Question 1

The cost to firms of changing prices

Accepted Answer

A)  is small even when there is rapid inflation. 
B)  is called a menu cost. 
C)  does not exist if inflation is perfectly anticipated. 
D)  all of the above 
A)  is small even when there is rapid inflation. 
B)  is called a menu cost. 
C)  does not exist if inflation is perfectly anticipated. 
D)  all of the above B

Question 2

Suppose that homemakers are included as employed in the labor force statistics,rather than being counted as out of the labor force.This would

Accepted Answer

A)  increase the measured unemployment rate. 
B)  increase the measured labor force participation rate. 
C)  decrease the number of persons in the labor force. 
D)  decrease the number of persons in the working-age population. 
A)  increase the measured unemployment rate. 
B)  increase the measured labor force participation rate. 
C)  decrease the number of persons in the labor force. 
D)  decrease the number of persons in the working-age population. B

Question 3

Since 1948,the labor force participation rate for adult men has ________ and for adult women has ________.

Accepted Answer

A)  increased; increased 
B)  increased; decreased 
C)  decreased; increased 
D)  decreased; decreased 
A)  increased; increased 
B)  increased; decreased 
C)  decreased; increased 
D)  decreased; decreased C

Question 4

Structural unemployment is the result of

Accepted Answer

A)  a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs. 
B)  the search process of matching workers with jobs. 
C)  the ups and downs in inflation. 
D)  a slowdown in the economy. 
A)  a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs. 
B)  the search process of matching workers with jobs. 
C)  the ups and downs in inflation. 
D)  a slowdown in the economy.

Question 5

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2010,then the value of your grandfather's salary in 2010 dollars is approximately

Accepted Answer

A)  $84,775. 
B)  $63,830. 
C)  $37,200. 
D)  $26,280. 
A)  $84,775. 
B)  $63,830. 
C)  $37,200. 
D)  $26,280.

Question 6

Nominal income is equal to real income if the CPI is less than 100.

Accepted Answer

A) True 
 B)False

Question 7

An increase in unemployment insurance payments would,in effect,________ the amount of time spent searching for a job,which would increase ________ unemployment.

Accepted Answer

A)  increase; cyclical 
B)  increase; frictional 
C)  decrease; cyclical 
D)  decrease; frictional 
A)  increase; cyclical 
B)  increase; frictional 
C)  decrease; cyclical 
D)  decrease; frictional

Question 8

If your nominal wage rises faster than the price level,we can say your real wage has ________ and the purchasing power of your income has ________.

Accepted Answer

A)  fallen; fallen 
B)  fallen; risen 
C)  risen; risen 
D)  risen; fallen 
A)  fallen; fallen 
B)  fallen; risen 
C)  risen; risen 
D)  risen; fallen

Question 9

Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to overstate the true extent of joblessness?

Accepted Answer

A)  inflation 
B)  discouraged workers 
C)  counting people as employed who are working part time, although they would prefer to be working full time 
D)  unemployed persons falsely report themselves to be actively looking for a job 
A)  inflation 
B)  discouraged workers 
C)  counting people as employed who are working part time, although they would prefer to be working full time 
D)  unemployed persons falsely report themselves to be actively looking for a job

Question 10

If inflation is positive and is perfectly anticipated,

Accepted Answer

A)  those that borrow money lose. 
B)  those that lend money lose. 
C)  those that hold paper money lose. 
D)  no one in the economy loses. 
A)  those that borrow money lose. 
B)  those that lend money lose. 
C)  those that hold paper money lose. 
D)  no one in the economy loses.

Question 11

Suppose the labor force stays constant,and the working-age population stays constant,but a greater number of persons who were unemployed become employed.The labor force participation rate will

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain constant. 
D)  not change in a way that can be predicted. 
A)  increase. 
B)  decrease. 
C)  remain constant. 
D)  not change in a way that can be predicted.

Question 12

Table 20-10
   
Salaries in major league baseball have soared over the last 30 to 40 years. Some of the salary increase is due to inflation. The table above reports the consumer price index and the median nominal salary of the New York Yankees for 1989 and 2009.
Source: USA Today Salaries Database, asp.usatoday.com/sports/baseball/salaries/default.aspx
-Refer to Table 20-10.Calculate the real median salary of the New York Yankees in both 1982-1984 dollars and 2009 dollars.Calculate the percentage increase in the median salary of the Yankees from 1989 to 2009 in both nominal terms and in real terms.

Accepted Answer

Real median salary = @#IMG-DLM& × 100.
Real median

Question 13

The Bureau of Labor Statistics does not count discouraged workers as unemployed.Suppose discouraged workers were counted as unemployed.Explain how the unemployment rate and the labor force participation rate would change.

Accepted Answer

Both the unemployment rate and the labor

Question 14

Table 20-8
   
The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010.
-Refer to Table 20-8.The percentage change in real average earnings from 1965 to 2010 equals

Accepted Answer

A)  2.0 percent 
B)  19.7 percent. 
C)  24.5 percent. 
D)  80.3 percent. 
A)  2.0 percent 
B)  19.7 percent. 
C)  24.5 percent. 
D)  80.3 percent.

Question 15

If the minimum wage is set above the market wage,

Accepted Answer

A)  the quantity of labor supplied will be below the quantity of labor demanded. 
B)  unemployment will rise. 
C)  highly-skilled workers will have a harder time finding jobs. 
D)  All of the above are correct. 
A)  the quantity of labor supplied will be below the quantity of labor demanded. 
B)  unemployment will rise. 
C)  highly-skilled workers will have a harder time finding jobs. 
D)  All of the above are correct.

Question 16

Table 20-9
  
-Refer to Table 20-9.Looking at the table above,real average hourly earnings in 2009 were

Accepted Answer

A)  $9 
B)  $9.52 
C)  $10 
D)  $12.63 
A)  $9 
B)  $9.52 
C)  $10 
D)  $12.63

Question 17

Which of the following would decrease the unemployment rate?

Accepted Answer

A)  an increase in the minimum wage 
B)  an increase in the efficiency wage 
C)  an increase in labor union membership 
D)  government aid to retrain unemployed workers 
A)  an increase in the minimum wage 
B)  an increase in the efficiency wage 
C)  an increase in labor union membership 
D)  government aid to retrain unemployed workers

Question 18

Table 20-3
  
-Refer to Table 20-3.Assume the market basket for the consumer price index has three products - Cokes,hamburgers,and CDs - with the following values in 2006 and 2011 for price and quantity: The Consumer Price Index for 2011 equals

Accepted Answer

A)  75. 
B)  93. 
C)  108. 
D)  121. 
A)  75. 
B)  93. 
C)  108. 
D)  121.

Question 19

The producer price index measures the prices that firms

Accepted Answer

A)  pay for imported natural resources that go into the production process. 
B)  receive for the goods and services they export. 
C)  receive for the goods and services they use at all stages of production. 
D)  pay for labor, whether or not the labor is foreign or domestic. 
A)  pay for imported natural resources that go into the production process. 
B)  receive for the goods and services they export. 
C)  receive for the goods and services they use at all stages of production. 
D)  pay for labor, whether or not the labor is foreign or domestic.

Question 20

Suppose the working-age population of a fictional economy falls into the following categories: 90 are retired or homemakers; 60 have full-time employment; 20 have part-time employment; 20 do not have employment,but are actively looking for employment; and 10 would like employment but do not have employment and are not actively looking for employment.The official unemployment rate as calculated by the U.S.Bureau of Labor would equal

Accepted Answer

A)  (20/60) × 100. 
B)  (20/80) × 100. 
C)  (30/80) × 100. 
D)  (20/100) × 100. 
A)  (20/60) × 100. 
B)  (20/80) × 100. 
C)  (30/80) × 100. 
D)  (20/100) × 100.

The cost to firms of changing prices

Suppose that homemakers are included as employed in the labor force statistics,rather than being counted as out of the labor force.This would

Since 1948,the labor force participation rate for adult men has and for adult women has .

Structural unemployment is the result of

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2010,then the value of your grandfather's salary in 2010 dollars is approximately

Nominal income is equal to real income if the CPI is less than 100.

An increase in unemployment insurance payments would,in effect, the amount of time spent searching for a job,which would increase unemployment.

If your nominal wage rises faster than the price level,we can say your real wage has and the purchasing power of your income has .

Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to overstate the true extent of joblessness?

If inflation is positive and is perfectly anticipated,

Suppose the labor force stays constant,and the working-age population stays constant,but a greater number of persons who were unemployed become employed.The labor force participation rate will

The Bureau of Labor Statistics does not count discouraged workers as unemployed.Suppose discouraged workers were counted as unemployed.Explain how the unemployment rate and the labor force participation rate would change.

Table 20-8 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 20-8.The percentage change in real average earnings from 1965 to 2010 equals

If the minimum wage is set above the market wage,

Table 20-9 -Refer to Table 20-9.Looking at the table above,real average hourly earnings in 2009 were

Which of the following would decrease the unemployment rate?

Table 20-3 -Refer to Table 20-3.Assume the market basket for the consumer price index has three products - Cokes,hamburgers,and CDs - with the following values in 2006 and 2011 for price and quantity: The Consumer Price Index for 2011 equals

The producer price index measures the prices that firms

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 9: Unemployment and Inflation

The cost to firms of changing prices

Suppose that homemakers are included as employed in the labor force statistics,rather than being counted as out of the labor force.This would

Since 1948,the labor force participation rate for adult men has ________ and for adult women has ________.

Structural unemployment is the result of

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2010,then the value of your grandfather's salary in 2010 dollars is approximately

Nominal income is equal to real income if the CPI is less than 100.

An increase in unemployment insurance payments would,in effect,________ the amount of time spent searching for a job,which would increase ________ unemployment.

If your nominal wage rises faster than the price level,we can say your real wage has ________ and the purchasing power of your income has ________.

Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to overstate the true extent of joblessness?

If inflation is positive and is perfectly anticipated,

Suppose the labor force stays constant,and the working-age population stays constant,but a greater number of persons who were unemployed become employed.The labor force participation rate will

The Bureau of Labor Statistics does not count discouraged workers as unemployed.Suppose discouraged workers were counted as unemployed.Explain how the unemployment rate and the labor force participation rate would change.

Table 20-8 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 20-8.The percentage change in real average earnings from 1965 to 2010 equals

If the minimum wage is set above the market wage,

Table 20-9 -Refer to Table 20-9.Looking at the table above,real average hourly earnings in 2009 were

Which of the following would decrease the unemployment rate?

Table 20-3 -Refer to Table 20-3.Assume the market basket for the consumer price index has three products - Cokes,hamburgers,and CDs - with the following values in 2006 and 2011 for price and quantity: The Consumer Price Index for 2011 equals

The producer price index measures the prices that firms

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Since 1948,the labor force participation rate for adult men has and for adult women has .

An increase in unemployment insurance payments would,in effect, the amount of time spent searching for a job,which would increase unemployment.

If your nominal wage rises faster than the price level,we can say your real wage has and the purchasing power of your income has .