Question 1

The absence of cyclical unemployment means the economy is at the natural unemployment rate.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following situations best describes an individual who is cyclically unemployed?

Accepted Answer

A)  Catherine is a ski instructor who is not working because it is summer. 
B)  Matthew was an artillery man, but he has been unable to find work since he left the army. 
C)  Nicholas was laid-off when orders for General Motors cars fell during a recession. 
D)  Susan quit her job as a preschool teacher to try to find a better paying job. 
A)  Catherine is a ski instructor who is not working because it is summer. 
B)  Matthew was an artillery man, but he has been unable to find work since he left the army. 
C)  Nicholas was laid-off when orders for General Motors cars fell during a recession. 
D)  Susan quit her job as a preschool teacher to try to find a better paying job.

Question 3

If the price level last year was 220 and this year is 250, what is the inflation rate between the two years?

Accepted Answer

A)  30 percent 
B)  13.6 percent 
C)  12.2 percent 
D)  20 percent 
A)  30 percent 
B)  13.6 percent 
C)  12.2 percent 
D)  20 percent

Question 4

The unemployment rate is defined as the

Accepted Answer

A)  number of people not working. 
B)  percentage of the population not working. 
C)  percentage of the labor force not working. 
D)  percentage of the working-age population not working. 
A)  number of people not working. 
B)  percentage of the population not working. 
C)  percentage of the labor force not working. 
D)  percentage of the working-age population not working.

Question 5

A discouraged worker ________ counted as officially unemployed and ________ counted as in the labor force.

Accepted Answer

A)  is; is 
B)  is; is not 
C)  is not; is 
D)  is not; is not 
A)  is; is 
B)  is; is not 
C)  is not; is 
D)  is not; is not

Question 6

The table below shows Vietnam's price index between 2004 and 2007.   www.econstats.com
From the data, we can conclude that

Accepted Answer

A)  the inflation rate 2005 and 2006 was 7.5 percent. 
B)  food and energy prices in Vietnam were increasing between 2004 and 2007. 
C)  commodity substitution bias occurred over the four years. 
D)  deflation occurred between 2005 and 2006 as price increased more slowly than in 2004. 
A)  the inflation rate 2005 and 2006 was 7.5 percent. 
B)  food and energy prices in Vietnam were increasing between 2004 and 2007. 
C)  commodity substitution bias occurred over the four years. 
D)  deflation occurred between 2005 and 2006 as price increased more slowly than in 2004.

Question 7

Which of the following individuals is the best example of a structurally unemployed worker?

Accepted Answer

A)  a recent college graduate who has entered the labor force 
B)  an individual who has been laid off from his job because of a business cycle recession 
C)  an automobile worker who has lost her job because of an increase in automobile imports and does not have the skills currently needed by businesses 
D)  an individual who quits one job in the hope of finding a better job 
A)  a recent college graduate who has entered the labor force 
B)  an individual who has been laid off from his job because of a business cycle recession 
C)  an automobile worker who has lost her job because of an increase in automobile imports and does not have the skills currently needed by businesses 
D)  an individual who quits one job in the hope of finding a better job

Question 8

Suppose the Consumer Price Index is 143.6. What does that number mean?

Accepted Answer

A)  On average, goods cost $143.60. 
B)  On average, goods cost $243.60. 
C)  Prices rose 143.6 percent over the reference base period, on average. 
D)  Prices rose 43.6 percent over the reference base period, on average. 
A)  On average, goods cost $143.60. 
B)  On average, goods cost $243.60. 
C)  Prices rose 143.6 percent over the reference base period, on average. 
D)  Prices rose 43.6 percent over the reference base period, on average.

Question 9

-In the table above, the number of people officially unemployed is

Accepted Answer

A)  40 million. 
B)  6 million. 
C)  4 million. 
D)  2 million. 
A)  40 million. 
B)  6 million. 
C)  4 million. 
D)  2 million.

Question 10

When an individual who has not been working but has been looking for work decides to terminate the search process, the official unemployment rate

Accepted Answer

A)  will fall. 
B)  will rise. 
C)  will remain unchanged. 
D)  may fall or rise depending on whether or not the individual resumes his education. 
A)  will fall. 
B)  will rise. 
C)  will remain unchanged. 
D)  may fall or rise depending on whether or not the individual resumes his education.

Question 11

In 2000, you could buy a Cadillac DTS for $45,000. In 2011, the Cadillac DTS sold for $55,000. While both models include anti-lock brakes and air bags (along with other similar features), the 2011 model also includes satellite radio and new technology that provides improved gas mileage and safer driving. If the Cadillac DTS was included in the CPI basket, it would create

Accepted Answer

A)  a downward bias in the inflation rate. 
B)  an upward bias in the CPI as a result of quality change bias. 
C)  an upward bias in the CPI as a result of commodity substitution bias. 
D)  a downward bias in the CPI as a result of new goods bias. 
A)  a downward bias in the inflation rate. 
B)  an upward bias in the CPI as a result of quality change bias. 
C)  an upward bias in the CPI as a result of commodity substitution bias. 
D)  a downward bias in the CPI as a result of new goods bias.

Question 12

Nicholas does not possess marketable job skills; therefore, he is

Accepted Answer

A)  frictionally unemployed. 
B)  structurally unemployed. 
C)  cyclically unemployed. 
D)  seasonally unemployed. 
A)  frictionally unemployed. 
B)  structurally unemployed. 
C)  cyclically unemployed. 
D)  seasonally unemployed.

Question 13

If the basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year, the CPI for the latter year equals

Accepted Answer

A)  200. 
B)  225. 
C)  325. 
D)  450. 
A)  200. 
B)  225. 
C)  325. 
D)  450.

Question 14

In a country with a working-age population of 150 million, 120 million workers are employed and 10 million workers are unemployed. What is the size of the labor force?

Accepted Answer

A)  150 million 
B)  130 million 
C)  120 million 
D)  10 million 
A)  150 million 
B)  130 million 
C)  120 million 
D)  10 million

Question 15

The bias in the CPI typically

Accepted Answer

A)  overstates inflation. 
B)  understates inflation. 
C)  about half the time overstates and about half the time understates the inflation rate. 
D)  cannot be measured or estimated. 
A)  overstates inflation. 
B)  understates inflation. 
C)  about half the time overstates and about half the time understates the inflation rate. 
D)  cannot be measured or estimated.

Question 16

The natural unemployment rate is the unemployment rate that exists when there is no

Accepted Answer

A)  structural unemployment. 
B)  frictional unemployment. 
C)  cyclical unemployment. 
D)  cyclical or structural unemployment. 
A)  structural unemployment. 
B)  frictional unemployment. 
C)  cyclical unemployment. 
D)  cyclical or structural unemployment.

Question 17

The unemployment rate is at the natural unemployment rate when

Accepted Answer

A)  frictional unemployment equals zero. 
B)  structural unemployment equals zero. 
C)  cyclical unemployment equals zero. 
D)  all types of unemployment equal zero. 
A)  frictional unemployment equals zero. 
B)  structural unemployment equals zero. 
C)  cyclical unemployment equals zero. 
D)  all types of unemployment equal zero.

Question 18

The unemployment rate equals

Accepted Answer

A)  (the number of unemployed workers)/(the number of employed + unemployed workers) × 100. 
B)  (the number of unemployed workers)/(the civilian population) × 100. 
C)  (the number of unemployed workers)/(the U.S. population older than 16 years of age) × 100. 
D)  (the number of unemployed + employed workers)/(U.S. population older than 16 years of age) × 100. 
A)  (the number of unemployed workers)/(the number of employed + unemployed workers) × 100. 
B)  (the number of unemployed workers)/(the civilian population) × 100. 
C)  (the number of unemployed workers)/(the U.S. population older than 16 years of age) × 100. 
D)  (the number of unemployed + employed workers)/(U.S. population older than 16 years of age) × 100.

Question 19

The employment-to-population ratio is equal to the number of

Accepted Answer

A)  unemployed people divided by the total population then multiplied by 100. 
B)  employed people divided by the working-age population then multiplied by 100. 
C)  employed people divided by the total population then multiplied by 100. 
D)  unemployed people divided by the working age population then multiplied by 100. 
A)  unemployed people divided by the total population then multiplied by 100. 
B)  employed people divided by the working-age population then multiplied by 100. 
C)  employed people divided by the total population then multiplied by 100. 
D)  unemployed people divided by the working age population then multiplied by 100.

Question 20

Suppose that the number of jobs in the fishing industry decreases but the number of jobs in the travel industry increases. Initially,

Accepted Answer

A)  the economy remains at full employment. 
B)  structural unemployment increases. 
C)  there is a shortage of workers in both sectors. 
D)  cyclical unemployment increases. 
A)  the economy remains at full employment. 
B)  structural unemployment increases. 
C)  there is a shortage of workers in both sectors. 
D)  cyclical unemployment increases.

The absence of cyclical unemployment means the economy is at the natural unemployment rate.

Which of the following situations best describes an individual who is cyclically unemployed?

If the price level last year was 220 and this year is 250, what is the inflation rate between the two years?

The unemployment rate is defined as the

A discouraged worker counted as officially unemployed and counted as in the labor force.

The table below shows Vietnam's price index between 2004 and 2007. www.econstats.com From the data, we can conclude that

Which of the following individuals is the best example of a structurally unemployed worker?

Suppose the Consumer Price Index is 143.6. What does that number mean?

-In the table above, the number of people officially unemployed is

When an individual who has not been working but has been looking for work decides to terminate the search process, the official unemployment rate

Nicholas does not possess marketable job skills; therefore, he is

If the basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year, the CPI for the latter year equals

In a country with a working-age population of 150 million, 120 million workers are employed and 10 million workers are unemployed. What is the size of the labor force?

The bias in the CPI typically

The natural unemployment rate is the unemployment rate that exists when there is no

The unemployment rate is at the natural unemployment rate when

The unemployment rate equals

The employment-to-population ratio is equal to the number of

Suppose that the number of jobs in the fishing industry decreases but the number of jobs in the travel industry increases. Initially,

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

The absence of cyclical unemployment means the economy is at the natural unemployment rate.

Which of the following situations best describes an individual who is cyclically unemployed?

If the price level last year was 220 and this year is 250, what is the inflation rate between the two years?

The unemployment rate is defined as the

A discouraged worker ________ counted as officially unemployed and ________ counted as in the labor force.

The table below shows Vietnam's price index between 2004 and 2007. www.econstats.com From the data, we can conclude that

Which of the following individuals is the best example of a structurally unemployed worker?

Suppose the Consumer Price Index is 143.6. What does that number mean?

-In the table above, the number of people officially unemployed is

When an individual who has not been working but has been looking for work decides to terminate the search process, the official unemployment rate

Nicholas does not possess marketable job skills; therefore, he is

If the basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year, the CPI for the latter year equals

In a country with a working-age population of 150 million, 120 million workers are employed and 10 million workers are unemployed. What is the size of the labor force?

The bias in the CPI typically

The natural unemployment rate is the unemployment rate that exists when there is no

The unemployment rate is at the natural unemployment rate when

The unemployment rate equals

The employment-to-population ratio is equal to the number of

Suppose that the number of jobs in the fishing industry decreases but the number of jobs in the travel industry increases. Initially,

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

A discouraged worker counted as officially unemployed and counted as in the labor force.