Question 1

_____ unemployment is the result of changes in the business cycle.

Accepted Answer

A)  Structural 
B)  Frictional 
C)  Seasonal 
D)  Cyclical 
A)  Structural 
B)  Frictional 
C)  Seasonal 
D)  Cyclical

Question 2

When an economy has reached a zero unemployment rate, it is said to have reached full employment.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following persons is considered unemployed?

Accepted Answer

A)  Enrique lost his job and has decided to go back to college to finish his degree. 
B)  Sharmila gave birth to a boy and is taking three months of maternity leave from her job. 
C)  Emily has not worked for two months, but still applies for jobs every week. 
D)  All are unemployed. 
A)  Enrique lost his job and has decided to go back to college to finish his degree. 
B)  Sharmila gave birth to a boy and is taking three months of maternity leave from her job. 
C)  Emily has not worked for two months, but still applies for jobs every week. 
D)  All are unemployed.

Question 4

The chained consumer price index (CPI) for urban consumers takes less time to estimate than does the CPI.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  6.7% 
B)  1% 
C)  10% 
D)  11.1% 
A)  6.7% 
B)  1% 
C)  10% 
D)  11.1%

Question 6

People must be actively engaged in a job search to be considered unemployed.

Accepted Answer

A) True 
 B)False

Question 7

Lexie works Monday to Friday from 4 P.M. to 6 P.M. in the after-school program at a local elementary school. She began looking for a full-time job last week and has already scheduled three job interviews. According to the Bureau of Labor Statistics, Lexie is:

Accepted Answer

A)  a discouraged worker. 
B)  unemployed. 
C)  employed. 
D)  not in the labor force. 
A)  a discouraged worker. 
B)  unemployed. 
C)  employed. 
D)  not in the labor force.

Question 8

The numeric level of the natural rate of unemployment is independent of the levels of the frictional and structural unemployment rates.

Accepted Answer

A) True 
 B)False

Question 9

Most economists believe that the consumer price index _____ the rate of inflation.

Accepted Answer

A)  understates 
B)  overstates 
C)  accurately states 
D)  dis-inflates 
A)  understates 
B)  overstates 
C)  accurately states 
D)  dis-inflates

Question 10

The nominal value of wages explains how much a consumer can pay for goods and services.

Accepted Answer

A) True 
 B)False

Question 11

The nonaccelerating inflation rate of unemployment is the unemployment rate associated with ____ inflation and _____ unemployment.

Accepted Answer

A)  high; high 
B)  high; low 
C)  low; high 
D)  low; low 
A)  high; high 
B)  high; low 
C)  low; high 
D)  low; low

Question 12

If nominal GDP is $12.5 trillion for a given year and the GDP deflator for that year is 111, then real GDP is approximately $11.261 trillion.

Accepted Answer

A) True 
 B)False

Question 13

Inflation has significant long-run effects on the economy because:

Accepted Answer

A)  it distorts the price signal and produces incentives for speculation. 
B)  it can enhance the purchasing power of a fixed income. 
C)  it can lead to an improvement in real values. 
D)  creditors can gain from inflation. 
A)  it distorts the price signal and produces incentives for speculation. 
B)  it can enhance the purchasing power of a fixed income. 
C)  it can lead to an improvement in real values. 
D)  creditors can gain from inflation.

Question 14

Which of the following terms describes a situation in which there is a reduction in the rate of inflation from 4% to 3% per year?

Accepted Answer

A)  hyperinflation 
B)  inflation 
C)  deflation 
D)  disinflation 
A)  hyperinflation 
B)  inflation 
C)  deflation 
D)  disinflation

Question 15

Unemployment statistics in the United States are generally used to gauge the state of the economy.

Accepted Answer

A) True 
 B)False

Question 16

Frictional unemployment is primarily related to changes in consumer demand or technology.

Accepted Answer

A) True 
 B)False

Question 17

The costs of cyclical unemployment can be minimized by:

Accepted Answer

A)  providing training for individuals who have lost their jobs and who want a new career. 
B)  providing training for individuals who have a job. 
C)  providing training for new entrants into the labor force. 
D)  keeping the economy on a steady, low-inflationary growth path. 
A)  providing training for individuals who have lost their jobs and who want a new career. 
B)  providing training for individuals who have a job. 
C)  providing training for new entrants into the labor force. 
D)  keeping the economy on a steady, low-inflationary growth path.

Question 18

What is your new salary if you earned $40,000 last year, the consumer price index increased from 120 to 125, and your salary is adjusted by the rate of inflation annually?

Accepted Answer

A)  $38,400 
B)  $41,600 
C)  $41,666.67 
D)  $40,125 
A)  $38,400 
B)  $41,600 
C)  $41,666.67 
D)  $40,125

Question 19

In the 1960s, macroeconomists thought policymakers faced a menu of choices concerning the unemployment rate and the economic growth rate.

Accepted Answer

A) True 
 B)False

Question 20

If the cost of a typical market basket in 2019 is 400 and the cost of a typical market basket in 2020 is 390, then during this period the economy is undergoing:

Accepted Answer

A)  inflation. 
B)  disinflation. 
C)  deflation. 
D)  hyperinflation. 
A)  inflation. 
B)  disinflation. 
C)  deflation. 
D)  hyperinflation.

_____ unemployment is the result of changes in the business cycle.

When an economy has reached a zero unemployment rate, it is said to have reached full employment.

Which of the following persons is considered unemployed?

The chained consumer price index (CPI) for urban consumers takes less time to estimate than does the CPI.

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

People must be actively engaged in a job search to be considered unemployed.

Lexie works Monday to Friday from 4 P.M. to 6 P.M. in the after-school program at a local elementary school. She began looking for a full-time job last week and has already scheduled three job interviews. According to the Bureau of Labor Statistics, Lexie is:

The numeric level of the natural rate of unemployment is independent of the levels of the frictional and structural unemployment rates.

Most economists believe that the consumer price index _____ the rate of inflation.

The nominal value of wages explains how much a consumer can pay for goods and services.

The nonaccelerating inflation rate of unemployment is the unemployment rate associated with inflation and _ unemployment.

If nominal GDP is $12.5 trillion for a given year and the GDP deflator for that year is 111, then real GDP is approximately $11.261 trillion.

Inflation has significant long-run effects on the economy because:

Which of the following terms describes a situation in which there is a reduction in the rate of inflation from 4% to 3% per year?

Unemployment statistics in the United States are generally used to gauge the state of the economy.

Frictional unemployment is primarily related to changes in consumer demand or technology.

The costs of cyclical unemployment can be minimized by:

What is your new salary if you earned $40,000 last year, the consumer price index increased from 120 to 125, and your salary is adjusted by the rate of inflation annually?

In the 1960s, macroeconomists thought policymakers faced a menu of choices concerning the unemployment rate and the economic growth rate.

If the cost of a typical market basket in 2019 is 400 and the cost of a typical market basket in 2020 is 390, then during this period the economy is undergoing:

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

Exam 6: Measuring Inflation and Unemployment

_____ unemployment is the result of changes in the business cycle.

When an economy has reached a zero unemployment rate, it is said to have reached full employment.

Which of the following persons is considered unemployed?

The chained consumer price index (CPI) for urban consumers takes less time to estimate than does the CPI.

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

People must be actively engaged in a job search to be considered unemployed.

Lexie works Monday to Friday from 4 P.M. to 6 P.M. in the after-school program at a local elementary school. She began looking for a full-time job last week and has already scheduled three job interviews. According to the Bureau of Labor Statistics, Lexie is:

The numeric level of the natural rate of unemployment is independent of the levels of the frictional and structural unemployment rates.

Most economists believe that the consumer price index _____ the rate of inflation.

The nominal value of wages explains how much a consumer can pay for goods and services.

The nonaccelerating inflation rate of unemployment is the unemployment rate associated with ____ inflation and _____ unemployment.

If nominal GDP is $12.5 trillion for a given year and the GDP deflator for that year is 111, then real GDP is approximately $11.261 trillion.

Inflation has significant long-run effects on the economy because:

Which of the following terms describes a situation in which there is a reduction in the rate of inflation from 4% to 3% per year?

Unemployment statistics in the United States are generally used to gauge the state of the economy.

Frictional unemployment is primarily related to changes in consumer demand or technology.

The costs of cyclical unemployment can be minimized by:

What is your new salary if you earned $40,000 last year, the consumer price index increased from 120 to 125, and your salary is adjusted by the rate of inflation annually?

In the 1960s, macroeconomists thought policymakers faced a menu of choices concerning the unemployment rate and the economic growth rate.

If the cost of a typical market basket in 2019 is 400 and the cost of a typical market basket in 2020 is 390, then during this period the economy is undergoing:

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

The nonaccelerating inflation rate of unemployment is the unemployment rate associated with inflation and _ unemployment.