Question 1

If actual unemployment is at its natural rate:

Accepted Answer

A)  inflation is very low. 
B)  there is deflation. 
C)  the unemployment rate is zero. 
D)  interest rates are rising. 
A)  inflation is very low. 
B)  there is deflation. 
C)  the unemployment rate is zero. 
D)  interest rates are rising.

Question 2

(Table) According to the table, the unemployment rate is: $$\begin{array} { l c } 
\text { Population } & 210 \
\text { Military } & 30 \
\text { Employed } & 100 \
\text { Unemployed seeking work } & 30 \
\text { Discouraged workers } & 20 \
\text { Unpaid family members working 15-plus hours } & 10 \
\text { Retired } & 20
\end{array}$$

Accepted Answer

A)  14.29%. 
B)  30.00%. 
C)  20.00%. 
D)  21.43%. 
A)  14.29%. 
B)  30.00%. 
C)  20.00%. 
D)  21.43%.

Question 3

The consumer price index is a cost-of-living index.

Accepted Answer

A) True 
 B)False

Question 4

(Table) The associated table provides a hypothetical bundle of goods. If 2014 is selected as the base year, the value of the GDP deflator 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)  100.00. 
B)  108.90. 
C)  88.50. 
D)  105.00. 
A)  100.00. 
B)  108.90. 
C)  88.50. 
D)  105.00.

Question 5

Tom is living with his parents. He looks at the help wanted ads but has not replied to any in the past four weeks. Tom is:

Accepted Answer

A)  unemployed. 
B)  not in the labor force. 
C)  temporarily in the labor force. 
D)  near-employed. 
A)  unemployed. 
B)  not in the labor force. 
C)  temporarily in the labor force. 
D)  near-employed.

Question 6

Hannah is not at work because she broke her leg, but she will return once it heals. She is:

Accepted Answer

A)  unemployed. 
B)  in the labor force. 
C)  temporarily unemployed. 
D)  part-time employed. 
A)  unemployed. 
B)  in the labor force. 
C)  temporarily unemployed. 
D)  part-time employed.

Question 7

In the first quarter of 2010, nominal GDP was $14,592.3 billion and the GDP deflator was 110.2. Real GDP for the first quarter of 2010, then, was equal to:

Accepted Answer

A)  $13,133.1 billion. 
B)  $13,241.7 billion. 
C)  $13,103.9 billion. 
D)  $13,424.9 billion. 
A)  $13,133.1 billion. 
B)  $13,241.7 billion. 
C)  $13,103.9 billion. 
D)  $13,424.9 billion.

Question 8

The price of feed corn would be included in the:

Accepted Answer

A)  consumer price index. 
B)  personal consumption expenditures price index. 
C)  producer price index. 
D)  core consumer price index. 
A)  consumer price index. 
B)  personal consumption expenditures price index. 
C)  producer price index. 
D)  core consumer price index.

Question 9

If the price index is 200, how much did a $12 pizza (today) cost in the base year?

Accepted Answer

A)  $1.20 
B)  $3.00 
C)  $6.00 
D)  $24.00 
A)  $1.20 
B)  $3.00 
C)  $6.00 
D)  $24.00

Question 10

Suppose Robert has a wage contract subject to an escalator clause. He earned $22 per hour last year. In the same year, the consumer price index rose from 120.0 to 126.0. Based on the given information, what should his new wage be?

Accepted Answer

A)  $24 per hour 
B)  $23.10 per hour 
C)  $24.40 per hour 
D)  $22.50 per hour 
A)  $24 per hour 
B)  $23.10 per hour 
C)  $24.40 per hour 
D)  $22.50 per hour

Question 11

Which of the following is NOT generally considered a problem with using the consumer price index to measure consumer prices?

Accepted Answer

A)  Only private goods are considered and public goods are excluded. 
B)  Many federal benefits and income tax rates are indexed to the consumer price index. 
C)  Quality improvements are difficult to account for. 
D)  New products are often overlooked. 
A)  Only private goods are considered and public goods are excluded. 
B)  Many federal benefits and income tax rates are indexed to the consumer price index. 
C)  Quality improvements are difficult to account for. 
D)  New products are often overlooked.

Question 12

John expects to get a raise equal to the increase in the consumer price index (CPI). The CPI has gone from 160 to 164. If John's salary last year was $50,000, what salary does he expect to earn this year?

Accepted Answer

A)  $51,250 
B)  $48,750 
C)  $52,220 
D)  $52,250 
A)  $51,250 
B)  $48,750 
C)  $52,220 
D)  $52,250

Question 13

In the United States, if an individual has stopped actively seeking work, he or she is considered to be unemployed.

Accepted Answer

A) True 
 B)False

Question 14

If frictional unemployment is 2%, structural unemployment is 3%, and cyclical unemployment is 4%, the natural rate of unemployment is:

Accepted Answer

A)  2%. 
B)  5%. 
C)  7%. 
D)  9%. 
A)  2%. 
B)  5%. 
C)  7%. 
D)  9%.

Question 15

Excessive government spending and printing new money are signs that the economy is in danger of hyperinflation.

Accepted Answer

A) True 
 B)False

Question 16

People who are considered unemployed include:

Accepted Answer

A)  those who are doing temporary work. 
B)  those who are unpaid family workers. 
C)  those who do not have a job and are not actively seeking employment. 
D)  None of those listed is considered unemployed. 
A)  those who are doing temporary work. 
B)  those who are unpaid family workers. 
C)  those who do not have a job and are not actively seeking employment. 
D)  None of those listed is considered unemployed.

Question 17

(Table) According to the table, real GDP for 2014 is approximately: $$\begin{array} { | l | c | r | r | } 
\hline & \mathbf { 2 0 1 2 } & \mathbf { 2 0 1 3 } & \mathbf { 2 0 1 4 } \
\hline \text { Nominal GDP (billions of \$) } & \$ 2,291 & & \$ 8,511 \
\hline \text { Real GDP (billions of \$) } & \$ 4,500 & \$ 5,865 & \
\hline \text { GDP Deflator } & & 86.1 & 112.7 \
\hline
\end{array}$$

Accepted Answer

A)  $6,552 billion. 
B)  $7,052 billion. 
C)  $7,552 billion. 
D)  $8,052 billion. 
A)  $6,552 billion. 
B)  $7,052 billion. 
C)  $7,552 billion. 
D)  $8,052 billion.

Question 18

_____ is a measure of the change in average prices paid by urban consumers for a typical market basket of goods and services.

Accepted Answer

A)  The consumer price index 
B)  The producer price index 
C)  Personal consumption expenditure 
D)  The GDP deflator 
A)  The consumer price index 
B)  The producer price index 
C)  Personal consumption expenditure 
D)  The GDP deflator

Question 19

Full employment is typically defined as the level at which cyclical unemployment is zero or at the level associated with a low, nonaccelerating inflation rate.

Accepted Answer

A) True 
 B)False

Question 20

Jasmine works in her family's boutique 16 hours a week and is considered an unpaid family member. Since she is not paid for her services, she is not in the labor force.

Accepted Answer

A) True 
 B)False

If actual unemployment is at its natural rate:

(Table) According to the table, the unemployment rate is: Population 210 Military 30 Employed 100 Unemployed seeking work 30 Discouraged workers 20 Unpaid family members working 15-plus hours 10 Retired 20

The consumer price index is a cost-of-living index.

Tom is living with his parents. He looks at the help wanted ads but has not replied to any in the past four weeks. Tom is:

Hannah is not at work because she broke her leg, but she will return once it heals. She is:

In the first quarter of 2010, nominal GDP was $14,592.3 billion and the GDP deflator was 110.2. Real GDP for the first quarter of 2010, then, was equal to:

The price of feed corn would be included in the:

If the price index is 200, how much did a $12 pizza (today) cost in the base year?

Suppose Robert has a wage contract subject to an escalator clause. He earned $22 per hour last year. In the same year, the consumer price index rose from 120.0 to 126.0. Based on the given information, what should his new wage be?

Which of the following is NOT generally considered a problem with using the consumer price index to measure consumer prices?

John expects to get a raise equal to the increase in the consumer price index (CPI). The CPI has gone from 160 to 164. If John's salary last year was $50,000, what salary does he expect to earn this year?

In the United States, if an individual has stopped actively seeking work, he or she is considered to be unemployed.

If frictional unemployment is 2%, structural unemployment is 3%, and cyclical unemployment is 4%, the natural rate of unemployment is:

Excessive government spending and printing new money are signs that the economy is in danger of hyperinflation.

People who are considered unemployed include:

_____ is a measure of the change in average prices paid by urban consumers for a typical market basket of goods and services.

Full employment is typically defined as the level at which cyclical unemployment is zero or at the level associated with a low, nonaccelerating inflation rate.

Jasmine works in her family's boutique 16 hours a week and is considered an unpaid family member. Since she is not paid for her services, she is not in the labor force.

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

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Introduction to Macroeconomics

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Aggregate Demand and Supply

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Money Creation and the Federal Reserve

Monetary Policy

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Exam 6: Measuring Inflation and Unemployment

If actual unemployment is at its natural rate:

(Table) According to the table, the unemployment rate is: Population 210 Military 30 Employed 100 Unemployed seeking work 30 Discouraged workers 20 Unpaid family members working 15-plus hours 10 Retired 20

The consumer price index is a cost-of-living index.

Tom is living with his parents. He looks at the help wanted ads but has not replied to any in the past four weeks. Tom is:

Hannah is not at work because she broke her leg, but she will return once it heals. She is:

In the first quarter of 2010, nominal GDP was $14,592.3 billion and the GDP deflator was 110.2. Real GDP for the first quarter of 2010, then, was equal to:

The price of feed corn would be included in the:

If the price index is 200, how much did a $12 pizza (today) cost in the base year?

Suppose Robert has a wage contract subject to an escalator clause. He earned $22 per hour last year. In the same year, the consumer price index rose from 120.0 to 126.0. Based on the given information, what should his new wage be?

Which of the following is NOT generally considered a problem with using the consumer price index to measure consumer prices?

John expects to get a raise equal to the increase in the consumer price index (CPI). The CPI has gone from 160 to 164. If John's salary last year was $50,000, what salary does he expect to earn this year?

In the United States, if an individual has stopped actively seeking work, he or she is considered to be unemployed.

If frictional unemployment is 2%, structural unemployment is 3%, and cyclical unemployment is 4%, the natural rate of unemployment is:

Excessive government spending and printing new money are signs that the economy is in danger of hyperinflation.

People who are considered unemployed include:

_____ is a measure of the change in average prices paid by urban consumers for a typical market basket of goods and services.

Full employment is typically defined as the level at which cyclical unemployment is zero or at the level associated with a low, nonaccelerating inflation rate.

Jasmine works in her family's boutique 16 hours a week and is considered an unpaid family member. Since she is not paid for her services, she is not in the labor force.

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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