Question 1

The cost of the CPI basket in base-period prices is $200 and the cost of the CPI basket in current-period prices is $450. The CPI in the current year is

Accepted Answer

A) 450. 
B) 225. 
C) 300. 
D) 250. 
E) 44.44. 
A) 450. 
B) 225. 
C) 300. 
D) 250. 
E) 44.44.

Question 2

Which one of the following people would be counted as unemployed in Canada?

Accepted Answer

A) Doris works only 5 hours a week but is looking for a full-time job. 
B) Kanhaya has stopped looking for work since he was unable to find a suitable job during a two-month search. 
C) Sharon recently began looking for work after staying at home for 10 years to look after her children. 
D) Maurice is on a two-month vacation out of the country but is still looking for a job using the Internet. 
E) Taylor is a homemaker. 
A) Doris works only 5 hours a week but is looking for a full-time job. 
B) Kanhaya has stopped looking for work since he was unable to find a suitable job during a two-month search. 
C) Sharon recently began looking for work after staying at home for 10 years to look after her children. 
D) Maurice is on a two-month vacation out of the country but is still looking for a job using the Internet. 
E) Taylor is a homemaker.

Question 3

When the unemployment rate ________ the natural unemployment rate, real GDP ________ potential GDP.

Accepted Answer

A) equals; is less than 
B) is greater than; is less than 
C) is less than; is less than 
D) equals; is greater than 
E) is greater than; equals 
A) equals; is less than 
B) is greater than; is less than 
C) is less than; is less than 
D) equals; is greater than 
E) is greater than; equals

Question 4

The consumer price index is a measure of

Accepted Answer

A) the average of the prices paid by urban consumers for a fixed basket of consumer goods and services. 
B) the commodity prices paid by urban consumers for a fixed basket of consumer goods and services. 
C) the consumer prices paid by average households for a fixed basket of goods and services. 
D) the average of the prices paid by rural consumers for a fixed basket of consumer goods and services. 
E) the lowest prices paid by urban consumers for a fixed basket of consumer goods and services. 
A) the average of the prices paid by urban consumers for a fixed basket of consumer goods and services. 
B) the commodity prices paid by urban consumers for a fixed basket of consumer goods and services. 
C) the consumer prices paid by average households for a fixed basket of goods and services. 
D) the average of the prices paid by rural consumers for a fixed basket of consumer goods and services. 
E) the lowest prices paid by urban consumers for a fixed basket of consumer goods and services.

Question 5

Use the information below to answer the following questions.
Fact 21.2.3
Oregon's 5.6 percent unemployment rate hovers close the national average of 5.5 percent. A few years ago, Oregon had one of the highest unemployment rates in the nation. To avoid rising unemployment, Oregon Governor Kulongoski introduced a plan that provides public schools and universities with enough state funds to meet growing demand for skilled workers. Also Kulongoski wants to use state and federal money for bridges, roads, and buildings to stimulate more construction jobs.
Source: The Oregonian, July 8, 2008
-Consider Fact 21.2.3. If these policies are successful, we would expect to see Oregon's natural unemployment rate to

Accepted Answer

A) fall to zero percent. 
B) fall. 
C) not change. 
D) rise. 
E) be equal to the sum of cyclical, structural, and frictional unemployment rates. 
A) fall to zero percent. 
B) fall. 
C) not change. 
D) rise. 
E) be equal to the sum of cyclical, structural, and frictional unemployment rates.

Question 6

The inflation rate measures

Accepted Answer

A) the annual change in the price level. 
B) the annual percentage change in the price level. 
C) the average price level. 
D) the annual percentage change in the wage rate. 
E) the annual percentage change in production. 
A) the annual change in the price level. 
B) the annual percentage change in the price level. 
C) the average price level. 
D) the annual percentage change in the wage rate. 
E) the annual percentage change in production.

Question 7

If the economy is at full employment,

Accepted Answer

A) the entire population is employed. 
B) the entire labour force is employed. 
C) the only unemployment is frictional unemployment plus discouraged searchers. 
D) real GDP equals potential GDP. 
E) all unemployment is cyclical and structural. 
A) the entire population is employed. 
B) the entire labour force is employed. 
C) the only unemployment is frictional unemployment plus discouraged searchers. 
D) real GDP equals potential GDP. 
E) all unemployment is cyclical and structural.

Question 8

The unemployment rate is defined as the number of

Accepted Answer

A) unemployed people divided by the number of employed people. 
B) employed people divided by the number of people in the country. 
C) unemployed people divided by the number of people in the country. 
D) unemployed people divided by the sum of the people employed and the people unemployed. 
E) unemployed people divided by the number of people in the country who are employed. 
A) unemployed people divided by the number of employed people. 
B) employed people divided by the number of people in the country. 
C) unemployed people divided by the number of people in the country. 
D) unemployed people divided by the sum of the people employed and the people unemployed. 
E) unemployed people divided by the number of people in the country who are employed.

Question 9

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 labour force participation rate is

Accepted Answer

A) 73.3 percent. 
B) 66.7 percent. 
C) 60 percent. 
D) 53.3 percent. 
E) 20 percent. 
A) 73.3 percent. 
B) 66.7 percent. 
C) 60 percent. 
D) 53.3 percent. 
E) 20 percent.

Question 10

If the CPI was 140 at the end of 2013 and 150 at the end of 2014, what was the inflation rate in 2014?

Accepted Answer

A) 7.14 percent 
B) 10 percent 
C) 6.25 percent 
D) 8 percent 
E) 6.67 percent 
A) 7.14 percent 
B) 10 percent 
C) 6.25 percent 
D) 8 percent 
E) 6.67 percent

Question 11

Suppose the country of Tiny Town experiences frictional unemployment. This frictional unemployment would

Accepted Answer

A) signal that the country is in a recession. 
B) be considered a natural occurrence in a growing economy. 
C) signal the number of discouraged searchers is growing. 
D) increase structural unemployment. 
E) decrease the output gap. 
A) signal that the country is in a recession. 
B) be considered a natural occurrence in a growing economy. 
C) signal the number of discouraged searchers is growing. 
D) increase structural unemployment. 
E) decrease the output gap.

Question 12

Suppose that the natural unemployment rate is 4.5 percent and the actual unemployment rate is 3.5 percent. Then cyclical unemployment is

Accepted Answer

A) 1 percent. 
B) -1 percent. 
C) 8 percent. 
D) 0 percent. 
E) 3.5 percent. 
A) 1 percent. 
B) -1 percent. 
C) 8 percent. 
D) 0 percent. 
E) 3.5 percent.

Question 13

Some unemployment is unavoidable because

Accepted Answer

A) people are making transitions through the stages of life and businesses are making transitions. 
B) many part-time workers would like to have full-time work. 
C) often people become discouraged searchers. 
D) many people in the working-age population attend school and are unemployed. 
E) there is always some cyclical unemployment. 
A) people are making transitions through the stages of life and businesses are making transitions. 
B) many part-time workers would like to have full-time work. 
C) often people become discouraged searchers. 
D) many people in the working-age population attend school and are unemployed. 
E) there is always some cyclical unemployment.

Question 14

Which of the following are not included in the working-age population?

Accepted Answer

A) discouraged searchers 
B) involuntary part-time workers 
C) retired workers 
D) students over the age of 15 
E) children under the age of 15 
A) discouraged searchers 
B) involuntary part-time workers 
C) retired workers 
D) students over the age of 15 
E) children under the age of 15

Question 15

Use the information below to answer the following question.
Fact 21.2.2
CNN reported that for the first six months of 2008, the U.S. economy lost 438,000 jobs. The job losses in June were concentrated in manufacturing and construction, two sectors that have been badly battered in the recession.
-Consider Fact 21.2.2. According to the news clip, the main source of increased unemployment might be ________, and the main type of increased unemployment is ________.

Accepted Answer

A) losses in manufacturing and construction jobs; cyclical 
B) people entering the labour force to look for work; structural 
C) people entering the labour force to look for work; frictional 
D) losses in manufacturing and construction jobs; structural 
E) losses in manufacturing and construction jobs; frictional 
A) losses in manufacturing and construction jobs; cyclical 
B) people entering the labour force to look for work; structural 
C) people entering the labour force to look for work; frictional 
D) losses in manufacturing and construction jobs; structural 
E) losses in manufacturing and construction jobs; frictional

Question 16

The Consumer Price Index measures inflation by using

Accepted Answer

A) all goods and services that are produced using a current-year basket. 
B) all goods and services that are produced using a base-year basket. 
C) only consumption goods and services purchased using a current-year basket. 
D) only consumption goods and services purchased using a base-year basket. 
E) the goods and services produced in the base year and goods and services produced in the current year. 
A) all goods and services that are produced using a current-year basket. 
B) all goods and services that are produced using a base-year basket. 
C) only consumption goods and services purchased using a current-year basket. 
D) only consumption goods and services purchased using a base-year basket. 
E) the goods and services produced in the base year and goods and services produced in the current year.

Question 17

Which one of the following people is cyclically unemployed?

Accepted Answer

A) a Saskatchewan welder who lost her job when her company relocated to B. C. and is currently looking for a job 
B) a Nova Scotia fishery worker who is searching for a better job closer to home 
C) a steel worker who is laid off but who expects to be called back soon 
D) an office worker who has lost her job because of a general slowdown in economic activity 
E) a student who recently graduated and is looking for work 
A) a Saskatchewan welder who lost her job when her company relocated to B. C. and is currently looking for a job 
B) a Nova Scotia fishery worker who is searching for a better job closer to home 
C) a steel worker who is laid off but who expects to be called back soon 
D) an office worker who has lost her job because of a general slowdown in economic activity 
E) a student who recently graduated and is looking for work

Question 18

In a country with a working-age population of 20 million, 13 million are employed, 1.5 million are unemployed, and 1 million of the employed are working part-time, half of whom wish to work full-time. The size of the labour force is

Accepted Answer

A) 20 million. 
B) 15.5 million. 
C) 14.5 million. 
D) 13 million. 
E) 11.5 million. 
A) 20 million. 
B) 15.5 million. 
C) 14.5 million. 
D) 13 million. 
E) 11.5 million.

Question 19

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 involuntary part-time rate is

Accepted Answer

A) 10 percent. 
B) 5 percent. 
C) 4.8 percent. 
D) 4.5 percent. 
E) 0.5 percent. 
A) 10 percent. 
B) 5 percent. 
C) 4.8 percent. 
D) 4.5 percent. 
E) 0.5 percent.

Question 20

Counting involuntary part-time workers as unemployed would

Accepted Answer

A) not change the actual unemployment rate. 
B) lower the measured unemployment rate. 
C) raise the natural unemployment rate. 
D) raise the full employment rate. 
E) raise the measured unemployment rate. 
A) not change the actual unemployment rate. 
B) lower the measured unemployment rate. 
C) raise the natural unemployment rate. 
D) raise the full employment rate. 
E) raise the measured unemployment rate.

Exam 21: Monitoring Jobs and Inflation

The cost of the CPI basket in base-period prices is $200 and the cost of the CPI basket in current-period prices is $450. The CPI in the current year is

Which one of the following people would be counted as unemployed in Canada?

When the unemployment rate ________ the natural unemployment rate, real GDP ________ potential GDP.

The consumer price index is a measure of

The inflation rate measures

If the economy is at full employment,

The unemployment rate is defined as the number of

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 labour force participation rate is

If the CPI was 140 at the end of 2013 and 150 at the end of 2014, what was the inflation rate in 2014?

Suppose the country of Tiny Town experiences frictional unemployment. This frictional unemployment would

Suppose that the natural unemployment rate is 4.5 percent and the actual unemployment rate is 3.5 percent. Then cyclical unemployment is

Some unemployment is unavoidable because

Which of the following are not included in the working-age population?

The Consumer Price Index measures inflation by using

Which one of the following people is cyclically unemployed?

In a country with a working-age population of 20 million, 13 million are employed, 1.5 million are unemployed, and 1 million of the employed are working part-time, half of whom wish to work full-time. The size of the labour force 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 involuntary part-time rate is

Counting involuntary part-time workers as unemployed would

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Governments Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

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

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Macro Only: International Trade Policy

Filters

When the unemployment rate the natural unemployment rate, real GDP potential GDP.