Question 1

An example of a seasonally unemployed worker would be

Accepted Answer

A)  a software engineer who is laid off because of declining demand for the software he writes. 
B)  a day care provider who quits his job to go back to school. 
C)  a General Motors employee loses her job because the company is downsizing its work force. 
D)  a ski lift operator who loses his job when the snow melts in the spring. 
E)  a mother who quits her job to stay home with her children. 
A)  a software engineer who is laid off because of declining demand for the software he writes. 
B)  a day care provider who quits his job to go back to school. 
C)  a General Motors employee loses her job because the company is downsizing its work force. 
D)  a ski lift operator who loses his job when the snow melts in the spring. 
E)  a mother who quits her job to stay home with her children.

Question 2

Table 20-17
  
-Refer to Table 20-17. Looking at the table above, real average hourly earnings in 2010 were

Accepted Answer

A)  $3.67. 
B)  $5.63. 
C)  $10.24. 
D)  $11.37. 
A)  $3.67. 
B)  $5.63. 
C)  $10.24. 
D)  $11.37.

Question 3

The full-employment rate of unemployment is zero.

Accepted Answer

A) True 
 B)False

Question 4

In recent years, economists have come to rely more on the establishment survey rather than the household survey to analyze current labor market statistics.

Accepted Answer

A) True 
 B)False

Question 5

If the number of unemployed workers is 19 million, the number in the working-age population is 500 million, and the unemployment rate is 4%, what is the labor force participation rate?

Accepted Answer

A)  4.75% 
B)  7.8% 
C)  95% 
D)  96.2% 
A)  4.75% 
B)  7.8% 
C)  95% 
D)  96.2%

Question 6

Table 20-12
  
-Refer to Table 20-12. Consider a simple economy that produces only three products: burritos, flashlights, and golf balls. Use the information in the table to calculate the inflation rate for 2013, as measured by the consumer price index.

Accepted Answer

Total expenditures for 2001 = (10 × $1.0

Question 7

Table 20-17
  
-Refer to Table 20-17. Looking at the table above, real average hourly earnings between 2010 and 2011 changed by

Accepted Answer

A)  1.2%. 
B)  4.5%. 
C)  9.9%. 
D)  14.5%. 
A)  1.2%. 
B)  4.5%. 
C)  9.9%. 
D)  14.5%.

Question 8

The formula for calculating the CPI is

Accepted Answer

A)  (Expenditures in the current year/Expenditures in the base year) × 100. 
B)  (Expenditures in the current year × Expenditures in the base year)/100. 
C)  (Expenditures in the base year/Expenditures in the current year). 
D)  (Expenditures in the base year × 100)/(Expenditures in the current year). 
A)  (Expenditures in the current year/Expenditures in the base year) × 100. 
B)  (Expenditures in the current year × Expenditures in the base year)/100. 
C)  (Expenditures in the base year/Expenditures in the current year). 
D)  (Expenditures in the base year × 100)/(Expenditures in the current year).

Question 9

Why might firms pay wages that are above the equilibrium wage in a market?

Accepted Answer

A)  to increase the productivity of their workers 
B)  to reduce the unemployment rate 
C)  to encourage workers to form labor unions 
D)  to reduce profit 
A)  to increase the productivity of their workers 
B)  to reduce the unemployment rate 
C)  to encourage workers to form labor unions 
D)  to reduce profit

Question 10

The most widely used measure of inflation is based on which of the following price indices?

Accepted Answer

A)  the producer price index 
B)  the consumer price index 
C)  the GDP deflator 
D)  the wholesale price index 
A)  the producer price index 
B)  the consumer price index 
C)  the GDP deflator 
D)  the wholesale price index

Question 11

The Bureau of Labor Statistics counts as employed people who work part-time, but would prefer to work full-time. Suppose the people who had part-time jobs, but wanted full-time jobs, were counted as unemployed. Explain how the unemployment rate and the labor force participation rate would change.

Accepted Answer

The unemployment rate would increase and

Question 12

Which of the following is the smallest portion of the market basket of goods that makes up the CPI?

Accepted Answer

A)  housing 
B)  food and beverages 
C)  transportation 
D)  apparel 
A)  housing 
B)  food and beverages 
C)  transportation 
D)  apparel

Question 13

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 14

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

Question 15

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 16

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%. If inflation over the year is 2%, what is the real interest rate you are paying?

Accepted Answer

A)  2% 
B)  2.5% 
C)  3% 
D)  5% 
A)  2% 
B)  2.5% 
C)  3% 
D)  5%

Question 17

Why would a firm pay efficiency wages?

Accepted Answer

An efficiency wage is a wage that is hig

Question 18

When the price of gasoline rises, some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars. The fact that the CPI does not fully account for such changes in consumer behavior is called

Accepted Answer

A)  outlet bias. 
B)  increase in quality bias. 
C)  substitution bias. 
D)  discrimination bias. 
A)  outlet bias. 
B)  increase in quality bias. 
C)  substitution bias. 
D)  discrimination bias.

Question 19

In August 2013, the U.S. unemployment rate was highest for

Accepted Answer

A)  whites. 
B)  Hispanics. 
C)  high school dropouts. 
D)  African-Americans. 
E)  Asians. 
A)  whites. 
B)  Hispanics. 
C)  high school dropouts. 
D)  African-Americans. 
E)  Asians.

Question 20

The advice to "retrain" would be most appropriate for which of the following types of unemployment?

Accepted Answer

A)  frictional unemployment 
B)  structural unemployment 
C)  cyclical unemployment 
D)  core unemployment 
A)  frictional unemployment 
B)  structural unemployment 
C)  cyclical unemployment 
D)  core unemployment

Exam 20: Unemployment and Inflation

An example of a seasonally unemployed worker would be

Table 20-17 -Refer to Table 20-17. Looking at the table above, real average hourly earnings in 2010 were

The full-employment rate of unemployment is zero.

In recent years, economists have come to rely more on the establishment survey rather than the household survey to analyze current labor market statistics.

If the number of unemployed workers is 19 million, the number in the working-age population is 500 million, and the unemployment rate is 4%, what is the labor force participation rate?

Table 20-12 -Refer to Table 20-12. Consider a simple economy that produces only three products: burritos, flashlights, and golf balls. Use the information in the table to calculate the inflation rate for 2013, as measured by the consumer price index.

Table 20-17 -Refer to Table 20-17. Looking at the table above, real average hourly earnings between 2010 and 2011 changed by

The formula for calculating the CPI is

Why might firms pay wages that are above the equilibrium wage in a market?

The most widely used measure of inflation is based on which of the following price indices?

The Bureau of Labor Statistics counts as employed people who work part-time, but would prefer to work full-time. Suppose the people who had part-time jobs, but wanted full-time jobs, were counted as unemployed. Explain how the unemployment rate and the labor force participation rate would change.

Which of the following is the smallest portion of the market basket of goods that makes up the CPI?

The producer price index measures the prices that firms

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

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.

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%. If inflation over the year is 2%, what is the real interest rate you are paying?

Why would a firm pay efficiency wages?

When the price of gasoline rises, some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars. The fact that the CPI does not fully account for such changes in consumer behavior is called

In August 2013, the U.S. unemployment rate was highest for

The advice to "retrain" would be most appropriate for which of the following types of unemployment?

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

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

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 .