Question 1

Which one of the following people is frictionally unemployed? A steel worker who

Accepted Answer

A) loses her job because of technological change. 
B) is laid off but expects to be called back soon. 
C) gives up her job because she retires. 
D) decides to leave the labour force and become a full-time student. 
E) becomes discouraged and stops looking for a job. 
A) loses her job because of technological change. 
B) is laid off but expects to be called back soon. 
C) gives up her job because she retires. 
D) decides to leave the labour force and become a full-time student. 
E) becomes discouraged and stops looking for a job.

Question 2

R1 is

Accepted Answer

A) long-term unemployment. 
B) the official unemployment rate. 
C) comparable to the official U.S. rate. 
D) short-term unemployment. 
E) the unemployment rate that adds discouraged searchers to the official rate. 
A) long-term unemployment. 
B) the official unemployment rate. 
C) comparable to the official U.S. rate. 
D) short-term unemployment. 
E) the unemployment rate that adds discouraged searchers to the official rate.

Question 3

In a country with a working-age population of 30 million, 18 million are employed, 2 million are unemployed, and 2 million of the employed are working part-time, half of whom wish to work full-time. The employment-to-population ratio is

Accepted Answer

A) 73.3 percent. 
B) 66.7 percent. 
C) 60 percent. 
D) 53.3 percent. 
E) 18 percent. 
A) 73.3 percent. 
B) 66.7 percent. 
C) 60 percent. 
D) 53.3 percent. 
E) 18 percent.

Question 4

The price indexes that are alternatives to the CPI are

Accepted Answer

A) the GDP deflator and the chained price index for consumption. 
B) the chained price index for consumption and the CPI deflator. 
C) the core GDP deflator and the CPI deflator. 
D) the GDP deflator and the CPI deflator. 
E) the unbiased CPI and the unbiased GDP deflator. 
A) the GDP deflator and the chained price index for consumption. 
B) the chained price index for consumption and the CPI deflator. 
C) the core GDP deflator and the CPI deflator. 
D) the GDP deflator and the CPI deflator. 
E) the unbiased CPI and the unbiased GDP deflator.

Question 5

Use the information below to answer the following questions.
Fact 21.2.1 Some Firms Struggle to Hire Despite High Unemployment
Matching people with available jobs is always difficult after a recession as the economy remakes itself. But labour market data suggest the disconnect is particularly acute this time. Since the recovery began, the number of job openings has risen more than twice as fast as actual hires. If the job market were working normally, openings would be getting filled as they appear. Some 5 million more would be employed and the unemployment rate would be 6.8%, instead of 9.5%.
Source: The Wall Street Journal, August 9, 2010
-Consider Fact 21.2.1. The 5 million workers who cannot find jobs because of mismatching in the labour market are counted as part of the economy's ________ unemployment because ________.

Accepted Answer

A) cyclical; the economy is rebounding from a recession 
B) cyclical; there is a mismatch between their skills and the skills required for the available jobs 
C) structural; there is a mismatch between their skills and the skills required for the available jobs 
D) structural; the economy is rebounding from a recession 
E) frictional; finding jobs after a recession is a normal part of the labour market 
A) cyclical; the economy is rebounding from a recession 
B) cyclical; there is a mismatch between their skills and the skills required for the available jobs 
C) structural; there is a mismatch between their skills and the skills required for the available jobs 
D) structural; the economy is rebounding from a recession 
E) frictional; finding jobs after a recession is a normal part of the labour market

Question 6

If the inflation rate is negative, the price level in an economy is

Accepted Answer

A) rising rapidly. 
B) rising slowly. 
C) falling. 
D) constant. 
E) negative. 
A) rising rapidly. 
B) rising slowly. 
C) falling. 
D) constant. 
E) negative.

Question 7

Use the table below to answer the following questions.
Table 21.3.1
Suppose a simple economy produces three goods only.
The price and output data for some selected years are shown below.
  
-Refer to Table 21.3.1. The reference base period is 2002. The CPI in 2014 is

Accepted Answer

A) 1,340. 
B) 158. 
C) 100. 
D) 96. 
E) 63. 
A) 1,340. 
B) 158. 
C) 100. 
D) 96. 
E) 63.

Question 8

In a country with a working-age population of 22 million, 16 million are employed, 2 million are unemployed, and 1 million of the employed are working part-time, half of whom wish to work full-time. The involuntary part-time rate is

Accepted Answer

A) 6.3 percent. 
B) 12.5 percent. 
C) 2.8 percent. 
D) 5 percent. 
E) 0.5 percent. 
A) 6.3 percent. 
B) 12.5 percent. 
C) 2.8 percent. 
D) 5 percent. 
E) 0.5 percent.

Question 9

Michael lost his job as a night security guard because he kept falling asleep at the job. Now he is looking for a new job. Michael is

Accepted Answer

A) frictionally unemployed. 
B) structurally unemployed. 
C) not unemployed. 
D) cyclically unemployed. 
E) not in the labour force. 
A) frictionally unemployed. 
B) structurally unemployed. 
C) not unemployed. 
D) cyclically unemployed. 
E) not in the labour force.

Question 10

The technique used to calculate the CPI implicitly assumes that consumers buy

Accepted Answer

A) relatively more of goods with relative prices that are increasing. 
B) relatively less of goods with relative prices that are decreasing. 
C) the same relative quantities of goods as in a base year. 
D) goods and services whose quality improves at the rate of growth of real GDP. 
E) more computers and CD players and fewer black-and-white TVs. 
A) relatively more of goods with relative prices that are increasing. 
B) relatively less of goods with relative prices that are decreasing. 
C) the same relative quantities of goods as in a base year. 
D) goods and services whose quality improves at the rate of growth of real GDP. 
E) more computers and CD players and fewer black-and-white TVs.

Question 11

Which of the following pieces of information do you need to calculate the labour force participation rate?
I. the number of employed persons
II. the number of unemployed persons
III. the population
IV. the working age population

Accepted Answer

A) I and II 
B) I and III 
C) I, II, and III 
D) I, II, and IV 
E) I, II, III, and IV 
A) I and II 
B) I and III 
C) I, II, and III 
D) I, II, and IV 
E) I, II, III, and IV

Question 12

If the CPI was 180 at the end of 2013, and 216 at the end of 2014, the inflation rate in 2014 was

Accepted Answer

A) 216 percent. 
B) 36 percent. 
C) 16.67 percent. 
D) 20 percent. 
E) 18 percent. 
A) 216 percent. 
B) 36 percent. 
C) 16.67 percent. 
D) 20 percent. 
E) 18 percent.

Question 13

The employment-to-population ratio is

Accepted Answer

A) the percentage of the working-age population who are employed. 
B) the percentage of the labour force who are unemployed or employed. 
C) the percentage of the working-age population who are unemployed or employed. 
D) the percentage of the labour force who are employed. 
E) none of the above 
A) the percentage of the working-age population who are employed. 
B) the percentage of the labour force who are unemployed or employed. 
C) the percentage of the working-age population who are unemployed or employed. 
D) the percentage of the labour force who are employed. 
E) none of the above

Question 14

Comparing the core inflation rate to the Consumer Price Index, the core inflation rate

Accepted Answer

A) controls for the biases of the CPI. 
B) measures all goods produced, not just consumer goods. 
C) uses current period quantities, not base period quantities. 
D) excludes the volatile elements of the CPI. 
E) includes volatile elements not in the CPI. 
A) controls for the biases of the CPI. 
B) measures all goods produced, not just consumer goods. 
C) uses current period quantities, not base period quantities. 
D) excludes the volatile elements of the CPI. 
E) includes volatile elements not in the CPI.

Question 15

In China, suppose that the price level was 100 in 2007, 110 in 2008, 120 in 2009, and 130 in 2011. Over this time period,

Accepted Answer

A) zero inflation occurred. 
B) the inflation rate increased. 
C) the inflation rate was positive. 
D) the inflation rate decreased. 
E) Both C and D are correct. 
A) zero inflation occurred. 
B) the inflation rate increased. 
C) the inflation rate was positive. 
D) the inflation rate decreased. 
E) Both C and D are correct.

Question 16

The natural unemployment rate is

Accepted Answer

A) equal to 0 percent. 
B) the same as the cyclical unemployment rate. 
C) the rate at which cyclical unemployment is equal to 6 percent. 
D) the rate at which cyclical unemployment is equal to 0 percent. 
E) the rate at which all unemployment is structural. 
A) equal to 0 percent. 
B) the same as the cyclical unemployment rate. 
C) the rate at which cyclical unemployment is equal to 6 percent. 
D) the rate at which cyclical unemployment is equal to 0 percent. 
E) the rate at which all unemployment is structural.

Question 17

The working-age population is the total number of people

Accepted Answer

A) in the labour force. 
B) in the labour force who are employed. 
C) aged 15 years and over. 
D) in the labour force, aged 15 years and over. 
E) in the labour force, aged 15 years and over, and employed. 
A) in the labour force. 
B) in the labour force who are employed. 
C) aged 15 years and over. 
D) in the labour force, aged 15 years and over. 
E) in the labour force, aged 15 years and over, and employed.

Question 18

Suppose a trade union and a firm agree to increase the wage rate by the same percentage as the increase in the Consumer Price Index. If the CPI increases by 5 percent, then the real income of workers will

Accepted Answer

A) increase by 5 percent as well. 
B) remain unchanged, accounting for bias in the calculation of the CPI. 
C) decrease by 5 percent, accounting for bias in the calculation of the CPI. 
D) increase by more than 5 percent, accounting for bias in the calculation of the CPI. 
E) increase by less than 5 percent, accounting for bias in the calculation of the CPI. 
A) increase by 5 percent as well. 
B) remain unchanged, accounting for bias in the calculation of the CPI. 
C) decrease by 5 percent, accounting for bias in the calculation of the CPI. 
D) increase by more than 5 percent, accounting for bias in the calculation of the CPI. 
E) increase by less than 5 percent, accounting for bias in the calculation of the CPI.

Question 19

If the people who take early retirement are not counted in the working-age population, then

Accepted Answer

A) the unemployment rate would be lower. 
B) the labour force participation rate would be less. 
C) the unemployment rate would be higher. 
D) the labour force participation rate would be higher. 
E) the number of discouraged searchers would decrease. 
A) the unemployment rate would be lower. 
B) the labour force participation rate would be less. 
C) the unemployment rate would be higher. 
D) the labour force participation rate would be higher. 
E) the number of discouraged searchers would decrease.

Question 20

If the working-age population increases, then

Accepted Answer

A) the size of the labour force will increase. 
B) the number of people employed will increase. 
C) the unemployment rate will increase. 
D) the labour force participation rate will increase. 
E) the total number of people aged 15 years and above will increase. 
A) the size of the labour force will increase. 
B) the number of people employed will increase. 
C) the unemployment rate will increase. 
D) the labour force participation rate will increase. 
E) the total number of people aged 15 years and above will increase.

Exam 21: Monitoring Jobs and Inflation

Which one of the following people is frictionally unemployed? A steel worker who

R1 is

In a country with a working-age population of 30 million, 18 million are employed, 2 million are unemployed, and 2 million of the employed are working part-time, half of whom wish to work full-time. The employment-to-population ratio is

The price indexes that are alternatives to the CPI are

If the inflation rate is negative, the price level in an economy is

Use the table below to answer the following questions. Table 21.3.1 Suppose a simple economy produces three goods only. The price and output data for some selected years are shown below. -Refer to Table 21.3.1. The reference base period is 2002. The CPI in 2014 is

In a country with a working-age population of 22 million, 16 million are employed, 2 million are unemployed, and 1 million of the employed are working part-time, half of whom wish to work full-time. The involuntary part-time rate is

Michael lost his job as a night security guard because he kept falling asleep at the job. Now he is looking for a new job. Michael is

The technique used to calculate the CPI implicitly assumes that consumers buy

Which of the following pieces of information do you need to calculate the labour force participation rate? I. the number of employed persons II. the number of unemployed persons III. the population IV. the working age population

If the CPI was 180 at the end of 2013, and 216 at the end of 2014, the inflation rate in 2014 was

The employment-to-population ratio is

Comparing the core inflation rate to the Consumer Price Index, the core inflation rate

In China, suppose that the price level was 100 in 2007, 110 in 2008, 120 in 2009, and 130 in 2011. Over this time period,

The natural unemployment rate is

The working-age population is the total number of people

Suppose a trade union and a firm agree to increase the wage rate by the same percentage as the increase in the Consumer Price Index. If the CPI increases by 5 percent, then the real income of workers will

If the people who take early retirement are not counted in the working-age population, then

If the working-age population increases, then

What Is Economics

The Economic Problem

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Elasticity

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Governments Actions in Markets

Global Markets in Action

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Possibilities, Preferences, and Choices

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Perfect Competition

Monopoly

Monopolistic Competition

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Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

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

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