Deck 6: Macroeconomic Measurements: Prices and Unemployment

Question 1

Exhibit 6-1

Refer to Exhibit 6-1.Prices rose by __________ percent from Year 2 to Year 3.

A) 3.39
B) 0.023
C) 3.28
D) 2.22
E) 2.27

Answer 1

E

Question 2

One measure of the inflation rate is the

A) sum of the CPIs of adjacent years.
B) percentage change in the CPI of adjacent years.
C) percentage change in the Real GDP of adjacent years.
D) GDP minus the Real GDP in a year.

Answer 2

B

Question 3

The CPI was 238 in one year and 244 the following year.How much did prices rise between these two years?

A) 2.46 percent
B) 5.50 percent
C) 2.52 percent
D) 0.03 percent

Answer 3

C

Question 4

Suppose the market basket consists of 100X,200Y,and 300Z.Current-year prices are $5 for each unit of X,$2 for each unit of Y,and $3 for each unit of Z.Base-year prices are $2 for each unit of X,Y,and Z.What is the approximate CPI in the current year?

A) 15
B) 70.20
C) 1,200
D) 150

Question 5

Exhibit 6-1

Refer to Exhibit 6-1.Prices rose by approximately __________ percent from Year 1 to Year 5.

A) 10.6
B) 9.6
C) 14.3
D) 4.5

Question 6

According to the text,the top grossing movie in the US for all time in terms of domestic gross receipts as of June 2012 was ______________________,while the movie with the highest receipts in today's dollars is _______________________.

A) Star Wars; Titanic
B) Titanic; Star Wars.
C) Star Wars; Gone with the Wind
D) Avatar; Gone With the Wind
E) Avatar; Snow White and the Seven Dwarfs

Question 7

Suppose that 1982 is the base year for the Consumer Price Index (CPI)and in 2007 the CPI was 190.What does this "190" mean?

A) What cost $100 in 1982 on average cost 190 times as much in 2007.
B) What cost $100 in 1982 on average cost $190 in 2007.
C) What cost $100 in 1982 on average cost 0.19 times as much in 2007 (that is, it cost $19 in 2007).
D) What cost $100 in 1982 on average cost $19 more in 2007.

Question 8

The base year is the year

A) in which prices are unstable.
B) in which prices are lowest.
C) in which prices are highest.
D) that serves as a reference point or benchmark.
E) in which nominal output is largest.

Question 9

According to the text,the top grossing movie in the US for all time,in today's dollars,is

A) Star Wars
B) Titanic
C) Avatar
D) Gone With the Wind
E) Snow White and the Seven Dwarfs

Question 10

Exhibit 6-1

Refer to Exhibit 6-1.Prices rose by __________ percent from Year 4 to Year 5.

A) 3.90
B) 3.75
C) 4.30
D) 5.90

Question 11

The civilian non-institutional population consists of everyone in the population who is

A) at least 16 years of age, in the armed forces, or institutionalized.
B) at least 16 years of age.
C) not in the armed forces.
D) not institutionalized.
E) b, c, and d

Question 12

If the CPI is 100 in the base year and 112 in the current year,how much did prices rise between the base year and the current year?

A) 12 percent
B) 112 percent
C) 1.2 percent
D) 0.12 percent

Question 13

In year 1 the CPI is 140,and in year 2 the CPI is 160.From year 1 to year 2,Chiang's salary rises from $42,000 to $47,000,and Marta's salary rises from $55,000 to $66,000.Who is "more than keeping up with inflation"?

A) Marta
B) Chiang
C) both Marta and Chiang
D) neither Marta nor Chiang

Question 14

Suppose that 1983 is the base year for the Consumer Price Index (CPI)and in 2008 the CPI was 220.What does this "220" mean?

A) What cost $100 in 1983 on average cost 2.20 times as much in 2008.
B) What cost $100 in 1983 on average cost $220 more in 2008.
C) What cost $100 in 1983 on average cost 0.22 times as much in 2008 (that is, it cost $22 in 2008).
D) What cost $100 in 1983 on average cost $22 more in 2008.

Question 15

The civilian non-institutional population can be broken down into two groups:

A) employed persons and unemployed persons.
B) persons working and persons not working.
C) persons working in service jobs and persons working in manufacturing jobs.
D) persons not in the labor force and persons in the labor force.

Question 16

In year 1 the CPI is 174,and in year 2 the CPI is 190.If Sarah's salary was $49,800 in year 1,what salary in year 2 would cause her to exactly "keep up with inflation"?

A) $34,004
B) $42,942
C) $40,508
D) $54,379

Question 17

In year 1 the CPI is 181,and in year 2 the CPI is 195.If Dennis's salary was $95,000 in year 1,what is the minimum salary he must earn in year 2 to "keep up with inflation"?

A) $112,500
B) $102,348
C) $105,750
D) $88,180

Question 18

Suppose that 1983 is the base year for the Consumer Price Index (CPI)and in 2012 the CPI was 226.What does this "226" mean?

A) What cost $100 in 1983 on average cost 226 times as much in 2012.
B) What cost $100 in 1983 on average cost $226 more in 2012.
C) What cost $100 in 1983 on average cost 100/226 (or 0.44) times as much in 2012 (that is, it will cost $22 in 2012).
D) What cost $100 in 1983 on average cost $126 more in 2012.

Question 19

Exhibit 6-1

Refer to Exhibit 6-1.Prices rose by __________ percent from Year 1 to Year 2.

A) 1.38
B) 0.14
C) 1.29
D) 1.94
E) 3.00

Question 20

Suppose there are five goods in the economy,A-E.The current-year quantity of each is 10A,20B,30C,40D,and 50E.Current-year prices are $1 for each unit of A,$2 for each unit of B,$3 for each unit of C,$4 for each unit of D,and $5 for each unit of E.Base-year prices are $1 for each good.Real GDP in the current year equals

A) $100.
B) $130.
C) $150.
D) $180.
E) $550.

Question 21

Suppose the civilian non-institutional population equals 250,000; there are 132,500 employed persons and 10,000 unemployed persons.How many people are not in the labor force?

A) 122,500
B) 77,500
C) 63,500
D) 107,500

Question 22

Exhibit 6-2

Refer to Exhibit 6-2.How many unemployed persons are there in year 1?

A) 25 million
B) 50 million
C) 75 million
D) 175 million
E) 200 million

Question 23

If a person worked at least 15 hours per week as an "unpaid" worker on a family farm,how is she classified?

A) as not in the labor force
B) as an unemployed person
C) as an employed person
D) none of the above

Question 24

Exhibit 6-2

Refer to Exhibit 6-2.The employment rate in year 1 is

A) 12 1/2 percent.
B) 70 percent.
C) 87 1/2 percent.
D) 30 percent.
E) 10 percent.

Question 25

If a person is waiting to be called back to a job from which she has been laid off,how is she classified?

A) as not in the labor force
B) as an unemployed person
C) as an employed person
D) none of the above

Question 26

Exhibit 6-2

Refer to Exhibit 6-2.The labor force participation rate in year 1 is

A) 12 1/2 percent.
B) 80 percent.
C) 87 1/2 percent.
D) 70 percent.
E) 10 percent.

Question 27

Exhibit 6-2

Refer to Exhibit 6-2.The unemployment rate in year 1 is

A) 12 1/2 percent.
B) 70 percent.
C) 87 1/2 percent.
D) 30 percent.
E) 10 percent.

Question 28

In order to be classified as unemployed,a person must

A) not have a job, have been actively looking for work within the past four weeks, and currently be available for work.
B) not have a job, and currently be available for work.
C) actively have looked for work within the past six weeks.
D) not have a job.

Question 29

Exhibit 6-2

Refer to Exhibit 6-2.How many people are not in the labor force in year 1?

A) 25 million
B) 50 million
C) 75 million
D) 175 million
E) 200 million

Question 30

The unemployment rate equals the

A) number of employed persons divided by the number of unemployed persons.
B) number of unemployed persons divided by the civilian non-institutional population.
C) number of unemployed persons divided by the civilian labor force.
D) sum of unemployed persons and discouraged workers divided by the civilian labor force.

Question 31

A person is unemployed if he

A) is a member of the civilian labor force, out of work, and actively seeking work.
B) is 15 years old and seeking his first job.
C) is out of work, available for work, but not actively seeking work.
D) all of the above

Question 32

Exhibit 6-2

Refer to Exhibit 6-2.How many people are unemployed in year 2?

A) 200 million
B) 50 million
C) 75 million
D) 175 million
E) 100 million

Question 33

The employment rate equals the number of

A) employed persons divided by the number of unemployed persons.
B) unemployed persons divided by the civilian non-institutional population.
C) employed persons divided by the civilian labor force.
D) employed persons divided by the civilian non-institutional population.
E) none of the above

Question 34

Exhibit 6-2

Refer to Exhibit 6-2.The unemployment rate in year 2 is

A) 75 percent.
B) 33 1/3 percent.
C) 50 percent.
D) 66 2/3 percent.
E) 25 percent.

Question 35

Exhibit 6-2

Refer to Exhibit 6-2.The employment rate in year 2 is

A) 12 1/2 percent.
B) 75 percent.
C) 87 1/2 percent.
D) 30 percent.
E) 50 percent.

Question 36

Suppose the civilian non-institutional population equals 100,000 persons; the civilian labor force equals 75,000 persons; there are 70,000 employed persons and 5,000 unemployed persons.If 5,000 persons who are currently "not in the labor force" decide to join the civilian labor force,and 3,000 pf them are unemployed,then

A) both the unemployment and the employment rate rise.
B) both the unemployment and the employment rate fall.
C) the unemployment rate rises and the employment rate falls.
D) the unemployment rate falls and the employment rate rises.

Question 37

Persons who are retired or engaged in own-home housework are considered to be in which of the following categories?

A) in the civilian labor force
B) not in the labor force
C) employed
D) unemployed

Question 38

Exhibit 6-2

Refer to Exhibit 6-2.How many people are not in the labor force in year 2?

A) 200 million
B) 50 million
C) 75 million
D) 175 million
E) 100 million

Question 39

If a person did at least one hour of work as a paid employee during the survey week,how is she classified?

A) as an employed person
B) as not in the labor force
C) as an unemployed person
D) none of the above

Question 40

A person in the civilian labor force falls into one of two categories:

A) a person who works in a service industry or a person who works in a manufacturing industry.
B) unemployed or employed.
C) disemployed or unemployed.
D) a self-employed worker or a non-self-employed worker.

Question 41

Exhibit 6-2

Refer to Exhibit 6-2.The employment rate in year 4 is

A) 12.5 percent.
B) 7.2 percent.
C) 72 percent.
D) 10 percent.
E) 90 percent.

Question 42

Exhibit 6-2

Refer to Exhibit 6-2.How many people are not in the labor force in year 3?

A) 50 million
B) 100 million
C) 150 million
D) 350 million
E) 400 million

Question 43

The cyclical unemployment rate is defined as the __________ unemployment rates.

A) sum of the structural and the frictional
B) difference between the structural and the frictional
C) difference between the existing (actual) and the natural
D) sum of the natural and the frictional

Question 44

The unemployment due to changes in the types of skills employers require is called __________ unemployment.

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

Question 45

Exhibit 6-2

Refer to Exhibit 6-2.The labor force participation rate in year 3 is

A) 12 1/2 percent.
B) 70 percent.
C) 80 percent.
D) 30 percent.
E) 50 percent.

Question 46

Exhibit 6-2

In an economy with a population of 100 million persons,40 million hold civilian jobs and 9 million are not working but are looking for jobs.The number counted as unemployed is

A) 91 million.
B) 9 million.
C) 51 million.
D) 40 million.
E) 49 million.

Question 47

Exhibit 6-2

Refer to Exhibit 6-2.The employment rate in year 3 is

A) 12 1/2 percent.
B) 33 1/3 percent.
C) 70 percent.
D) 66 2/3 percent.
E) 25 percent.

Question 48

Exhibit 6-2

In an economy with a population of 100 million persons,44 million hold civilian jobs and 6 million are not working but are looking for jobs.The unemployment rate is

A) 6.0 percent.
B) 13.6 percent.
C) 7.3 percent.
D) 9.4 percent.
E) 12.0 percent.

Question 49

Exhibit 6-2

Refer to Exhibit 6-2.The labor force participation rate in year 4 is

A) 12 1/2 percent.
B) 72 percent.
C) 87 1/2 percent.
D) 30 percent.
E) 80 percent.

Question 50

Exhibit 6-2

Refer to Exhibit 6-2.The unemployment rate in year 4 is

A) 12 1/2 percent.
B) 72 percent.
C) 87 1/2 percent.
D) 10 percent.
E) 90 percent.

Question 51

Unemployment that arises as a result of the time it takes for unemployed people to locate a job utilizing their transferable skills is called __________ unemployment.

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

Question 52

Exhibit 6-2

In an economy with a population of 100 million persons,50 million hold civilian jobs and 20 million are not working but are looking for a job.The unemployment rate is

A) 28.6%.
B) 20%
C) 25%
D) 13.33%
E) There is not enough information to answer this question.

Question 53

Exhibit 6-2

In an economy with 100 million people,70 million hold civilian jobs and 19 million are not working but are looking for jobs.The unemployment rate is

A) 12.86%
B) 21.35%.
C) 9.19%.
D) 27.14%.
E) 2.87%

Question 54

"Full employment" is said to exist when the unemployment rate equals

A) zero.
B) the cyclical unemployment rate.
C) the structural unemployment rate.
D) the natural unemployment rate.

Question 55

Exhibit 6-2

Refer to Exhibit 6-2.The unemployment rate in year 3 is

A) 12 1/2 percent.
B) 33 1/3 percent.
C) 50 percent.
D) 66 2/3 percent.
E) 25 percent.

Question 56

Exhibit 6-2

Refer to Exhibit 6-2.How many people are not in the labor force in year 4?

A) 80 million
B) 100 million
C) 150 million
D) 350 million
E) 200 million

Question 57

In many large retail stores,price markdowns are now determined by computer.The "middle managers" who used to make these decisions personally became __________ unemployed.

A) frictionally
B) structurally
C) naturally
D) cyclically

Question 58

Exhibit 6-2

Refer to Exhibit 6-2.How many unemployed persons are there in year 4?

A) 80 million
B) 100 million
C) 150 million
D) 350 million
E) 400 million

Question 59

Exhibit 6-2

Refer to Exhibit 6-2.How many unemployed persons are there in year 3?

A) 50 million
B) 100 million
C) 150 million
D) 350 million
E) 400 million

Question 60

Exhibit 6-2

In an economy with a population of 100 million persons,50 million hold civilian jobs and 20 million are not working but are looking for a job.The number of persons in the civilian labor force is

A) 50 million.
B) 70 million.
C) 170 million.
D) 180 million..

Question 61

If the cyclical unemployment rate is negative,then the

A) natural unemployment rate is less than the actual unemployment rate in the economy.
B) natural unemployment rate is greater than the actual unemployment rate in the economy.
C) structural unemployment rate is greater than the frictional unemployment rate.
D) structural unemployment rate is less than the frictional unemployment rate.
E) a and d

Question 62

Look at the following data: The frictional unemployment rate is 3 percent,the natural unemployment rate is 6.5 percent,and the cyclical unemployment rate is 2.4 percent.The structural unemployment rate is __________ percent and the actual unemployment rate (in this economy)is __________ percent.

A) 3; 8.9
B) 3.5; 8.9
C) 3.5; 9.5
D) 5.4; 2.4
E) none of the above

Question 63

A market basket is made up of three goods,10X,12Y,and 18Z.The prices in the base year are $1.20,$2.10,and $3.25,respectively.The prices in the current year are $1.44,$2.23,and $3.88.What is the approximate consumer price index in the current year?

A) 103
B) 111
C) 116
D) 110
E) 96

Question 64

A(n)__________ is a person who was previously employed,hasn't worked for some time,and is currently reentering the labor force.

A) discouraged worker
B) entrant
C) reentrant
D) job loser
E) job leaver

Question 65

Assume that Ms.Sawyer's salary is $22,000,up from $20,000 last year,while the CPI is 165 this year,up from 150 last year.This means that Ms.Sawyer's real income has

A) increased.
B) decreased.
C) stayed the same.
D) It depends on which year is the base year.

Question 66

If the CPI is 143 in year 1 and 149 in year 2,what is the approximate percentage change in prices between the two years?

A) 3.9 percent
B) 4.2 percent
C) 15.7 percent
D) 11.4 percent
E) 6.0 percent

Question 67

Which of the following statements is true?

A) Base year prices are necessarily higher than current year prices.
B) The CPI in the base year is 100.
C) If the CPI is 112 in year 1 and 123 in year 2, prices have risen by approximately 9.8 percent between the two years.
D) b and c
E) a, b, and c

Question 68

Look at the following data: Employed persons = 110 million; civilian labor force = 135 million persons; civilian noninstitutional population = 190 million.The unemployment rate is __________ percent and the employment rate is __________ percent.

A) 10; 69
B) 8; 57.9
C) 18.5; 57.9
D) 18.5; 81.5
E) 12; 88

Question 69

If the CPI was 196.5 in 2005 and 172.2 in 2000,by what percentage did prices rise during the period 2000-2005?

A) 0.10 percent
B) 6.43 percent
C) 10 percent
D) 14.1 percent

Question 70

Smith's income was $50,000 in year 1 and $55,600 in year 2.The CPI was 114 in year 1 and 124 in year 2.What was the approximate percentage change in Smith's real income between the two years?

A) -2.2 percent
B) +3.4 percent
C) -1.7 percent
D) +5.6 percent
E) +2.2 percent

Question 71

Which of the following statements is false?

A) The sum of the unemployment rate and the employment rate always equals 100 percent.
B) The sum of the number of employed persons and the number of unemployed persons equals the civilian non-institutional population.
C) The labor force participation rate equals the number of persons in the civilian labor force divided by the number of persons in the total population.
D) a and b
E) a, b and c

Question 72

A movie star was paid $1 million in 1960 to do a movie.The CPI was 29.3 in 1960 and the CPI in 2012 was 226.665.Approximately how much did the movie star earn in 2012 dollars?

A) $0.87 million
B) $8.66 million
C) $6.44 million
D) $7.74 million

Question 73

A __________ is a person who was employed in the civilian labor force and was either fired or laid off.

A) new entrant
B) reentrant
C) job leaver
D) job fixer
E) none of the above

Question 74

Is it possible for the economy to be at full employment and still have some people who are unemployed?

A) No, full employment means that no one is unemployed.
B) Yes, since full employment exists if the economy is operating at the natural unemployment rate and there is always some natural unemployment.
C) Yes, since full employment exists if the economy is operating at the frictional unemployment rate and there is always some frictional unemployment.
D) Yes, since full employment equals the sum of the cyclical unemployment rate and the natural unemployment rate, and there is always some cyclical unemployment.
E) none of the above

Question 75

Suppose that the price index in 1999 was 170 and your salary was $44,000.Suppose in 2016 the consumer price index will be 290.What salary will you have to earn in 2016 in order to equal your 1999 real income?

A) $66,000
B) $77,647
C) $75,059
D) $83,209

Question 76

Good X sold for $40 in 1957.The CPI in 1957 was 27.6 and the CPI in 2009 was 214.537.What was the price of good X in 2009 dollars?

A) $514.60
B) $270.92
C) $1,201.60
D) $310.92

Question 77

The movie "Return of the Jedi" earned $264 million in 1983 when it was released.The CPI in 1983 was 97.8 and the CPI in 2012 was 226.665.Approximately how much did the movie earn in 2012 dollars?

A) $590 million
B) $612 million
C) $2.12 million
D) $123 million
E) $150 million

Question 78

Look at the following data: Total population = 230 million; employed persons = 80 million; unemployed persons = 8 million.The unemployment rate is approximately __________ and the employment rate __________.

A) 9.1 percent; cannot be determined
B) 10 percent; is 90 percent
C) 8.2 percent; is 34 percent
D) 11 percent; is 38 percent
E) 9.1 percent; 90.9 percent

Question 79

Jones lost his job in industry A,but he has skills that can be transferred to industry B (which is currently hiring).Smith lost a job in industry C,but his skills cannot be transferred to industry B or to any other industry.Jones is __________ unemployed and Smith is __________ unemployed.

A) structurally; frictionally
B) structurally; structurally
C) frictionally; frictionally
D) frictionally; structurally

Question 80

The answer is "a person employed in the civilian labor force who quits his or her job." The question is:

A) Who is a job loser?
B) Who is an entrant?
C) Who is a reentrant?
D) Who is a job leaver?
E) Who is a discouraged worker?