Question 1

When the economy is at full employment the

Accepted Answer

A)  natural unemployment rate is equal to 0 percent. 
B)  natural unemployment rate equals the unemployment rate. 
C)  natural unemployment rate is equal to 10 percent. 
D)  unemployment rate is equal to 0 percent. 
A)  natural unemployment rate is equal to 0 percent. 
B)  natural unemployment rate equals the unemployment rate. 
C)  natural unemployment rate is equal to 10 percent. 
D)  unemployment rate is equal to 0 percent.

Question 2

Auto and steel workers commonly experience this type of unemployment in a recession.

Accepted Answer

A)  frictional unemployment 
B)  cyclical unemployment 
C)  structural unemployment 
D)  natural unemployment rate 
A)  frictional unemployment 
B)  cyclical unemployment 
C)  structural unemployment 
D)  natural unemployment rate

Question 3

As currently calculated, the CPI tends to overstate the true inflation rate because

Accepted Answer

A)  we cannot know what the true inflation rate is. 
B)  it fails to correctly measure quality changes for some products. 
C)  the market basket selected is inappropriate. 
D)  the market basket fails to weigh housing costs sufficiently. 
A)  we cannot know what the true inflation rate is. 
B)  it fails to correctly measure quality changes for some products. 
C)  the market basket selected is inappropriate. 
D)  the market basket fails to weigh housing costs sufficiently.

Question 4

The unemployment rate measures the percentage of

Accepted Answer

A)  people who want full-time jobs, but can't find them. 
B)  the working-age population who can't find a job. 
C)  people in the labor force who can't find a job. 
D)  the working age population that can't find a full-time job. 
A)  people who want full-time jobs, but can't find them. 
B)  the working-age population who can't find a job. 
C)  people in the labor force who can't find a job. 
D)  the working age population that can't find a full-time job.

Question 5

If the Consumer Price Index last year was 110 and 115 this year, the inflation rate is approximately

Accepted Answer

A)  4.5 percent. 
B)  5.0 percent. 
C)  10.0 percent. 
D)  15.0 percent. 
A)  4.5 percent. 
B)  5.0 percent. 
C)  10.0 percent. 
D)  15.0 percent.

Question 6

In a country with a working-age population of 300 million, 230 million workers are employed and 40 million workers are unemployed. What is the labor force participation rate?

Accepted Answer

A)  100 percent 
B)  90 percent 
C)  65 percent 
D)  5 percent 
A)  100 percent 
B)  90 percent 
C)  65 percent 
D)  5 percent

Question 7

The New York Times reported in November 2008 that 240,000 additional people lost their jobs which increased the unemployment rate to 6.5 percent. In addition, it was noted that a large number of college graduates were "taking jobs that do not require a college degree." It was also expected that "teens will be thrown out of the labor market....causing youths to miss experience" that could help them prepare for higher-skilled jobs. The article reflects the idea that unemployment is a problem because it results in

Accepted Answer

A)  a loss of human capital. 
B)  fewer discouraged workers. 
C)  a loss of income. 
D)  a decrease in the labor force. 
A)  a loss of human capital. 
B)  fewer discouraged workers. 
C)  a loss of income. 
D)  a decrease in the labor force.

Question 8

In the United States, the inflation rate has

Accepted Answer

A)  remained almost constant over the past 25 years. 
B)  risen and fallen since the 1970s. 
C)  fallen as a result of OPEC oil price hikes. 
D)  risen constantly over the past 30 years. 
A)  remained almost constant over the past 25 years. 
B)  risen and fallen since the 1970s. 
C)  fallen as a result of OPEC oil price hikes. 
D)  risen constantly over the past 30 years.

Question 9

Suppose the natural unemployment rate equals 6 percent and the current unemployment rate is 8 percent. We can conclude that

Accepted Answer

A)  there is no structural unemployment. 
B)  there is no frictional unemployment. 
C)  there is no cyclical unemployment. 
D)  full employment is not occurring. 
A)  there is no structural unemployment. 
B)  there is no frictional unemployment. 
C)  there is no cyclical unemployment. 
D)  full employment is not occurring.

Question 10

Explain the relationship(s) between full employment, cyclical unemployment, the natural unemployment rate, and potential GDP.

Accepted Answer

The economy is at full employment when t

Question 11

The labor force is defined as the

Accepted Answer

A)  number of employed people plus the number of unemployed people. 
B)  number of people who are working. 
C)  number of people who are working in labor-type jobs. 
D)  number of union members who are working. 
A)  number of employed people plus the number of unemployed people. 
B)  number of people who are working. 
C)  number of people who are working in labor-type jobs. 
D)  number of union members who are working.

Question 12

If last year's price level was 100 and this year's price level is 114, over the year the inflation rate has been

Accepted Answer

A)  14 percent. 
B)  114 percent. 
C)  12 percent 
D)  100 percent. 
A)  14 percent. 
B)  114 percent. 
C)  12 percent 
D)  100 percent.

Question 13

The currently used method for calculating the CPI

Accepted Answer

A)  accounts for people increasing consumption of a good that falls in relative price. 
B)  probably overstates inflation. 
C)  has no effect on government expenditures. 
D)  None of the above answers are correct. 
A)  accounts for people increasing consumption of a good that falls in relative price. 
B)  probably overstates inflation. 
C)  has no effect on government expenditures. 
D)  None of the above answers are correct.

Question 14

Which of the following CORRECTLY describes "frictional unemployment"?

Accepted Answer

A)  Frictional unemployment is due mainly to job losers. 
B)  Frictional unemployment is due mainly to job leavers. 
C)  Frictional unemployment occurs mainly during recessions. 
D)  Frictional unemployment is a normal occurrence in a growing economy. 
A)  Frictional unemployment is due mainly to job losers. 
B)  Frictional unemployment is due mainly to job leavers. 
C)  Frictional unemployment occurs mainly during recessions. 
D)  Frictional unemployment is a normal occurrence in a growing economy.

Question 15

"The new goods bias puts a downward bias into the CPI and its measure of the inflation rate." Is the previous sentence correct or not? Explain your answer.

Accepted Answer

The sentence is false because the new go

Question 16

If the CPI was 132.5 at the end of last year and 137.5 at the end of this year, the inflation rate over these two years was

Accepted Answer

A)  3.6 percent. 
B)  3.8 percent. 
C)  5.0 percent. 
D)  None of the above answers is correct. 
A)  3.6 percent. 
B)  3.8 percent. 
C)  5.0 percent. 
D)  None of the above answers is correct.

Question 17

-Using the information in the table above, calculate the number of people in the labor force.

Accepted Answer

A)  2,500 
B)  2,100 
C)  1,500 
D)  800 
A)  2,500 
B)  2,100 
C)  1,500 
D)  800

Question 18

Cyclical unemployment exists when

Accepted Answer

A)  frictional and structural unemployment is zero. 
B)  real national income exceeds potential income. 
C)  real GDP exceeds potential GDP. 
D)  real GDP is less than potential GDP. 
A)  frictional and structural unemployment is zero. 
B)  real national income exceeds potential income. 
C)  real GDP exceeds potential GDP. 
D)  real GDP is less than potential GDP.

Question 19

Unpredictable changes in the value of money, which brings about gains and losses, are a consequence of unpredictable changes in

Accepted Answer

A)  real GDP. 
B)  unemployment rate. 
C)  inflation. 
D)  productivity. 
A)  real GDP. 
B)  unemployment rate. 
C)  inflation. 
D)  productivity.

Question 20

-In the table above, what inflation rate belongs in space B?

Accepted Answer

A)  17.0 percent 
B)  6.8 percent 
C)  8.3 percent 
D)  -4.0 percent 
A)  17.0 percent 
B)  6.8 percent 
C)  8.3 percent 
D)  -4.0 percent

When the economy is at full employment the

Auto and steel workers commonly experience this type of unemployment in a recession.

As currently calculated, the CPI tends to overstate the true inflation rate because

The unemployment rate measures the percentage of

If the Consumer Price Index last year was 110 and 115 this year, the inflation rate is approximately

In a country with a working-age population of 300 million, 230 million workers are employed and 40 million workers are unemployed. What is the labor force participation rate?

In the United States, the inflation rate has

Suppose the natural unemployment rate equals 6 percent and the current unemployment rate is 8 percent. We can conclude that

Explain the relationship(s) between full employment, cyclical unemployment, the natural unemployment rate, and potential GDP.

The labor force is defined as the

If last year's price level was 100 and this year's price level is 114, over the year the inflation rate has been

The currently used method for calculating the CPI

Which of the following CORRECTLY describes "frictional unemployment"?

"The new goods bias puts a downward bias into the CPI and its measure of the inflation rate." Is the previous sentence correct or not? Explain your answer.

If the CPI was 132.5 at the end of last year and 137.5 at the end of this year, the inflation rate over these two years was

-Using the information in the table above, calculate the number of people in the labor force.

Cyclical unemployment exists when

Unpredictable changes in the value of money, which brings about gains and losses, are a consequence of unpredictable changes in

-In the table above, what inflation rate belongs in space B?

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 5: Monitoring Jobs and Inflation

When the economy is at full employment the

Auto and steel workers commonly experience this type of unemployment in a recession.

As currently calculated, the CPI tends to overstate the true inflation rate because

The unemployment rate measures the percentage of

If the Consumer Price Index last year was 110 and 115 this year, the inflation rate is approximately

In a country with a working-age population of 300 million, 230 million workers are employed and 40 million workers are unemployed. What is the labor force participation rate?

In the United States, the inflation rate has

Suppose the natural unemployment rate equals 6 percent and the current unemployment rate is 8 percent. We can conclude that

Explain the relationship(s) between full employment, cyclical unemployment, the natural unemployment rate, and potential GDP.

The labor force is defined as the

If last year's price level was 100 and this year's price level is 114, over the year the inflation rate has been

The currently used method for calculating the CPI

Which of the following CORRECTLY describes "frictional unemployment"?

"The new goods bias puts a downward bias into the CPI and its measure of the inflation rate." Is the previous sentence correct or not? Explain your answer.

If the CPI was 132.5 at the end of last year and 137.5 at the end of this year, the inflation rate over these two years was

-Using the information in the table above, calculate the number of people in the labor force.

Cyclical unemployment exists when

Unpredictable changes in the value of money, which brings about gains and losses, are a consequence of unpredictable changes in

-In the table above, what inflation rate belongs in space B?

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters