Question 1

Which of these is included in the consumer price index?

Accepted Answer

A)  price of bauxite 
B)  price of a hotel room in Beirut, Lebanon 
C)  price of crude oil 
D)  price of gasoline 
A)  price of bauxite 
B)  price of a hotel room in Beirut, Lebanon 
C)  price of crude oil 
D)  price of gasoline

Question 2

(Table) Briefly define the following terms: price level, inflation, disinflation, deflation, and hyperinflation. The following table shows some data on the price level for three years.   Which term best describes the price change from Year 1 to Year 2? From Year 2 to Year 3? Why?

Accepted Answer

The price level is the absolute level of

Question 3

_____ is an index of the average prices for all goods and services in the economy and is the broadest measure of inflation.

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 4

Suppose the unemployment rate is 10% and an economist breaks the unemployment rate into the following components: frictional (3%) and structural (3%). Based on these estimates, the cyclical inflation rate is

Accepted Answer

A)  3%. 
B)  4%. 
C)  5%. 
D)  6%. 
A)  3%. 
B)  4%. 
C)  5%. 
D)  6%.

Question 5

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 6

If the structural unemployment rate is 4%, the frictional unemployment rate is 1%, and the cyclical unemployment rate is 3%, then the natural rate of unemployment is 5%.

Accepted Answer

A) True 
 B)False

Question 7

If nominal GDP and the GDP deflator both rise by 5%, then real GDP is unchanged.

Accepted Answer

A) True 
 B)False

Question 8

The price level is the absolute level of a price index, such as the consumer price index.

Accepted Answer

A) True 
 B)False

Question 9

If Kim's salary was $50,000 last year, and this year she receives a cost-of-living increase tied to the consumer price index (CPI), what will her salary be this year assuming the CPI has risen from 110 to 114?

Accepted Answer

A)  $49,114 
B)  $50,114 
C)  $50,300 
D)  $51,818 
A)  $49,114 
B)  $50,114 
C)  $50,300 
D)  $51,818

Question 10

If the inflation rate decreases from 5% to 3%, the economy is undergoing

Accepted Answer

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

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Full employment is considered to be the equivalent of the natural rate of unemployment.

Accepted Answer

A) True 
 B)False

Question 13

Which item is NOT included in the GDP deflator?

Accepted Answer

A)  bubble gum 
B)  turbines 
C)  fire engines 
D)  imported mangoes 
A)  bubble gum 
B)  turbines 
C)  fire engines 
D)  imported mangoes

Question 14

Why do economists believe that when the producer price index (PPI) rises, there is a good chance that the consumer price index will also rise?

Accepted Answer

Many of the items in the PPI produce rev

Question 15

As a measure of inflation, the media gives more attention to the GDP deflator than the consumer price index.

Accepted Answer

A) True 
 B)False

Question 16

The household survey provides a detailed demographic picture of _____, and the payroll survey provides detailed information _____.

Accepted Answer

A)  consumer spending; about business spending 
B)  consumer spending; by industry and region 
C)  the labor market; about business spending 
D)  the labor market; by industry and region 
A)  consumer spending; about business spending 
B)  consumer spending; by industry and region 
C)  the labor market; about business spending 
D)  the labor market; by industry and region

Question 17

Cyclical unemployment occurs when

Accepted Answer

A)  workers are fired. 
B)  workers quit their jobs to raise a family. 
C)  the economy slows down, and workers are laid off. 
D)  workers retire earlier than age 66. 
A)  workers are fired. 
B)  workers quit their jobs to raise a family. 
C)  the economy slows down, and workers are laid off. 
D)  workers retire earlier than age 66.

Question 18

With everything else held constant, if 5% of those considered to be frictionally unemployed found work while the number of people considered to be structurally unemployed increased by 5%, the natural rate of unemployment

Accepted Answer

A)  increases by 10%. 
B)  decreases by 10%. 
C)  equals the unemployment rate. 
D)  does not change. 
A)  increases by 10%. 
B)  decreases by 10%. 
C)  equals the unemployment rate. 
D)  does not change.

Question 19

People are counted as unemployed if they only held temporary jobs during the survey week.

Accepted Answer

A) True 
 B)False

Question 20

Which of these would NOT cause inflation in the United States?

Accepted Answer

A)  The Great Plains experiences a severe drought. 
B)  The stock market reaches new highs. 
C)  Severe flooding ruins crops throughout the Midwest. 
D)  The federal government runs a budget surplus. 
A)  The Great Plains experiences a severe drought. 
B)  The stock market reaches new highs. 
C)  Severe flooding ruins crops throughout the Midwest. 
D)  The federal government runs a budget surplus.

Which of these is included in the consumer price index?

(Table) Briefly define the following terms: price level, inflation, disinflation, deflation, and hyperinflation. The following table shows some data on the price level for three years. Which term best describes the price change from Year 1 to Year 2? From Year 2 to Year 3? Why?

_____ is an index of the average prices for all goods and services in the economy and is the broadest measure of inflation.

Suppose the unemployment rate is 10% and an economist breaks the unemployment rate into the following components: frictional (3%) and structural (3%). Based on these estimates, the cyclical inflation rate is

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

If the structural unemployment rate is 4%, the frictional unemployment rate is 1%, and the cyclical unemployment rate is 3%, then the natural rate of unemployment is 5%.

If nominal GDP and the GDP deflator both rise by 5%, then real GDP is unchanged.

The price level is the absolute level of a price index, such as the consumer price index.

If Kim's salary was $50,000 last year, and this year she receives a cost-of-living increase tied to the consumer price index (CPI), what will her salary be this year assuming the CPI has risen from 110 to 114?

If the inflation rate decreases from 5% to 3%, the economy is undergoing

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

Full employment is considered to be the equivalent of the natural rate of unemployment.

Which item is NOT included in the GDP deflator?

Why do economists believe that when the producer price index (PPI) rises, there is a good chance that the consumer price index will also rise?

As a measure of inflation, the media gives more attention to the GDP deflator than the consumer price index.

The household survey provides a detailed demographic picture of _, and the payroll survey provides detailed information _.

Cyclical unemployment occurs when

With everything else held constant, if 5% of those considered to be frictionally unemployed found work while the number of people considered to be structurally unemployed increased by 5%, the natural rate of unemployment

People are counted as unemployed if they only held temporary jobs during the survey week.

Which of these would NOT cause inflation in the United States?

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Economic Growth

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Aggregate Demand and Supply

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Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

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Exam 6: Measuring Inflation and Unemployment

Which of these is included in the consumer price index?

(Table) Briefly define the following terms: price level, inflation, disinflation, deflation, and hyperinflation. The following table shows some data on the price level for three years. Which term best describes the price change from Year 1 to Year 2? From Year 2 to Year 3? Why?

_____ is an index of the average prices for all goods and services in the economy and is the broadest measure of inflation.

Suppose the unemployment rate is 10% and an economist breaks the unemployment rate into the following components: frictional (3%) and structural (3%). Based on these estimates, the cyclical inflation rate is

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

If the structural unemployment rate is 4%, the frictional unemployment rate is 1%, and the cyclical unemployment rate is 3%, then the natural rate of unemployment is 5%.

If nominal GDP and the GDP deflator both rise by 5%, then real GDP is unchanged.

The price level is the absolute level of a price index, such as the consumer price index.

If Kim's salary was $50,000 last year, and this year she receives a cost-of-living increase tied to the consumer price index (CPI), what will her salary be this year assuming the CPI has risen from 110 to 114?

If the inflation rate decreases from 5% to 3%, the economy is undergoing

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

Full employment is considered to be the equivalent of the natural rate of unemployment.

Which item is NOT included in the GDP deflator?

Why do economists believe that when the producer price index (PPI) rises, there is a good chance that the consumer price index will also rise?

As a measure of inflation, the media gives more attention to the GDP deflator than the consumer price index.

The household survey provides a detailed demographic picture of _____, and the payroll survey provides detailed information _____.

Cyclical unemployment occurs when

With everything else held constant, if 5% of those considered to be frictionally unemployed found work while the number of people considered to be structurally unemployed increased by 5%, the natural rate of unemployment

People are counted as unemployed if they only held temporary jobs during the survey week.

Which of these would NOT cause inflation in the United States?

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 household survey provides a detailed demographic picture of _, and the payroll survey provides detailed information _.