the size of Marketstan's labor force?

(Table) According to the table, if 50 discouraged workers suddenly decide to start actively seeking employment again, what will be the unemployment rate of this economy? Population 500 Number employed 300 Number unemployed 50

The GDP deflator is the narrowest of our measures of inflation.

During a deflationary period, prices will increase at a decreasing rate.

Which of the following statements represents a problem with accurately measuring the price of health care?

The natural rate of employment:

Inflation hurts individuals with fixed interest rate mortgages.

Discouraged workers are counted in the labor force.

People are considered employed if they are:

Frictional unemployment is:

The GDP deflator is an index that includes prices of all of the following EXCEPT:

Workers who want to work but have been frustrated by the inability to find work and have stopped searching are known as:

The payroll survey has a larger sample than the household survey and so is considered a more accurate measure of employment.

The producer price index measures the average changes in the prices received by domestic producers for their output.

Use of the GDP deflator allows economists to estimate the real rate of growth of the economy.

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Economic Growth

Aggregate Expenditures

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomics

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Exam 6: Measuring Inflation and Unemployment

A passive job search:

Suppose the market basket of goods costs $10,000 in 2009, the base period, and that same basket of goods now costs $11,200. What has been the percentage change in the cost of goods between the base period and the current period?

Wages set high to discourage employee turnover are called _____ wages.

Suppose the unemployment rate is 10% and an economist breaks the unemployment rate into the following components: frictional (3%) and structural (3%). Based on these estimates, the cyclical inflation rate is:

There are 15 million people living in Marketstan, of whom 9 million are working and 1 million are actively looking for work. What is the size of Marketstan's labor force?

(Table) According to the table, if 50 discouraged workers suddenly decide to start actively seeking employment again, what will be the unemployment rate of this economy? Population 500 Number employed 300 Number unemployed 50

The GDP deflator is the narrowest of our measures of inflation.

During a deflationary period, prices will increase at a decreasing rate.

Which of the following statements represents a problem with accurately measuring the price of health care?

The natural rate of employment:

Inflation hurts individuals with fixed interest rate mortgages.

Discouraged workers are counted in the labor force.

People are considered employed if they are:

Frictional unemployment is:

The GDP deflator is an index that includes prices of all of the following EXCEPT:

Workers who want to work but have been frustrated by the inability to find work and have stopped searching are known as:

The payroll survey has a larger sample than the household survey and so is considered a more accurate measure of employment.

The producer price index measures the average changes in the prices received by domestic producers for their output.

Use of the GDP deflator allows economists to estimate the real rate of growth of the economy.

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Economic Growth

Aggregate Expenditures

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomics

Filters