Question 1

Use the table below to answer the following questions.
Table 5.3.1
Suppose a simple economy produces three goods only.The price and output data for two years are shown below.
 
-Refer to Table 5.3.1.The reference base period is 2002.The CPI in 2017 is

Accepted Answer

A) 63. 
B) 1,340. 
C) 158. 
D) 96. 
E) 100.

Question 2

Use the table below to answer the following questions.
Table 5.2.1
This table shows the answers given by interviewees to the Labour Force Survey. 
-In Table 5.2.1, which person is structurally unemployed?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) B and D

Question 3

Suppose that the natural unemployment rate is 4.5 percent and the actual unemployment rate is 3.5 percent.Then cyclical unemployment is

Accepted Answer

A) - 1 percent. 
B) 8 percent. 
C) 3.5 percent. 
D) 0 percent. 
E) 1 percent.

Question 4

In a country with a working- age population of 30 million, 20 million are employed, 2 million are unemployed, and 2 million of the employed are working part- time, half of whom wish to work full- time.The labour force participation rate is

Accepted Answer

A) 73.3 percent. 
B) 20 percent. 
C) 60 percent. 
D) 66.7 percent. 
E) 53.3 percent.

Question 5

If the CPI was 228 at the end of 2016 and 236 at the end of 2017, what was the inflation rate in 2017?

Accepted Answer

A) 3.5 percent 
B) 3.4 percent 
C) 236 percent 
D) 8 percent 
E) 4 percent

Question 6

Use the table below to answer the following questions.
Table 5.3.1
Suppose a simple economy produces three goods only.The price and output data for two years are shown below.
 
-Refer to Table 5.3.1.The reference base period is 2017.The CPI in 2002 is

Accepted Answer

A) 157. 
B) 63.6. 
C) 100. 
D) 129. 
E) 152.

Question 7

At full employment, there is no

Accepted Answer

A) structural unemployment. 
B) unemployment. 
C) frictional unemployment. 
D) cyclical unemployment. 
E) natural unemployment.

Question 8

Comparing the core inflation rate to the Consumer Price Index, the core inflation rate

Accepted Answer

A) excludes the volatile elements of the CPI. 
B) uses current period quantities, not base period quantities. 
C) measures all goods produced, not just consumer goods. 
D) includes volatile elements not in the CPI. 
E) controls for the biases of the CPI.

Question 9

In a recession, typically

Accepted Answer

A) unemployment decreases. 
B) the employment rate increases. 
C) the labour force participation rate does not change. 
D) the employment rate decreases. 
E) the labour force participation rate increases.

Question 10

If the inflation rate is positive, the price level in an economy is

Accepted Answer

A) falling slowly. 
B) rising. 
C) falling rapidly. 
D) constant. 
E) zero.

Question 11

In a country with a working- age population of 22 million, 18 million are employed, 2 million are unemployed, and 1 million of the employed are working part- time, half of whom wish to work full- time.The involuntary part- time rate is

Accepted Answer

A) 2.5 percent. 
B) 4.5 percent. 
C) 2.8 percent. 
D) 2.3 percent. 
E) 5 percent.

Question 12

Unemployment caused by permanently decreased demand for horse- drawn carriages is an example of

Accepted Answer

A) frictional unemployment. 
B) discouraged unemployment. 
C) cyclical unemployment. 
D) old- fashioned unemployment. 
E) structural unemployment.

Question 13

In a country with a working- age population of 22 million, 18 million are employed, 2 million are unemployed, and 1 million of the employed are working part- time, half of whom wish to work full- time.The unemployment rate is

Accepted Answer

A) 18.2 percent. 
B) 2 percent. 
C) 9.1 percent. 
D) 10 percent. 
E) 11.1 percent.

Question 14

Michael lost his job as a night security guard because he kept falling asleep at the job.Now he is looking for a new job.Michael is

Accepted Answer

A) frictionally unemployed. 
B) structurally unemployed. 
C) not unemployed. 
D) cyclically unemployed. 
E) not in the labour force.

Question 15

In a country with a working- age population of 30 million, 20 million are employed, 2 million are unemployed, and 2 million of the employed are working part- time, half of whom wish to work full- time.The employment rate is

Accepted Answer

A) 18 percent. 
B) 53.3 percent. 
C) 73.3 percent. 
D) 66.7 percent. 
E) 60 percent.

Question 16

Suppose a union and a firm agree to increase the wage rate by the same percentage as the increase in the Consumer Price Index.If the CPI increases by 5 percent, then the real income of workers will

Accepted Answer

A) decrease by 5 percent, accounting for bias in the calculation of the CPI. 
B) increase by less than 5 percent, accounting for bias in the calculation of the CPI. 
C) increase by more than 5 percent, accounting for bias in the calculation of the CPI. 
D) increase by 5 percent. 
E) remain unchanged, accounting for bias in the calculation of the CPI.

Question 17

Use the table below to answer the following questions.
Table 5.2.1
This table shows the answers given by interviewees to the Labour Force Survey. 
-In Table 5.2.1, which person is a discouraged searcher?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) none of them

Question 18

R2 is

Accepted Answer

A) long- term unemployment. 
B) the official unemployment rate. 
C) comparable to the official U.S.rate. 
D) short- term unemployment. 
E) the unemployment rate that adds discouraged searchers to the official rate.

Question 19

The employment rate is

Accepted Answer

A) the percentage of the labour force who are unemployed or employed. 
B) equal to 100 minus the unemployment rate. 
C) the percentage of the working- age population who are unemployed or employed. 
D) the percentage of the working- age population who are employed. 
E) the percentage of the labour force who are employed.

Question 20

Use the table below to answer the following questions.
Table 5.3.1
Suppose a simple economy produces three goods only.The price and output data for two years are shown below.
 
-Refer to Table 5.3.1.The reference base period is 2002.Which one of the following statements is true?

Accepted Answer

A) From 2002 to 2017, the cost of the market basket rose by 58 percent. 
B) The inflation rate in 2017 is greater than the inflation rate in 2002. 
C) It costs 158 times more in 2017 than it does in 2002 to buy the same market basket. 
D) The inflation rate in 2002 is greater than the inflation rate in 2017. 
E) All prices have risen by the same amount.

Exam 5: Monitoring Jobs and Inflation

Use the table below to answer the following questions. Table 5.3.1 Suppose a simple economy produces three goods only.The price and output data for two years are shown below. -Refer to Table 5.3.1.The reference base period is 2002.The CPI in 2017 is

Use the table below to answer the following questions. Table 5.2.1 This table shows the answers given by interviewees to the Labour Force Survey. -In Table 5.2.1, which person is structurally unemployed?