Exam 6: Unemployment and Inflation

If the price index in Year 1 is 115 and the price index in Year 2 is 120, the rate of inflation between Year 1 and Year 2 is:

-Refer to Table 6.10. If 1999 is the base year, the price index in 1998 is:

The unemployment rate is defined as the ratio of the:

The unemployment rate is generally the same across demographic groups.

NEETS ARE THE NEW DISCOURAGED WORKERS IN JAPAN Who are the new discouraged workers in Japan? In Japan, there is growing concern about young people who are not joining the labor force. Young workers who have given up looking for work and often receive support from their parents are known as NEETs—"not in education, employment, or training." Because Japan has an aging population and does not encourage immigration, it is concerned about labor shortages and has focused attention on the NEETs. Many in Japan are concerned over this phenomenon because it potentially signals a change in the strong Japanese work ethic. However, the number of individuals in this category is quite small, only 2 percent of Japan’s 33 million young people between the ages of 15 and 34. Nonetheless, the fact that the Japanese decided to name this group suggests that it is socially significant to them. In the United States, individuals not seeking work and supported by their parents would be out of the labor force and possibly marginally attached workers. -If a person classified as NEET enters the labor market but could not find a job, the labor force:

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

-Refer to Table 6.11. If 1999 is the base year, then the inflation (i.e., the growth rate of the price index) between 2000 and 2001 is:

The largest cost associated with unanticipated inflation is:

The CPI somewhat overstates changes in the cost of living because it does not allow for substitutions that consumers might make in response to relative price changes.

When people who were previously looking for jobs stop looking for jobs, the:

A person who is currently actively looking for a job, but has not found a job is classified by the BLS as:

-Refer to Table 6.11. If 1999 is the base year, the price index in 2000 is:

An economy is experiencing hyperinflation if the inflation rate exceeds:

The economy attains full employment when the unemployment rate

-Refer to Table 6.13. If 1999 is the base year, the inflation rate between 1999 and 2001 is:

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. The reason for this upward bias is most likely from

Marginally attached workers:

-Refer to Table 6.6. The labor force:

The largest cost associated with anticipated inflation is:

-Refer to Table 6.10. If 1999 is the base year, then the inflation rate (i.e., the growth rate of the price index) between 2000 and 2001 is: