Question 1

Suppose there are currently 100 people unemployed, 1500 people employed, and 2000 people in the working age population. The labor force participation rate equals 100 times

Accepted Answer

A)   100/1500.
B)   1600/2000.
C)   100/1600.
D)   1500/2000. B

Question 2

The unemployment rate measures the percentage of people in the labor force who canʹt find a job.

Accepted Answer

A) True 
 B)False  True

Question 3

The ________equals the number of________ .

Accepted Answer

A)   labor force; unemployed and employed persons
B)   unemployment rate; people unemployed
C)   working age population; employed persons
D)   labor force; persons over 16 years old A

Question 4

Using the official measure of unemployment, which of the following would NOT be counted as unemployed?

Accepted Answer

A)   a person who is waiting to be called back to a job after having been laid off
B)   a person who is waiting to start a new job in the next 30 days
C)   a person who is not working but who has tried to find a job in the past week
D)   a person who performs traditional housework and does not work outside the home for pay

Question 5

Which population category equals the sum of employed and unemployed people?

Accepted Answer

A)   not in the labor force
B)   working-age population
C)   labor force
D)   young and institutionalized

Question 6

If nominal GDP is $230 for a period and real GDP is $200 for the same period, what is the GDP deflator for this period?

Accepted Answer

The answer of If nominal GDP is $230 for a...

Question 7

Explain the relationship between real GDP and potential GDP and between the unemployment rate and the natural unemployment rate as the economy moves through a business cycle.

Accepted Answer

The answer of Explain the relationship between real GDP and...

Question 8

If a worker is temporarily laid off because the economy is in a recession,

Accepted Answer

A)   cyclical unemployment increases.
B)   structural unemployment increases.
C)   frictional unemployment increases.
D)   the size of the labor force rises.

Question 9

ABC news in Australia reported that the average annual wage in 2008 was $13,308. To calculate the real wage rate in Australia, you would need to know

Accepted Answer

A)   the core inflation rate in Australia in 2008.
B)   Australiaʹs inflation rate between 2007 and 2008.
C)   Australiaʹs price level in 2008.
D)   the exchange rate between the US dollar and the Australian dollar.

Question 10

Which of the following decreases the official U-3 unemployment rate?

Accepted Answer

A)   Young people graduate from college and start to look for their first full -time job.
B)   Workers leave the labor force.
C)   More women enter the labor force and seek jobs.
D)   None of the above because they all increase or do not change the unemployment rate.

Question 11

Give an example of a cyclically unemployed person.

Accepted Answer

The answer of Give an example of a cyclically unemployed...

Question 12

A recession causes a decrease in the demand for housing, resulting in substantial layoffs in the construction industry. The people laid off are considered

Accepted Answer

A)   seasonally unemployment.
B)   cyclically unemployment.
C)   structurally unemployment.
D)   frictionally unemployment.

Question 13

An article in the Financial Times reports on a trend by college students to take a year off after graduation given the lack of success in finding a job. ʺIn a survey published last month by TMP Worldwide... 54 per cent of the final-year undergraduate interviewees were thinking about taking a gap year and one in 10 was planning to wait for a year to escape the financial chaos and wait for the economy to either improve or for the picture to become clearer.ʺ
These choices add to the fluctuations seen in the as workers leave the labor force given their unsuccessful job searches.

Accepted Answer

A)   efficiency wage
B)   employment rate
C)   labor force participation rate
D)   inflation rate

Question 14

Suppose the working-age population is 220 million, the labor force is 150 million, and the unemployment rate is 10 percent. The number of unemployed people is

Accepted Answer

A)   37 million.
B)   22 million.
C)   15 million.
D)   7 million.

Question 15

An example of the new goods bias in the CPI is the

Accepted Answer

A)   introduction of hybrid automobiles, vehicles that were not made until recently.
B)   decreasing popularity of SUVs as the price of gasoline has risen.
C)   switch from traditional car dealerships to low-cost Internet car buying services.
D)   introduction of higher quality brakes as standard equipment on new cars.

Question 16

$$\begin{array} { | l | l | l | l | } 
\hline \begin{array} { l } 
\text { Total } \
\text { population } \
\text { (millions) }
\end{array} & \begin{array} { l } 
\text { Currently } \
\text { employed } \
\text { (millions) }
\end{array} & \begin{array} { l } 
\text { Not working } \
\text { and looking } \
\text { for work } \
\text { (millions) }
\end{array} & \begin{array} { l } 
\text { Want to work but } \
\text { no longer looking } \
\text { for work } \
\text { (millions) }
\end{array} \
\hline 80 & 40 & 2 & 4 \
\hline
\end{array}$$
-In the table above, the official U-3 unemployment rate is

Accepted Answer

A)   50 percent.
B)   15 percent.
C)   5 percent.
D)   10 percent.

Question 17

Assume the inflation rate falls from 4 percent to 2 percent. This means that

Accepted Answer

A)   real GDP is decreasing.
B)   the economy is experiencing deflation.
C)   the price level is increasing more slowly.
D)   the price level has fallen.

Question 18

What are the three stages of constructing the CPI?

Accepted Answer

The answer of What are the three stages of constructing...

Question 19

If this yearʹs price level exceeds last yearʹs,

Accepted Answer

A)   deflation is occurring.
B)   no relative price changes are occurring.
C)   the inflation rate between these years has been positive.
D)   the inflation rate is accelerating.

Question 20

If this year the price level is 135 and last year it was 125, the inflation rate is__________

Accepted Answer

A)   8 percent.
B)   12 percent.
C)   10 percent.
D)   none of the above

Exam 5: Monitoring Jobs and Inflation