Deck 6: Elasticity

Question 1

"Full employment" is said to exist when the actual unemployment rate is zero.

Answer 1

False

Question 2

Most unemployed persons fall into the category of job loser.

Answer 2

True

Question 3

The sum of the unemployment rate and the employment rate always equals 100 percent.

Answer 3

False

Question 4

If the Bureau of Labor Statistics considers Jessica to be a discouraged worker,then she is not counted as unemployed for purposes of computing the official unemployment rate.

Question 5

A seamstress who quits her job in Houston and moves to New York where additional seamstresses are needed is said to be frictionally unemployed.

Question 6

The cyclical unemployment rate can never be negative.

Question 7

A worker is ​underemployed​ if she is working at a job for which her skills far exceed the requirements for the job.

Question 8

For all practical purposes,a discouraged worker is an unemployed person because a discouraged worker is not working.

Question 9

The CPI in the base year is always equal to 100.

Question 10

A common measure of inflation is the percentage change in the CPI of adjacent years.

Question 11

Discouraged workers are not counted as unemployed because they are working.

Question 12

The federal government agency that is responsible for determining the inflation rate and the unemployment rate is the Federal Reserve.

Question 13

If Carlos is waiting to be called back to his job from which he has been temporarily laid off,the Bureau of Labor Statistics will classify him as unemployed.

Question 14

Jamaal lost his job when a mechanical device replaced people with his skills.If Jamaal's skills are non-transferable,he would be considered to be structurally unemployed.

Question 15

The base year is always the year in which prices were the lowest.

Question 16

If the unemployment rate drops,then it necessarily follows that some of the people who were once unemployed are now employed.

Question 17

Structural unemployment results primarily from automation and long-lasting changes in demand.

Question 18

Some economists argue that the recent relatively high rate of unemployment has resulted in part from the fact that a part of the workforce has not made the adjustment to new technologies.

Question 19

The CPI is based on a representative group of goods called the market basket.

Question 20

If Jorge is temporarily absent from his regular job because of an industrial dispute,the Bureau of Labor Statistics will classify him as unemployed.

Question 21

When the unemployment rate is equal to the natural unemployment rate,full employment exists.

Question 22

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 23

Suppose that 1982 is the base year for the Consumer Price Index (CPI)and in 2019 the CPI is 270.What does this "270" mean?

A) What cost $100 in 1982 on average cost 270 times as much in 2019.
B) What cost $100 in 1982 on average cost $270 in 2019.
C) What cost $100 in 1982 on average cost 0.27 times as much in 2019.
D) What cost $100 in 1982 on average cost $27 more in 2019

Question 24

Natural unemployment is caused by frictional and structural factors in the economy.

Question 25

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 26

Suppose that 1983 is the base year for the Consumer Price Index (CPI)and in 2019 the CPI is 260.What does this "260" mean?

A) What cost $100 in 1983 on average cost 2.60 times as much in 2019.
B) What cost $100 in 1983 on average cost $260 more in 2019.
C) What cost $100 in 1983 on average cost 0.26 times as much in 2019.
D) What cost $100 in 1983 on average cost $26 more in 2019.

Question 27

Suppose that 1983 is the base year for the Consumer Price Index (CPI)and in 2019 the CPI is 254.What does this "254" mean?

A) What cost $100 in 1983 on average cost 254 times as much in 2019.
B) What cost $100 in 1983 on average cost $254 more in 2019.
C) What cost $100 in 1983 on average cost 100/254 (or 0.39)times as much in 2019.
D) What cost $100 in 1983 on average cost $154 more in 2019.

Question 28

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

Question 29

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.

Question 30

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 31

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 32

In year 1 the CPI is 140,and in year 2 the CPI is 154.From year 1 to year 2,Marcy's salary rises from $43,000 to $48,000,and Daphne's salary rises from $65,000 to $70,000.Who is "more than keeping up with inflation"?

A) Marcy
B) Daphne
C) both Marcy and Daphne
D) neither Marcy nor Daphne

Question 33

In year 1 the CPI is 174,and in year 2 the CPI is 185.If Sarah's salary was $49,600 in year 1,what is the minimum salary he must earn in year 2 to "keep up with inflation"?

A) $54,004
B) $51,942
C) $50,508
D) $52,736

Question 34

Valerie works 23 unpaid hours per week at her parent's restaurant,therefore the Bureau of Labor Statistics would count her as employed.

Question 35

The CPI was 154 in one year and 165 the following year.How much did prices rise between these two years?

A) 5.46 percent
B) 6.67 percent
C) 7.14 percent
D) 0.07 percent

Question 36

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 37

The sum of the unemployment rate and the labor force participation rate always equals 100 percent.

Question 38

In year 1 the CPI is 175,and in year 2 the CPI is 189.If Dennis's salary was $82,000 in year 1,what is the minimum salary he must earn in year 2 to "keep up with inflation"?

A) $83,550
B) $92,360
C) $85,750
D) $88,560

Question 39

If the CPI is 100 in the base year and 106 in the current year,how much did prices rise between the base year and the current year?

A) 6 percent
B) 106 percent
C) 1.06 percent
D) 0.06 percent
E) 60 percent

Question 40

Because discouraged workers are not considered unemployed,the unemployment rate may be biased downward.

Question 41

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

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

Question 42

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 43

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 44

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 45

If a person worked at least 15 hours per week as an "unpaid" worker in a restaurant owned by her family,how is she classified by the Bureau of Labor Statistics?

A) as not in the labor force
B) as an unemployed person
C) as an employed person
D) as a discouraged worker

Question 46

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 47

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

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

Question 48

If a person is waiting to be called back to a job from which she has been laid off,how is she classified by the Bureau of Labor Statistics?

A) as not in the labor force
B) as an unemployed person
C) as an employed person
D) as a discouraged worker

Question 49

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 50

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 51

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

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

Question 52

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 53

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 54

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 55

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 of 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 56

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 57

In order to be classified as unemployed,a person must be not working,

A) have been actively looking for work within the past four weeks,and currently be available for work.
B) and currently be available for work,regardless of whether one is actively looking for work or not.
C) and be waiting to be called back to work from a temporary layoff.
D) and actively looking for work within the past year.
E) ​a or c

Question 58

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 59

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

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

Question 60

If a person did any work as a paid employee during the Bureau of Labor Statistics survey reference week,how is she classified?

A) as an employed person
B) as not in the labor force
C) as an unemployed person
D) as part of the labor force
E) ​a and d

Question 61

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 62

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

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

Question 63

In an economy with a population of 100 million persons,42 million hold civilian jobs and 6 million are not working but are looking for jobs.The number counted as unemployed is

A) 48 million.
B) 6 million.
C) 36 million.
D) 52 million.
E) 58 million.

Question 64

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 65

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 66

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 67

In an economy with 200 million people,140 million hold civilian jobs and 9 million are not working but are looking for jobs.The unemployment rate is

A) 6.4%
B) 6.0%.
C) 9.2%.
D) 27.4%.
E) 4.5%

Question 68

In an economy with a population of 300 million persons,130 million hold civilian jobs and 8 million are not working but are looking for jobs.The unemployment rate is

A) 6.2 percent.
B) 8.6 percent.
C) 2.7 percent.
D) 9.4 percent.
E) 5.8 percent.

Question 69

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 70

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 71

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 72

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 a job.The number of persons in the civilian labor force is

A) 51 million.
B) 60 million.
C) 91 million.
D) 49 million..

Question 73

In an economy with a population of 100 million persons,42 million hold civilian jobs and 6 million are not working but are looking for a job.The unemployment rate is

A) 12.5%.
B) 87.5%
C) 6%
D) 14.29%
E) There is not enough information to answer this question.

Question 74

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 75

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 76

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 77

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 78

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

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

Question 79

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 80

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

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