Question 1

Most economists consider the GDP deflator as ________ of inflationary pressures in the economy.

Accepted Answer

A)  the least accurate measure 
B)  an overvalued measure 
C)  only valid as a wholesale price measure 
D)  the best overall indicator 
A)  the least accurate measure 
B)  an overvalued measure 
C)  only valid as a wholesale price measure 
D)  the best overall indicator D

Question 2

Refer to the information provided in Table 7.6 below to answer the questions that follow.
Table 7.6  
-Refer to Table 7.6. If 2014 is the base year, the price index in 2016 is

Accepted Answer

A)  59.8. 
B)  71.3. 
C)  128.7. 
D)  140.2. 
A)  59.8. 
B)  71.3. 
C)  128.7. 
D)  140.2. D

Question 3

Related to the Economics in Practice on p. 133: The Consumer Price Index in the United States was 207.3 in 2007, 215.3 in 2008 and 214.5 in 2009. If a retiree's pension is tied to the CPI, her monthly pension check would have ________ from 2007 to 2008, and ________ from 2008 to 2009.

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 B

Question 4

Refer to the information provided in Table 7.5 below to answer the questions that follow.
Table 7.5  
-Refer to Table 7.5. If 2014 is the base year, the inflation rate between 2014 and 2015 is ________%, and the inflation rate between 2015 and 2016 is ________%.

Accepted Answer

A)  7.4; 13.9 
B)  6.1; 16.1 
C)  3.9; 17.1 
D)  10.2; 10.4 
A)  7.4; 13.9 
B)  6.1; 16.1 
C)  3.9; 17.1 
D)  10.2; 10.4

Question 5

In economics, the mental or physical skills people have is called

Accepted Answer

A)  personal investment. 
B)  human capital. 
C)  external education. 
D)  intuition. 
A)  personal investment. 
B)  human capital. 
C)  external education. 
D)  intuition.

Question 6

Refer to the information provided in Table 7.1 below to answer the questions that follow.
Table 7.1  
-Refer to Table 7.1. The labor-force participation rate is

Accepted Answer

A)  66.7%. 
B)  75.0%. 
C)  77.8%. 
D)  80.9%. 
A)  66.7%. 
B)  75.0%. 
C)  77.8%. 
D)  80.9%.

Question 7

The number of people classified as employed is 260,000 and the number of people classified as unemployed is 30,000. The size of the labor force

Accepted Answer

A)  equals 230,000. 
B)  equals 260,000. 
C)  equals 290,000. 
D)  equals 320,000. 
A)  equals 230,000. 
B)  equals 260,000. 
C)  equals 290,000. 
D)  equals 320,000.

Question 8

If the price index in 2015 is 132 and the price index in 2016 is 114, the rate of inflation between 2015 and 2016 is

Accepted Answer

A)  -13.6%. 
B)  -5.8%. 
C)  6.4%. 
D)  15.8%. 
A)  -13.6%. 
B)  -5.8%. 
C)  6.4%. 
D)  15.8%.

Question 9

Telephone operators who have lost their jobs as a result of computerized switchboards are an example of

Accepted Answer

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

Question 10

If the CPI in period 1 is 125 and the CPI in period 2 is 150, then the rate of inflation between period 1 and period 2 is

Accepted Answer

A)  20%. 
B)  25%. 
C)  30%. 
D)  50%. 
A)  20%. 
B)  25%. 
C)  30%. 
D)  50%.

Question 11

Classifying discouraged workers as unemployed would

Accepted Answer

A)  increase the unemployment rate. 
B)  decrease the unemployment rate. 
C)  not change the unemployment rate. 
D)  have an indeterminate impact on the unemployment rate. 
A)  increase the unemployment rate. 
B)  decrease the unemployment rate. 
C)  not change the unemployment rate. 
D)  have an indeterminate impact on the unemployment rate.

Question 12

When 100 people who had previously stopped looking for jobs now decide to look for jobs, the

Accepted Answer

A)  unemployment rate decreases. 
B)  size of the labor force increases. 
C)  labor-force participation rate does not change. 
D)  unemployment rate does not change. 
A)  unemployment rate decreases. 
B)  size of the labor force increases. 
C)  labor-force participation rate does not change. 
D)  unemployment rate does not change.

Question 13

Refer to the information provided in Table 7.6 below to answer the questions that follow.
Table 7.6  
-Refer to Table 7.6. If 2015 is the base year, the inflation rate between 2014 and 2015 is

Accepted Answer

A)  23.2%. 
B)  20.4%. 
C)  18.8%. 
D)  14.1%. 
A)  23.2%. 
B)  20.4%. 
C)  18.8%. 
D)  14.1%.

Question 14

The broadest-based price index available is the

Accepted Answer

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

Question 15

If your income is fixed and the economy experiences inflation, your ability to purchase goods and services rises.

Accepted Answer

A) True 
 B)False

Question 16

Estimates for the ________ rate of unemployment that routinely occurs in the United States range from 4 to 6 percent.

Accepted Answer

A)  frictional 
B)  structural 
C)  natural 
D)  cyclical 
A)  frictional 
B)  structural 
C)  natural 
D)  cyclical

Question 17

Refer to the information provided in Table 7.6 below to answer the questions that follow.
Table 7.6  
-Refer to Table 7.6. If 2015 is the base year, the inflation rate between 2015 and 2016 is

Accepted Answer

A)  13.8%. 
B)  12.2%. 
C)  9.4%. 
D)  7.0%. 
A)  13.8%. 
B)  12.2%. 
C)  9.4%. 
D)  7.0%.

Question 18

Which of the following is not a desirable characteristic in an economy?

Accepted Answer

A)  growing per-capita output 
B)  rapid increase in the general price level 
C)  low unemployment 
D)  population growing slower than output 
A)  growing per-capita output 
B)  rapid increase in the general price level 
C)  low unemployment 
D)  population growing slower than output

Question 19

Refer to the information provided in Table 7.5 below to answer the questions that follow.
Table 7.5  
-Refer to Table 7.5 If 2015 is the base year, the price index in 2016 is

Accepted Answer

A)  86.1. 
B)  93.6. 
C)  106.4. 
D)  116.1. 
A)  86.1. 
B)  93.6. 
C)  106.4. 
D)  116.1.

Question 20

The real interest rate is the difference between ________ and ________.

Accepted Answer

A)  the interest rate on a loan; the inflation rate 
B)  nominal interest rate; depreciation 
C)  inflation rate; GDP deflator 
D)  frictional inflation rate; structural inflation rate 
A)  the interest rate on a loan; the inflation rate 
B)  nominal interest rate; depreciation 
C)  inflation rate; GDP deflator 
D)  frictional inflation rate; structural inflation rate

Exam 7: Unemployment, Inflation, and Long-Run Growth

Most economists consider the GDP deflator as ________ of inflationary pressures in the economy.

Refer to the information provided in Table 7.6 below to answer the questions that follow. Table 7.6 -Refer to Table 7.6. If 2014 is the base year, the price index in 2016 is

Related to the Economics in Practice on p. 133: The Consumer Price Index in the United States was 207.3 in 2007, 215.3 in 2008 and 214.5 in 2009. If a retiree's pension is tied to the CPI, her monthly pension check would have ________ from 2007 to 2008, and ________ from 2008 to 2009.

Refer to the information provided in Table 7.5 below to answer the questions that follow. Table 7.5 -Refer to Table 7.5. If 2014 is the base year, the inflation rate between 2014 and 2015 is ________%, and the inflation rate between 2015 and 2016 is ________%.

In economics, the mental or physical skills people have is called

Refer to the information provided in Table 7.1 below to answer the questions that follow. Table 7.1 -Refer to Table 7.1. The labor-force participation rate is

The number of people classified as employed is 260,000 and the number of people classified as unemployed is 30,000. The size of the labor force

If the price index in 2015 is 132 and the price index in 2016 is 114, the rate of inflation between 2015 and 2016 is

Telephone operators who have lost their jobs as a result of computerized switchboards are an example of

If the CPI in period 1 is 125 and the CPI in period 2 is 150, then the rate of inflation between period 1 and period 2 is

Classifying discouraged workers as unemployed would

When 100 people who had previously stopped looking for jobs now decide to look for jobs, the

Refer to the information provided in Table 7.6 below to answer the questions that follow. Table 7.6 -Refer to Table 7.6. If 2015 is the base year, the inflation rate between 2014 and 2015 is

The broadest-based price index available is the

If your income is fixed and the economy experiences inflation, your ability to purchase goods and services rises.

Estimates for the ________ rate of unemployment that routinely occurs in the United States range from 4 to 6 percent.

Refer to the information provided in Table 7.6 below to answer the questions that follow. Table 7.6 -Refer to Table 7.6. If 2015 is the base year, the inflation rate between 2015 and 2016 is

Which of the following is not a desirable characteristic in an economy?

Refer to the information provided in Table 7.5 below to answer the questions that follow. Table 7.5 -Refer to Table 7.5 If 2015 is the base year, the price index in 2016 is

The real interest rate is the difference between ________ and ________.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

Related to the Economics in Practice on p. 133: The Consumer Price Index in the United States was 207.3 in 2007, 215.3 in 2008 and 214.5 in 2009. If a retiree's pension is tied to the CPI, her monthly pension check would have from 2007 to 2008, and from 2008 to 2009.

Refer to the information provided in Table 7.5 below to answer the questions that follow. Table 7.5 -Refer to Table 7.5. If 2014 is the base year, the inflation rate between 2014 and 2015 is %, and the inflation rate between 2015 and 2016 is %.

The real interest rate is the difference between and .