Question 1

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 2

Which group benefits from an unanticipated rise in the inflation rate?

Accepted Answer

A)  homeowners with fixed-rate mortgages 
B)  senior citizens living on a fixed income 
C)  creditors or lenders 
D)  workers on contracts without escalator clauses 
A)  homeowners with fixed-rate mortgages 
B)  senior citizens living on a fixed income 
C)  creditors or lenders 
D)  workers on contracts without escalator clauses

Question 3

What is inflation? Provide an example describing how inflation hurts an economy.

Accepted Answer

Inflation is a general rise in prices th

Question 4

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 5

New entrants into the labor force constitute the largest segment of the unemployed.

Accepted Answer

A) True 
 B)False

Question 6

Last year, the consumer price index was 115 while the consumer price index for this year is 125. The rate of inflation is

Accepted Answer

A)  8%. 
B)  8.7%. 
C)  9.2%. 
D)  10.8%. 
A)  8%. 
B)  8.7%. 
C)  9.2%. 
D)  10.8%.

Question 7

Which group is helped by inflation?

Accepted Answer

A)  senior citizens on a fixed income 
B)  debtors 
C)  restaurant owners who must reprint menus 
D)  creditors 
A)  senior citizens on a fixed income 
B)  debtors 
C)  restaurant owners who must reprint menus 
D)  creditors

Question 8

Minimum wage laws and union bargaining help workers who are employed to earn more, but contribute to frictional unemployment.

Accepted Answer

A) True 
 B)False

Question 9

Which statement is INCORRECT?

Accepted Answer

A)  The natural rate of unemployment is generally considered the equivalent of full employment. 
B)  The natural rate of unemployment consists of only frictional unemployment or structural unemployment. 
C)  The natural rate of unemployment is the level at which inflationary pressures in the economy are at their maximum. 
D)  The natural rate of unemployment is when cyclical unemployment is zero. 
A)  The natural rate of unemployment is generally considered the equivalent of full employment. 
B)  The natural rate of unemployment consists of only frictional unemployment or structural unemployment. 
C)  The natural rate of unemployment is the level at which inflationary pressures in the economy are at their maximum. 
D)  The natural rate of unemployment is when cyclical unemployment is zero.

Question 10

With everything else held constant, if society increased the efficiency of matching people to jobs that need their skills, the natural rate of unemployment would likely

Accepted Answer

A)  increase. 
B)  decrease. 
C)  increase or decrease, as there is not enough information to determine the answer. 
D)  not change. 
A)  increase. 
B)  decrease. 
C)  increase or decrease, as there is not enough information to determine the answer. 
D)  not change.

Question 11

The biggest group missing from the reported unemployment rate is

Accepted Answer

A)  discouraged workers. 
B)  marginally attached workers. 
C)  those working part time for economic reasons. 
D)  those actively seeking work. 
A)  discouraged workers. 
B)  marginally attached workers. 
C)  those working part time for economic reasons. 
D)  those actively seeking work.

Question 12

What are some problems with the unemployment statistics used in the United States?

Accepted Answer

Trying to measure personal situations as

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Last year, Megan's salary was $65,000 while the consumer price index increased from 109 to 115. If Megan received a cost-of-living adjustment, what would her salary be?

Accepted Answer

A)  $61,320 
B)  $61,553 
C)  $67,564 
D)  $68,578 
A)  $61,320 
B)  $61,553 
C)  $67,564 
D)  $68,578

Question 16

Which term 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 17

(Table) The associated table provides a hypothetical bundle of goods. If 2014 is the base year, the value of the CPI in 2017 would be

Accepted Answer

A)  88.50. 
B)  100. 
C)  105. 
D)  108.97. 
A)  88.50. 
B)  100. 
C)  105. 
D)  108.97.

Question 18

The labor force is defined as the

Accepted Answer

A)  total number of those employed. 
B)  total number of the employed and unemployed. 
C)  total population less the number unemployed. 
D)  number of workers seeking a paid job. 
A)  total number of those employed. 
B)  total number of the employed and unemployed. 
C)  total population less the number unemployed. 
D)  number of workers seeking a paid job.

Question 19

When the Bureau of Labor Statistics calculates the consumer price index, it assumes that

Accepted Answer

A)  each consumer maximizes his or her utility. 
B)  consumers do not substitute cheaper goods for goods when prices have risen. 
C)  consumers overspend. 
D)  there is no unemployment. 
A)  each consumer maximizes his or her utility. 
B)  consumers do not substitute cheaper goods for goods when prices have risen. 
C)  consumers overspend. 
D)  there is no unemployment.

Question 20

Dylan quits his job in Topeka, Kansas, and moves to Austin, Texas, to get involved in live music. He is unemployed for three months while he looks for a new job. Dylan is frictionally unemployed.

Accepted Answer

A) True 
 B)False

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

Which group benefits from an unanticipated rise in the inflation rate?

What is inflation? Provide an example describing how inflation hurts an economy.

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

New entrants into the labor force constitute the largest segment of the unemployed.

Last year, the consumer price index was 115 while the consumer price index for this year is 125. The rate of inflation is

Which group is helped by inflation?

Minimum wage laws and union bargaining help workers who are employed to earn more, but contribute to frictional unemployment.

Which statement is INCORRECT?

With everything else held constant, if society increased the efficiency of matching people to jobs that need their skills, the natural rate of unemployment would likely

The biggest group missing from the reported unemployment rate is

What are some problems with the unemployment statistics used in the United States?

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

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

Last year, Megan's salary was $65,000 while the consumer price index increased from 109 to 115. If Megan received a cost-of-living adjustment, what would her salary be?

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

(Table) The associated table provides a hypothetical bundle of goods. If 2014 is the base year, the value of the CPI in 2017 would be

The labor force is defined as the

When the Bureau of Labor Statistics calculates the consumer price index, it assumes that

Dylan quits his job in Topeka, Kansas, and moves to Austin, Texas, to get involved in live music. He is unemployed for three months while he looks for a new job. Dylan is frictionally unemployed.

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

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

Which group benefits from an unanticipated rise in the inflation rate?

What is inflation? Provide an example describing how inflation hurts an economy.

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

New entrants into the labor force constitute the largest segment of the unemployed.

Last year, the consumer price index was 115 while the consumer price index for this year is 125. The rate of inflation is

Which group is helped by inflation?

Minimum wage laws and union bargaining help workers who are employed to earn more, but contribute to frictional unemployment.

Which statement is INCORRECT?

With everything else held constant, if society increased the efficiency of matching people to jobs that need their skills, the natural rate of unemployment would likely

The biggest group missing from the reported unemployment rate is

What are some problems with the unemployment statistics used in the United States?

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

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

Last year, Megan's salary was $65,000 while the consumer price index increased from 109 to 115. If Megan received a cost-of-living adjustment, what would her salary be?

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

(Table) The associated table provides a hypothetical bundle of goods. If 2014 is the base year, the value of the CPI in 2017 would be

The labor force is defined as the

When the Bureau of Labor Statistics calculates the consumer price index, it assumes that

Dylan quits his job in Topeka, Kansas, and moves to Austin, Texas, to get involved in live music. He is unemployed for three months while he looks for a new job. Dylan is frictionally unemployed.

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