Question 1

Suppose that 1983 is the base year for the Consumer Price Index (CPI) and in 2019 the CPI is 254. What does this "254" mean?

Accepted Answer

A) What cost $100 in 1983 on average cost 254 times as much in 2019. 
B) What cost $100 in 1983 on average cost $254 more in 2019. 
C) What cost $100 in 1983 on average cost 100/254 (or 0.39) times as much in 2019. 
D) What cost $100 in 1983 on average cost $154 more in 2019. 
A) What cost $100 in 1983 on average cost 254 times as much in 2019. 
B) What cost $100 in 1983 on average cost $254 more in 2019. 
C) What cost $100 in 1983 on average cost 100/254 (or 0.39) times as much in 2019. 
D) What cost $100 in 1983 on average cost $154 more in 2019.

Question 2

The answer is "a person employed in the civilian labor force who quits his or her job." The question is:

Accepted Answer

A) Who is a job loser? 
B) Who is an entrant? 
C) Who is a reentrant? 
D) Who is a job leaver? 
E) Who is a discouraged worker? 
A) Who is a job loser? 
B) Who is an entrant? 
C) Who is a reentrant? 
D) Who is a job leaver? 
E) Who is a discouraged worker?

Question 3

If the existing unemployment rate is 3.1 percent and the natural unemployment rate is 4.5 percent, the cyclical unemployment rate is ________ percent.

Accepted Answer

A) 7.6 
B) 3.8 
C) -1.4 
D) 1.4 
A) 7.6 
B) 3.8 
C) -1.4 
D) 1.4

Question 4

​
Exhibit 6-3
​
​
  
-Refer to Exhibit 6-3. Prices changed by ___________ percent between year 3 and year 4.

Accepted Answer

A) 1.6 
B) 2.2 
C) 1.9 
D) 2.3 
E) 3.0 
A) 1.6 
B) 2.2 
C) 1.9 
D) 2.3 
E) 3.0

Question 5

A person in the civilian labor force falls into one of two categories:

Accepted Answer

A) a person who works in a service industry or a person who works in a manufacturing industry. 
B) unemployed or employed. 
C) disemployed or unemployed. 
D) a self-employed worker or a non-self-employed worker. 
A) a person who works in a service industry or a person who works in a manufacturing industry. 
B) unemployed or employed. 
C) disemployed or unemployed. 
D) a self-employed worker or a non-self-employed worker.

Question 6

Some economists believe that because the government ______________ discouraged workers as unemployed, the unemployment rate is biased ________________.

Accepted Answer

A) counts; upward 
B) counts; downward 
C) does not count; upward 
D) does not count; downward 
A) counts; upward 
B) counts; downward 
C) does not count; upward 
D) does not count; downward

Question 7

If the CPI is 220 and nominal income is $37,000, approximately what does real income equal?

Accepted Answer

A) $81,400 
B) $16,818 
C) $76,500 
D) $44,118 
A) $81,400 
B) $16,818 
C) $76,500 
D) $44,118

Question 8

"Full employment" is said to exist when the unemployment rate equals

Accepted Answer

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

Question 9

Describe the terms frictional unemployment, structural unemployment, and cyclical unemployment. Give a hypothetical example of each to help support your answer.

Accepted Answer

Frictional unemployment is created when

Question 10

If the cyclical unemployment rate is negative, then the

Accepted Answer

A) natural unemployment rate is less than the actual unemployment rate in the economy. 
B) natural unemployment rate is greater than the actual unemployment rate in the economy. 
C) structural unemployment rate is greater than the frictional unemployment rate. 
D) structural unemployment rate is less than the frictional unemployment rate. 
E) a and d 
A) natural unemployment rate is less than the actual unemployment rate in the economy. 
B) natural unemployment rate is greater than the actual unemployment rate in the economy. 
C) structural unemployment rate is greater than the frictional unemployment rate. 
D) structural unemployment rate is less than the frictional unemployment rate. 
E) a and d

Question 11

When the unemployment rate is equal to the natural unemployment rate, full employment exists.

Accepted Answer

A) True 
 B)False

Question 12

Marta, who was previously employed, hasn't worked for some time because she was raising her children. When Marta reenters the labor force, the Bureau of Labor Statistics would categorize her as

Accepted Answer

A) a discouraged worker. 
B) an entrant. 
C) a reentrant. 
D) a job loser. 
E) a job leaver. 
A) a discouraged worker. 
B) an entrant. 
C) a reentrant. 
D) a job loser. 
E) a job leaver.

Question 13

Suppose there are 65 million employed persons, 5 million unemployed persons, and 35 million persons not in the labor force. What does the civilian noninstitutional population equal?

Accepted Answer

A) 70 million 
B) 110 million 
C) 65 million 
D) 105 million 
A) 70 million 
B) 110 million 
C) 65 million 
D) 105 million

Question 14

If the Bureau of Labor Statistics considers Jessica to be a discouraged worker, then she is not counted as unemployed for purposes of computing the official unemployment rate.

Accepted Answer

A) True 
 B)False

Question 15

The CPI in the base year is always equal to 100.

Accepted Answer

A) True 
 B)False

Question 16

Assume that Dakota's salary is $49,500, up from $45,000 last year, while the CPI is 198 this year, up from 180 last year. This means that Dakota's real income has ____________ since last year.

Accepted Answer

A) increased 
B) decreased 
C) stayed the same 
D) There is not enough information provided to answer this question. 
A) increased 
B) decreased 
C) stayed the same 
D) There is not enough information provided to answer this question.

Question 17

Which of the following statements is true?

Accepted Answer

A) Base year prices are necessarily higher than current year prices. 
B) The CPI in the base year is always 100. 
C) If the CPI is 112 in year 1 and 123 in year 2, prices have risen by approximately 9.8 percent between the two years. 
D) b and c 
E) a, b, and c 
A) Base year prices are necessarily higher than current year prices. 
B) The CPI in the base year is always 100. 
C) If the CPI is 112 in year 1 and 123 in year 2, prices have risen by approximately 9.8 percent between the two years. 
D) b and c 
E) a, b, and c

Question 18

In year 1 the CPI is 175, and in year 2 the CPI is 189. If Dennis's salary was $82,000 in year 1, what is the minimum salary he must earn in year 2 to "keep up with inflation"?

Accepted Answer

A) $83,550 
B) $92,360 
C) $85,750 
D) $88,560 
A) $83,550 
B) $92,360 
C) $85,750 
D) $88,560

Question 19

Suppose that 1983 is the base year for the Consumer Price Index (CPI) and in 2019 the CPI is 260. What does this "260" mean?

Accepted Answer

A) What cost $100 in 1983 on average cost 2.60 times as much in 2019. 
B) What cost $100 in 1983 on average cost $260 more in 2019. 
C) What cost $100 in 1983 on average cost 0.26 times as much in 2019. 
D) What cost $100 in 1983 on average cost $26 more in 2019. 
A) What cost $100 in 1983 on average cost 2.60 times as much in 2019. 
B) What cost $100 in 1983 on average cost $260 more in 2019. 
C) What cost $100 in 1983 on average cost 0.26 times as much in 2019. 
D) What cost $100 in 1983 on average cost $26 more in 2019.

Question 20

If the CPI was 196.5 in 2005 and 172.2 in 2000, by what percentage did prices rise during the period 2000-2005?

Accepted Answer

A) 0.10 percent 
B) 6.43 percent 
C) 10 percent 
D) 14.1 percent 
A) 0.10 percent 
B) 6.43 percent 
C) 10 percent 
D) 14.1 percent

Exam 6: Macroeconomic Measurements Part I Prices and Unemployment

Suppose that 1983 is the base year for the Consumer Price Index (CPI) and in 2019 the CPI is 254. What does this "254" mean?

The answer is "a person employed in the civilian labor force who quits his or her job." The question is:

If the existing unemployment rate is 3.1 percent and the natural unemployment rate is 4.5 percent, the cyclical unemployment rate is ________ percent.

​ Exhibit 6-3 ​ ​ -Refer to Exhibit 6-3. Prices changed by ___________ percent between year 3 and year 4.

A person in the civilian labor force falls into one of two categories:

Some economists believe that because the government ______________ discouraged workers as unemployed, the unemployment rate is biased ________________.

If the CPI is 220 and nominal income is $37,000, approximately what does real income equal?

"Full employment" is said to exist when the unemployment rate equals

Describe the terms frictional unemployment, structural unemployment, and cyclical unemployment. Give a hypothetical example of each to help support your answer.

If the cyclical unemployment rate is negative, then the

When the unemployment rate is equal to the natural unemployment rate, full employment exists.

Marta, who was previously employed, hasn't worked for some time because she was raising her children. When Marta reenters the labor force, the Bureau of Labor Statistics would categorize her as

Suppose there are 65 million employed persons, 5 million unemployed persons, and 35 million persons not in the labor force. What does the civilian noninstitutional population equal?

If the Bureau of Labor Statistics considers Jessica to be a discouraged worker, then she is not counted as unemployed for purposes of computing the official unemployment rate.

The CPI in the base year is always equal to 100.

Assume that Dakota's salary is $49,500, up from $45,000 last year, while the CPI is 198 this year, up from 180 last year. This means that Dakota's real income has ____________ since last year.

Which of the following statements is true?

In year 1 the CPI is 175, and in year 2 the CPI is 189. If Dennis's salary was $82,000 in year 1, what is the minimum salary he must earn in year 2 to "keep up with inflation"?

Suppose that 1983 is the base year for the Consumer Price Index (CPI) and in 2019 the CPI is 260. What does this "260" mean?

If the CPI was 196.5 in 2005 and 172.2 in 2000, by what percentage did prices rise during the period 2000-2005?

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand Theory

Prices Free Controlled and Relative

Supply Demand and Price Applications

Macroeconomic Measurements Part II Gdp and Real Gdp

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability a Critique of the Self Regulating Economy

Fiscal Policy and the Federal Budget

Money Banking and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth Resources Technology Ideas and Institutions

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition Oligopoly and Game Theory

Government and Product Markets Antitrust and Regulation

Factor Markets With Emphasis on the Labor Market

Wages Unions and Labor

The Distribution of Income and Poverty

Interest Rent and Profit

Market Failure Externalities Public Goods and Asymmetric Information

Public Choice and Special Interest Group Politics

Building Theories to Explain Everyday Life From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government Five Topics Considered

Stocks Bonds Futures and Options

Filters

Exhibit 6-3 -Refer to Exhibit 6-3. Prices changed by ___________ percent between year 3 and year 4.

Some economists believe that because the government discouraged workers as unemployed, the unemployment rate is biased __.