Question 1

Suppose that the CPI in 1999 was 125.2 and the CPI in 2000 was 139.1. The rate of inflation between 1999 and 2000 was:

Accepted Answer

A)  13.9%. 
B)  11.1%. 
C)  12.9%. 
D)  14.3%. 
A)  13.9%. 
B)  11.1%. 
C)  12.9%. 
D)  14.3%.

Question 2

The number of people unemployed equals:

Accepted Answer

A)  the labor force minus the number of people employed. 
B)  the labor force plus the number of people employed. 
C)  the number of people employed minus the labor force. 
D)  the number of people employed divided by the labor force. 
A)  the labor force minus the number of people employed. 
B)  the labor force plus the number of people employed. 
C)  the number of people employed minus the labor force. 
D)  the number of people employed divided by the labor force.

Question 3

Recall Application 2, "More Disability, Less Unemployment?" to answer the following questions:
-According to the application, the changes in the federal Disability Insurance program:

Accepted Answer

A)  made the program's benefits more generous for low- skilled workers. 
B)  made it easier to enter the program. 
C)  increased the value of healthcare services. 
D)  All of the above characterizes the changes in the program. 
A)  made the program's benefits more generous for low- skilled workers. 
B)  made it easier to enter the program. 
C)  increased the value of healthcare services. 
D)  All of the above characterizes the changes in the program.

Question 4

Overstating the actual change in prices has a large impact on Social Security spending.

Accepted Answer

A) True 
 B)False

Question 5

Marginally attached workers are workers who leave the labor force because of:

Accepted Answer

A)  the difficulty of finding transportation. 
B)  their inability to find jobs. 
C)  difficulty of finding appropriate childcare. 
D)  All of the above are correct. 
A)  the difficulty of finding transportation. 
B)  their inability to find jobs. 
C)  difficulty of finding appropriate childcare. 
D)  All of the above are correct.

Question 6

-Refer to Table 6.10. Suppose 1999 is the base year. The price index in 1999 is:

Accepted Answer

A)  10. 
B)  100. 
C)  1. 
D)  1,000. 
A)  10. 
B)  100. 
C)  1. 
D)  1,000.

Question 7

Recall Application 4, "The Introduction of Cell Phones and the Bias in the CPI," to answer the following questions:
-According to the application, the failure to include cell phones in the calculation of the CPI creates an upward bias on the telecommunications component of the CPI by 0.8 to 1.9 percent. If the measured inflation for telecommunications was 3%, then the actual inflation was somewhere between:

Accepted Answer

A)  3.8 to 4.9 percent. 
B)  3.9 to 4.8 percent 
C)  0.8 to 1.9 percent. 
D)  1.1 to 2..2 percent. 
A)  3.8 to 4.9 percent. 
B)  3.9 to 4.8 percent 
C)  0.8 to 1.9 percent. 
D)  1.1 to 2..2 percent.

Question 8

Janie graduated from college a month ago and is now without work. She accepted a job that will start next month. Today, Janie is:

Accepted Answer

A)  unemployed. 
B)  employed. 
C)  not in the labor force. 
D)  a discouraged worker. 
A)  unemployed. 
B)  employed. 
C)  not in the labor force. 
D)  a discouraged worker.

Question 9

-Refer to Table 6.12. If 1998 is the base year, the inflation rate between 1999 and 2000 is:

Accepted Answer

A)  1.01%. 
B)  0.5%. 
C)  1.40%. 
D)  none of the above 
A)  1.01%. 
B)  0.5%. 
C)  1.40%. 
D)  none of the above

Question 10

Which of the following individuals can be classified as a marginally attached worker?

Accepted Answer

A)  Jane is currently looking for a job, and has not found one. 
B)  Joe, works at McDonald's after losing his management job at IBM. 
C)  Bob, stops looking for a job as a 5th grade teacher after looking for a job the last 6 months. 
D)  Bill, retired from 32 years of government service rather than get a 10 percent pay cut. 
A)  Jane is currently looking for a job, and has not found one. 
B)  Joe, works at McDonald's after losing his management job at IBM. 
C)  Bob, stops looking for a job as a 5th grade teacher after looking for a job the last 6 months. 
D)  Bill, retired from 32 years of government service rather than get a 10 percent pay cut.

Question 11

If the price index in 2000 is 120 and the price index in 2001 is 112, then the rate of inflation between 2000 and 2001 is:

Accepted Answer

A)  - 8.6%. 
B)  - 8.7%. 
C)  - 6.6%. 
D)  - 4.17%. 
A)  - 8.6%. 
B)  - 8.7%. 
C)  - 6.6%. 
D)  - 4.17%.

Question 12

What is the difference between the CPI and the GDP chain index?

Accepted Answer

A)  The CPI includes capital goods but the chain index does not. 
B)  The CPI basket includes more goods and services than the GDP chain index basket. 
C)  The CPI includes a fixed basket of goods while the chain index does not. 
D)  The CPI measures price changes while the GDP chain index measures production changes. 
A)  The CPI includes capital goods but the chain index does not. 
B)  The CPI basket includes more goods and services than the GDP chain index basket. 
C)  The CPI includes a fixed basket of goods while the chain index does not. 
D)  The CPI measures price changes while the GDP chain index measures production changes.

Question 13

The level of the natural rate of unemployment in the economy is determined by Congress and the President.

Accepted Answer

A) True 
 B)False

Question 14

Janie graduated from college a month ago and is now without work. She accepted a job that will start next month. Today, Janie is:

Accepted Answer

A)  employed. 
B)  in the labor force. 
C)  not in the labor force. 
D)  a discouraged worker. 
A)  employed. 
B)  in the labor force. 
C)  not in the labor force. 
D)  a discouraged worker.

Question 15

Suppose that the CPI in Year 1 is 150 and the CPI in Year 2 is 200. The rate of inflation between Year 1 and Year 2 is:

Accepted Answer

A)  33.33%. 
B)  50%. 
C)  25%. 
D)  14.28%. 
A)  33.33%. 
B)  50%. 
C)  25%. 
D)  14.28%.

Question 16

What will happen to the unemployment rate when some unemployed workers quit working and are now classified as "discouraged workers"?

Accepted Answer

Once the workers quit looking

Question 17

The ratio of the labor force to the number of people employed is called the labor- force participation rate.

Accepted Answer

A) True 
 B)False

Question 18

When the economy slows down and real GDP falls, the type of unemployment that will be directly affected is the:

Accepted Answer

A)  natural rate of unemployment. 
B)  cyclical unemployment. 
C)  frictional unemployment. 
D)  structural unemployment. 
A)  natural rate of unemployment. 
B)  cyclical unemployment. 
C)  frictional unemployment. 
D)  structural unemployment.

Question 19

-Refer to Table 6.6. The number of people unemployed equals:

Accepted Answer

A)  5 million. 
B)  10.5 million. 
C)  6.825 million. 
D)  8 million. 
A)  5 million. 
B)  10.5 million. 
C)  6.825 million. 
D)  8 million.

Question 20

Unemployment insurance:

Accepted Answer

A)  is a temporary cushion to the economic hardships caused by unemployment. 
B)  is usually higher than the income that the unemployed worker lost. 
C)  is available only to workers above the age of 55. 
D)  is a permanent substitute for income lost as a result of unemployment. 
A)  is a temporary cushion to the economic hardships caused by unemployment. 
B)  is usually higher than the income that the unemployed worker lost. 
C)  is available only to workers above the age of 55. 
D)  is a permanent substitute for income lost as a result of unemployment.

Suppose that the CPI in 1999 was 125.2 and the CPI in 2000 was 139.1. The rate of inflation between 1999 and 2000 was:

The number of people unemployed equals:

Recall Application 2, "More Disability, Less Unemployment?" to answer the following questions: -According to the application, the changes in the federal Disability Insurance program:

Overstating the actual change in prices has a large impact on Social Security spending.

Marginally attached workers are workers who leave the labor force because of:

-Refer to Table 6.10. Suppose 1999 is the base year. The price index in 1999 is:

Janie graduated from college a month ago and is now without work. She accepted a job that will start next month. Today, Janie is:

-Refer to Table 6.12. If 1998 is the base year, the inflation rate between 1999 and 2000 is:

Which of the following individuals can be classified as a marginally attached worker?

If the price index in 2000 is 120 and the price index in 2001 is 112, then the rate of inflation between 2000 and 2001 is:

What is the difference between the CPI and the GDP chain index?

The level of the natural rate of unemployment in the economy is determined by Congress and the President.

Janie graduated from college a month ago and is now without work. She accepted a job that will start next month. Today, Janie is:

Suppose that the CPI in Year 1 is 150 and the CPI in Year 2 is 200. The rate of inflation between Year 1 and Year 2 is:

What will happen to the unemployment rate when some unemployed workers quit working and are now classified as "discouraged workers"?

The ratio of the labor force to the number of people employed is called the labor- force participation rate.

When the economy slows down and real GDP falls, the type of unemployment that will be directly affected is the:

-Refer to Table 6.6. The number of people unemployed equals:

Unemployment insurance:

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Measuring a Nations Production and Income

The Economy at Full Employment

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters

Exam 6: Unemployment and Inflation

Suppose that the CPI in 1999 was 125.2 and the CPI in 2000 was 139.1. The rate of inflation between 1999 and 2000 was:

The number of people unemployed equals:

Recall Application 2, "More Disability, Less Unemployment?" to answer the following questions: -According to the application, the changes in the federal Disability Insurance program:

Overstating the actual change in prices has a large impact on Social Security spending.

Marginally attached workers are workers who leave the labor force because of:

-Refer to Table 6.10. Suppose 1999 is the base year. The price index in 1999 is:

Janie graduated from college a month ago and is now without work. She accepted a job that will start next month. Today, Janie is:

-Refer to Table 6.12. If 1998 is the base year, the inflation rate between 1999 and 2000 is:

Which of the following individuals can be classified as a marginally attached worker?

If the price index in 2000 is 120 and the price index in 2001 is 112, then the rate of inflation between 2000 and 2001 is:

What is the difference between the CPI and the GDP chain index?

The level of the natural rate of unemployment in the economy is determined by Congress and the President.

Janie graduated from college a month ago and is now without work. She accepted a job that will start next month. Today, Janie is:

Suppose that the CPI in Year 1 is 150 and the CPI in Year 2 is 200. The rate of inflation between Year 1 and Year 2 is:

What will happen to the unemployment rate when some unemployed workers quit working and are now classified as "discouraged workers"?

The ratio of the labor force to the number of people employed is called the labor- force participation rate.

When the economy slows down and real GDP falls, the type of unemployment that will be directly affected is the:

-Refer to Table 6.6. The number of people unemployed equals:

Unemployment insurance:

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Measuring a Nations Production and Income

The Economy at Full Employment

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters