Question 1

_____ is an overall decline in prices throughout the economy.

Accepted Answer

A)  Disinflation 
B)  Deflation 
C)  Hyperinflation 
D)  The price level 
A)  Disinflation 
B)  Deflation 
C)  Hyperinflation 
D)  The price level

Question 2

The unemployment rate is:

Accepted Answer

A)  100% minus the labor force participation rate. 
B)  the number of unemployed divided by the total population. 
C)  the number of employed divided by the labor force. 
D)  the number of unemployed divided by the labor force. 
A)  100% minus the labor force participation rate. 
B)  the number of unemployed divided by the total population. 
C)  the number of employed divided by the labor force. 
D)  the number of unemployed divided by the labor force.

Question 3

The GDP deflator for the base year is:

Accepted Answer

A)  less than 100. 
B)  always equal to 100. 
C)  greater than 100. 
D)  dependent on the quantities of output and the prices at which outputs are sold in the base year. 
A)  less than 100. 
B)  always equal to 100. 
C)  greater than 100. 
D)  dependent on the quantities of output and the prices at which outputs are sold in the base year.

Question 4

Which of the following pairs is NOT synonymous?

Accepted Answer

A)  nonaccelerating inflation rate of unemployment and full employment 
B)  full employment and natural rate of unemployment 
C)  cyclical unemployment and full employment 
D)  natural rate of unemployment and nonaccelerating inflation rate of unemployment 
A)  nonaccelerating inflation rate of unemployment and full employment 
B)  full employment and natural rate of unemployment 
C)  cyclical unemployment and full employment 
D)  natural rate of unemployment and nonaccelerating inflation rate of unemployment

Question 5

Which of the following actions would reduce frictional unemployment?

Accepted Answer

A)  holding job fairs 
B)  retraining workers to use computers 
C)  taming the business cycle 
D)  subsidizing obsolete technologies 
A)  holding job fairs 
B)  retraining workers to use computers 
C)  taming the business cycle 
D)  subsidizing obsolete technologies

Question 6

The general formula for an escalator clause adjustment is: new = original × (original year index / current year index).

Accepted Answer

A) True 
 B)False

Question 7

Which of the following persons is considered part of the labor force?

Accepted Answer

A)  Joe, a senior in high school who works part-time on weekends at the ice cream shop 
B)  Mary, who works as a librarian in prison because she poisoned her cheating boyfriend 
C)  Jamal, who just graduated from college and is backpacking in Europe for six months 
D)  Tessa, an 8-year-old who sells lemonade on the sidewalk for 50 cents a glass 
A)  Joe, a senior in high school who works part-time on weekends at the ice cream shop 
B)  Mary, who works as a librarian in prison because she poisoned her cheating boyfriend 
C)  Jamal, who just graduated from college and is backpacking in Europe for six months 
D)  Tessa, an 8-year-old who sells lemonade on the sidewalk for 50 cents a glass

Question 8

The GDP deflator is a measure of the average change in prices for all goods and services in the economy.

Accepted Answer

A) True 
 B)False

Question 9

The consumer price index is a cost-of-goods measure, not a true cost-of-living measure.

Accepted Answer

A) True 
 B)False

Question 10

Which is NOT a criticism of the official unemployment rate?

Accepted Answer

A)  It excludes marginally attached workers. 
B)  It includes the underemployed. 
C)  It does not include people who want to work but stopped searching out of frustration. 
D)  It is not reported frequently enough to provide a good picture of the state of the economy. 
A)  It excludes marginally attached workers. 
B)  It includes the underemployed. 
C)  It does not include people who want to work but stopped searching out of frustration. 
D)  It is not reported frequently enough to provide a good picture of the state of the economy.

Question 11

The establishment survey interviews households regarding their employment status.

Accepted Answer

A) True 
 B)False

Question 12

The main reason people were unemployed in the United States in 2012 was because they:

Accepted Answer

A)  were new entrants into the labor force. 
B)  were reentrants into the labor force. 
C)  lost their job. 
D)  left their job. 
A)  were new entrants into the labor force. 
B)  were reentrants into the labor force. 
C)  lost their job. 
D)  left their job.

Question 13

Suppose three years ago a nation's inflation rate was 8%, two years ago it was 5%, and last year it was 2%. This nation is undergoing:

Accepted Answer

A)  deflation. 
B)  hyperinflation. 
C)  a drop in its price level. 
D)  disinflation. 
A)  deflation. 
B)  hyperinflation. 
C)  a drop in its price level. 
D)  disinflation.

Question 14

(Table) The associated table provides a hypothetical bundle of goods. If 2014 is selected as the base year, the value of nominal GDP in 2017 would be: $$\begin{array} { | l | c | c | c | c | c | c | } 
\hline \text { Product } & \mathbf { Q } _ { 2010 } & \mathbf { Q } _ { 2014 } & \mathbf { Q } _ { 2017 } & \mathbf { P } _ { 2010 } & \mathbf { P } _ { 2014 } & \mathbf { P } _ { 2017 } \
\hline \text { Apples (5-lb. bag) } & 10 & 11 & 12 & \$ 3.00 & \$ 4.00 & \$ 4.25 \
\hline \text { Coffee beans (1-lb. bag) } & 50 & 50 & 55 & \$ 8.00 & \$ 9.00 & \$ 10.00 \
\hline \text { Cereal (28-oz. box) } & 20 & 25 & 29 & \$ 3.50 & \$ 3.75 & \$ 3.75 \
\hline
\end{array}$$

Accepted Answer

A)  $565.00. 
B)  $500.00. 
C)  $709.75. 
D)  $651.75. 
A)  $565.00. 
B)  $500.00. 
C)  $709.75. 
D)  $651.75.

Question 15

Casey is a 16-year-old high school student who has no marketable skills. He has been browsing the want-ads in the local newspaper for months but finally got so discouraged that he quit looking for a job. According to the Bureau of Labor Statistics, Casey is unemployed.

Accepted Answer

A) True 
 B)False

Question 16

The unemployment rate does not explicitly include underemployed and discouraged workers.

Accepted Answer

A) True 
 B)False

Question 17

The costs of inflation are greater when it is unanticipated.

Accepted Answer

A) True 
 B)False

Question 18

Jennifer did not work during college. She just obtained a bachelor's degree in marketing, and she is now looking for a marketing job in the retail industry. Jennifer is considered:

Accepted Answer

A)  structurally unemployed. 
B)  frictionally unemployed. 
C)  cyclically unemployed. 
D)  not in the labor force. 
A)  structurally unemployed. 
B)  frictionally unemployed. 
C)  cyclically unemployed. 
D)  not in the labor force.

Question 19

The nonaccelerating inflation rate of unemployment does not change over time.

Accepted Answer

A) True 
 B)False

Question 20

If the consumer price index (CPI) says that inflation equaled 10% last year, then the chained CPI for urban consumers is likely to say that inflation equaled 9.7% last year.

Accepted Answer

A) True 
 B)False

_____ is an overall decline in prices throughout the economy.

The unemployment rate is:

The GDP deflator for the base year is:

Which of the following pairs is NOT synonymous?

Which of the following actions would reduce frictional unemployment?

The general formula for an escalator clause adjustment is: new = original × (original year index / current year index).

Which of the following persons is considered part of the labor force?

The GDP deflator is a measure of the average change in prices for all goods and services in the economy.

The consumer price index is a cost-of-goods measure, not a true cost-of-living measure.

Which is NOT a criticism of the official unemployment rate?

The establishment survey interviews households regarding their employment status.

The main reason people were unemployed in the United States in 2012 was because they:

Suppose three years ago a nation's inflation rate was 8%, two years ago it was 5%, and last year it was 2%. This nation is undergoing:

Casey is a 16-year-old high school student who has no marketable skills. He has been browsing the want-ads in the local newspaper for months but finally got so discouraged that he quit looking for a job. According to the Bureau of Labor Statistics, Casey is unemployed.

The unemployment rate does not explicitly include underemployed and discouraged workers.

The costs of inflation are greater when it is unanticipated.

Jennifer did not work during college. She just obtained a bachelor's degree in marketing, and she is now looking for a marketing job in the retail industry. Jennifer is considered:

The nonaccelerating inflation rate of unemployment does not change over time.

If the consumer price index (CPI) says that inflation equaled 10% last year, then the chained CPI for urban consumers is likely to say that inflation equaled 9.7% last year.

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

_____ is an overall decline in prices throughout the economy.

The unemployment rate is:

The GDP deflator for the base year is:

Which of the following pairs is NOT synonymous?

Which of the following actions would reduce frictional unemployment?

The general formula for an escalator clause adjustment is: new = original × (original year index / current year index).

Which of the following persons is considered part of the labor force?

The GDP deflator is a measure of the average change in prices for all goods and services in the economy.

The consumer price index is a cost-of-goods measure, not a true cost-of-living measure.

Which is NOT a criticism of the official unemployment rate?

The establishment survey interviews households regarding their employment status.

The main reason people were unemployed in the United States in 2012 was because they:

Suppose three years ago a nation's inflation rate was 8%, two years ago it was 5%, and last year it was 2%. This nation is undergoing:

Casey is a 16-year-old high school student who has no marketable skills. He has been browsing the want-ads in the local newspaper for months but finally got so discouraged that he quit looking for a job. According to the Bureau of Labor Statistics, Casey is unemployed.

The unemployment rate does not explicitly include underemployed and discouraged workers.

The costs of inflation are greater when it is unanticipated.

Jennifer did not work during college. She just obtained a bachelor's degree in marketing, and she is now looking for a marketing job in the retail industry. Jennifer is considered:

The nonaccelerating inflation rate of unemployment does not change over time.

If the consumer price index (CPI) says that inflation equaled 10% last year, then the chained CPI for urban consumers is likely to say that inflation equaled 9.7% last year.

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