Question 1

The consumer price index measures both private goods and services and public goods and services.

Accepted Answer

A) True 
 B)False

Question 2

Most economists define hyperinflation as an inflation rate greater than _____ a year.

Accepted Answer

A)  10% 
B)  50% 
C)  100% 
D)  1,000% 
A)  10% 
B)  50% 
C)  100% 
D)  1,000%

Question 3

Which statement is/are true? I. If cyclical unemployment is 0%, then the unemployment rate equals the natural rate of unemployment.
II) The unemployment rate consists of only frictional unemployment or structural unemployment.
III) An unemployment rate of zero percent is generally considered the equivalent of full employment.

Accepted Answer

A)  I only 
B)  II only 
C)  II and III only 
D)  I, II, and III 
A)  I only 
B)  II only 
C)  II and III only 
D)  I, II, and III

Question 4

Jennifer did not work during college. She just obtained a bachelor's degree in marketing, and 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 5

For the purposes of calculating the unemployment rate, part-time workers are not counted as employed.

Accepted Answer

A) True 
 B)False

Question 6

What is real GDP in 2010 dollars if nominal GDP in 2014 is $15,000 billion; the GDP deflator in 2014 is 110; and the GDP deflator in 2010 was 100?

Accepted Answer

A)  $9,100 billion 
B)  $13,636 billion 
C)  $14,010 billion 
D)  $16,500 billion 
A)  $9,100 billion 
B)  $13,636 billion 
C)  $14,010 billion 
D)  $16,500 billion

Question 7

(Table) According to the table, nominal GDP for 2013 is approximately

Accepted Answer

A)  $5,050 billion. 
B)  $5,250 billion. 
C)  $5,450 billion. 
D)  $5,650 billion. 
A)  $5,050 billion. 
B)  $5,250 billion. 
C)  $5,450 billion. 
D)  $5,650 billion.

Question 8

Most economists agree that _____ unemployment is the area in which public policymakers can have their greatest impact.

Accepted Answer

A)  structural 
B)  frictional 
C)  seasonal 
D)  cyclical 
A)  structural 
B)  frictional 
C)  seasonal 
D)  cyclical

Question 9

Which statement is NOT correct?

Accepted Answer

A)  Discouraged workers have stopped actively seeking work. 
B)  Discouraged workers are not classified as unemployed. 
C)  Discouraged workers are considered underemployed. 
D)  Discouraged workers are considered part of the leisure class and not part of the labor force. 
A)  Discouraged workers have stopped actively seeking work. 
B)  Discouraged workers are not classified as unemployed. 
C)  Discouraged workers are considered underemployed. 
D)  Discouraged workers are considered part of the leisure class and not part of the labor force.

Question 10

(Table) According to the table, if 50 discouraged workers suddenly decide to start actively seeking employment again, what will be the unemployment rate of this economy?

Accepted Answer

A)  10% 
B)  14.3% 
C)  16.67% 
D)  25% 
A)  10% 
B)  14.3% 
C)  16.67% 
D)  25%

Question 11

The current consumer price index is

Accepted Answer

A)  a cost-of-goods index. 
B)  a true cost-of-living measure. 
C)  based on a changing bundle of goods and services from one period to the next. 
D)  calculated by dividing the market basket's cost in the base period by its cost in the current period. 
A)  a cost-of-goods index. 
B)  a true cost-of-living measure. 
C)  based on a changing bundle of goods and services from one period to the next. 
D)  calculated by dividing the market basket's cost in the base period by its cost in the current period.

Question 12

A cost-of-living index measures the amount of expenditures needed to maintain a certain standard of living, while a cost-of-goods index measures the amount of expenditures needed to purchase a given basket of goods.

Accepted Answer

A) True 
 B)False

Question 13

The time it takes for the unemployment rate to return to the nonaccelerating inflation rate of unemployment will vary.

Accepted Answer

A) True 
 B)False

Question 14

When an economy is going through disinflation, prices

Accepted Answer

A)  are falling. 
B)  fall back to their original levels. 
C)  stop rising. 
D)  are rising but at a declining rate. 
A)  are falling. 
B)  fall back to their original levels. 
C)  stop rising. 
D)  are rising but at a declining rate.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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 17

If an employer uses an escalator clause to determine an employee's raise each year, in an inflationary environment, the employer is more likely than the employee to want to use the personal consumption expenditures price index in this clause.

Accepted Answer

A) True 
 B)False

Question 18

During the 1970s, when handheld calculators became popular and replaced slide rules in performing computations, workers in the slide rule industry lost their jobs. These workers' unemployment status is

Accepted Answer

A)  frictional. 
B)  cyclical. 
C)  structural. 
D)  natural. 
A)  frictional. 
B)  cyclical. 
C)  structural. 
D)  natural.

Question 19

Structural and cyclical unemployment are unavoidable; therefore, the economy is in full employment when frictional unemployment is zero.

Accepted Answer

A) True 
 B)False

Question 20

Inflation is a

Accepted Answer

A)  steady rise in the unemployment rate across the labor market. 
B)  general rise in interest rates. 
C)  decline in confidence in prices. 
D)  general rise in prices. 
A)  steady rise in the unemployment rate across the labor market. 
B)  general rise in interest rates. 
C)  decline in confidence in prices. 
D)  general rise in prices.

The consumer price index measures both private goods and services and public goods and services.

Most economists define hyperinflation as an inflation rate greater than _____ a year.

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

For the purposes of calculating the unemployment rate, part-time workers are not counted as employed.

What is real GDP in 2010 dollars if nominal GDP in 2014 is $15,000 billion; the GDP deflator in 2014 is 110; and the GDP deflator in 2010 was 100?

(Table) According to the table, nominal GDP for 2013 is approximately

Most economists agree that _____ unemployment is the area in which public policymakers can have their greatest impact.

Which statement is NOT correct?

(Table) According to the table, if 50 discouraged workers suddenly decide to start actively seeking employment again, what will be the unemployment rate of this economy?

The current consumer price index is

A cost-of-living index measures the amount of expenditures needed to maintain a certain standard of living, while a cost-of-goods index measures the amount of expenditures needed to purchase a given basket of goods.

The time it takes for the unemployment rate to return to the nonaccelerating inflation rate of unemployment will vary.

When an economy is going through disinflation, prices

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

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.

If an employer uses an escalator clause to determine an employee's raise each year, in an inflationary environment, the employer is more likely than the employee to want to use the personal consumption expenditures price index in this clause.

During the 1970s, when handheld calculators became popular and replaced slide rules in performing computations, workers in the slide rule industry lost their jobs. These workers' unemployment status is

Structural and cyclical unemployment are unavoidable; therefore, the economy is in full employment when frictional unemployment is zero.

Inflation is a

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

The consumer price index measures both private goods and services and public goods and services.

Most economists define hyperinflation as an inflation rate greater than _____ a year.

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

For the purposes of calculating the unemployment rate, part-time workers are not counted as employed.

What is real GDP in 2010 dollars if nominal GDP in 2014 is $15,000 billion; the GDP deflator in 2014 is 110; and the GDP deflator in 2010 was 100?

(Table) According to the table, nominal GDP for 2013 is approximately

Most economists agree that _____ unemployment is the area in which public policymakers can have their greatest impact.

Which statement is NOT correct?

(Table) According to the table, if 50 discouraged workers suddenly decide to start actively seeking employment again, what will be the unemployment rate of this economy?

The current consumer price index is

A cost-of-living index measures the amount of expenditures needed to maintain a certain standard of living, while a cost-of-goods index measures the amount of expenditures needed to purchase a given basket of goods.

The time it takes for the unemployment rate to return to the nonaccelerating inflation rate of unemployment will vary.

When an economy is going through disinflation, prices

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

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.

If an employer uses an escalator clause to determine an employee's raise each year, in an inflationary environment, the employer is more likely than the employee to want to use the personal consumption expenditures price index in this clause.

During the 1970s, when handheld calculators became popular and replaced slide rules in performing computations, workers in the slide rule industry lost their jobs. These workers' unemployment status is

Structural and cyclical unemployment are unavoidable; therefore, the economy is in full employment when frictional unemployment is zero.

Inflation is a

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