Question 1

Which of the following individuals benefit when the economy experiences unanticipated inflation?

Accepted Answer

A)  savers 
B)  borrowers 
C)  fixed income earners 
D)  lenders 
A)  savers 
B)  borrowers 
C)  fixed income earners 
D)  lenders

Question 2

How does the Consumer Price Index differ from the GDP chain index?

Accepted Answer

The CPI includes goods that are typicall

Question 3

Which of the following is an example of seasonal unemployment?

Accepted Answer

A)  lost shoe- making jobs after Nike moved operations to China last winter 
B)  lost management jobs after the company Yahoo was bought out by Microsoft 
C)  lost tax preparation jobs after April 15 
D)  lost textiles jobs due to a recession 
A)  lost shoe- making jobs after Nike moved operations to China last winter 
B)  lost management jobs after the company Yahoo was bought out by Microsoft 
C)  lost tax preparation jobs after April 15 
D)  lost textiles jobs due to a recession

Question 4

The unemployment rate equals:

Accepted Answer

A)  labor force/population. 
B)  (labor force - employed)/labor force. 
C)  unemployed/employed. 
D)  (employed - unemployed)/labor force. 
A)  labor force/population. 
B)  (labor force - employed)/labor force. 
C)  unemployed/employed. 
D)  (employed - unemployed)/labor force.

Question 5

A person who is currently actively looking for a job, but has a job that pays for 5 hours a week only is classified by the BLS as:

Accepted Answer

A)  employed. 
B)  not in the labor force. 
C)  unemployed. 
D)  under 16. 
A)  employed. 
B)  not in the labor force. 
C)  unemployed. 
D)  under 16.

Question 6

-Refer to Table 6.10. If 1999 is the base year, the price index in 2000 is:

Accepted Answer

A)  89.2. 
B)  102.4. 
C)  100.9. 
D)  101.4. 
A)  89.2. 
B)  102.4. 
C)  100.9. 
D)  101.4.

Question 7

-Refer to Table 6.13. If 1999 is the base year, the inflation rate between 1999 and 2000 is:

Accepted Answer

A)  30.7%. 
B)  21.7%. 
C)  3.78%. 
D)  0.0%. 
A)  30.7%. 
B)  21.7%. 
C)  3.78%. 
D)  0.0%.

Question 8

Inflation is, by definition, a larger problem than deflation.

Accepted Answer

A) True 
 B)False

Question 9

Cyclical unemployment is the:

Accepted Answer

A)  unemployment that results when people become discouraged about their chances of finding a job so they stop looking for work. 
B)  unemployment that occurs during recessions and depressions. 
C)  portion of unemployment that is due to the normal working of the labor market. 
D)  portion of unemployment that is due to mismatches between skills and jobs that result in a significant loss of jobs in certain industries. 
A)  unemployment that results when people become discouraged about their chances of finding a job so they stop looking for work. 
B)  unemployment that occurs during recessions and depressions. 
C)  portion of unemployment that is due to the normal working of the labor market. 
D)  portion of unemployment that is due to mismatches between skills and jobs that result in a significant loss of jobs in certain industries.

Question 10

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

Accepted Answer

A)  elderly workers who are deemed able to engage in substantial employment. 
B)  non- elderly workers who are deemed able to engage in substantial employment. 
C)  non- elderly workers who are deemed unable to engage in substantial employment. 
D)  elderly workers who are deemed unable to engage in substantial employment. 
A)  elderly workers who are deemed able to engage in substantial employment. 
B)  non- elderly workers who are deemed able to engage in substantial employment. 
C)  non- elderly workers who are deemed unable to engage in substantial employment. 
D)  elderly workers who are deemed unable to engage in substantial employment.

Question 11

Explain why a large deflation could force many borrowers to default on their loans.

Accepted Answer

When the economy experiences a large dec

Question 12

A man is fired from his job because he was late for work too many times. While he is searching for another job he would be classified as:

Accepted Answer

A)  cyclically unemployed. 
B)  not in the labor force because his employer had a legitimate reason for firing him. 
C)  structurally unemployed. 
D)  frictionally unemployed. 
A)  cyclically unemployed. 
B)  not in the labor force because his employer had a legitimate reason for firing him. 
C)  structurally unemployed. 
D)  frictionally unemployed.

Question 13

An individual worked for an airline that went out of business because the airline was unable to meet new federal safety standards. While the individual is unemployed, she will be classified as:

Accepted Answer

A)  naturally unemployed. 
B)  frictionally unemployed. 
C)  cyclically unemployed. 
D)  structurally unemployed. 
A)  naturally unemployed. 
B)  frictionally unemployed. 
C)  cyclically unemployed. 
D)  structurally unemployed.

Question 14

If discouraged workers were counted as unemployed, the measured unemployment rate would increase.

Accepted Answer

A) True 
 B)False

Question 15

A discouraged worker is:

Accepted Answer

A)  marginally attached. 
B)  not currently looking for a job. 
C)  not in the labor force. 
D)  All of the above are correct. 
A)  marginally attached. 
B)  not currently looking for a job. 
C)  not in the labor force. 
D)  All of the above are correct.

Question 16

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

Accepted Answer

A)  decreased the number of elderly adults receiving benefits from the program. 
B)  decreased the number of non- elderly adults receiving benefits from the program. 
C)  increased the number of elderly adults receiving benefits from the program. 
D)  increased the number of non- elderly adults receiving benefits from the program. 
A)  decreased the number of elderly adults receiving benefits from the program. 
B)  decreased the number of non- elderly adults receiving benefits from the program. 
C)  increased the number of elderly adults receiving benefits from the program. 
D)  increased the number of non- elderly adults receiving benefits from the program.

Question 17

Which of the following statements about price indexes and the cost of living is correct?

Accepted Answer

A)  As long as the overstatement of actual price increases remains below the unemployment rate this measurement bias is mostly irrelevant. 
B)  If the overstatement of actual price increases continues, the Social Security system is likely to go bankrupt within the next five years. 
C)  A one percent overstatement of actual price increases has a multi- billion impact in Social Security budgets. 
D)  Because the overstatement of actual price increases is always smaller than the growth rate of real GDP this measurement bias is mostly irrelevant. 
A)  As long as the overstatement of actual price increases remains below the unemployment rate this measurement bias is mostly irrelevant. 
B)  If the overstatement of actual price increases continues, the Social Security system is likely to go bankrupt within the next five years. 
C)  A one percent overstatement of actual price increases has a multi- billion impact in Social Security budgets. 
D)  Because the overstatement of actual price increases is always smaller than the growth rate of real GDP this measurement bias is mostly irrelevant.

Question 18

-Answer parts (a) through (e) using the information in Table 6.8.
(a) Calculate the number in the labor force.
(b) Calculate the number of unemployed workers.
(c) Calculate the unemployment rate.

Accepted Answer

(a) Labor force = [labor- force particip

Question 19

The natural rate of unemployment is generally thought of as the:

Accepted Answer

A)  sum of the structural unemployment and cyclical unemployment rates. 
B)  sum of the frictional unemployment and structural unemployment rates. 
C)  ratio of the frictional unemployment rate to the cyclical unemployment rate. 
D)  sum of the frictional unemployment and cyclical unemployment rates. 
A)  sum of the structural unemployment and cyclical unemployment rates. 
B)  sum of the frictional unemployment and structural unemployment rates. 
C)  ratio of the frictional unemployment rate to the cyclical unemployment rate. 
D)  sum of the frictional unemployment and cyclical unemployment rates.

Question 20

When an individual quits his/her job and decides to stay at home for a while and not looking for work, the labor- force participation rate:

Accepted Answer

A)  stays the same. 
B)  increases. 
C)  decreases. 
D)  may increase or decrease, depending on the length of time he/she stays at home. 
A)  stays the same. 
B)  increases. 
C)  decreases. 
D)  may increase or decrease, depending on the length of time he/she stays at home.

Which of the following individuals benefit when the economy experiences unanticipated inflation?

How does the Consumer Price Index differ from the GDP chain index?

Which of the following is an example of seasonal unemployment?

The unemployment rate equals:

A person who is currently actively looking for a job, but has a job that pays for 5 hours a week only is classified by the BLS as:

-Refer to Table 6.10. If 1999 is the base year, the price index in 2000 is:

-Refer to Table 6.13. If 1999 is the base year, the inflation rate between 1999 and 2000 is:

Inflation is, by definition, a larger problem than deflation.

Cyclical unemployment is the:

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

Explain why a large deflation could force many borrowers to default on their loans.

A man is fired from his job because he was late for work too many times. While he is searching for another job he would be classified as:

An individual worked for an airline that went out of business because the airline was unable to meet new federal safety standards. While the individual is unemployed, she will be classified as:

If discouraged workers were counted as unemployed, the measured unemployment rate would increase.

A discouraged worker is:

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

Which of the following statements about price indexes and the cost of living is correct?

-Answer parts (a) through (e) using the information in Table 6.8. (a) Calculate the number in the labor force. (b) Calculate the number of unemployed workers. (c) Calculate the unemployment rate.

The natural rate of unemployment is generally thought of as the:

When an individual quits his/her job and decides to stay at home for a while and not looking for work, the labor- force participation rate:

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

Which of the following individuals benefit when the economy experiences unanticipated inflation?

How does the Consumer Price Index differ from the GDP chain index?

Which of the following is an example of seasonal unemployment?

The unemployment rate equals:

A person who is currently actively looking for a job, but has a job that pays for 5 hours a week only is classified by the BLS as:

-Refer to Table 6.10. If 1999 is the base year, the price index in 2000 is:

-Refer to Table 6.13. If 1999 is the base year, the inflation rate between 1999 and 2000 is:

Inflation is, by definition, a larger problem than deflation.

Cyclical unemployment is the:

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

Explain why a large deflation could force many borrowers to default on their loans.

A man is fired from his job because he was late for work too many times. While he is searching for another job he would be classified as:

An individual worked for an airline that went out of business because the airline was unable to meet new federal safety standards. While the individual is unemployed, she will be classified as:

If discouraged workers were counted as unemployed, the measured unemployment rate would increase.

A discouraged worker is:

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

Which of the following statements about price indexes and the cost of living is correct?

-Answer parts (a) through (e) using the information in Table 6.8. (a) Calculate the number in the labor force. (b) Calculate the number of unemployed workers. (c) Calculate the unemployment rate.

The natural rate of unemployment is generally thought of as the:

When an individual quits his/her job and decides to stay at home for a while and not looking for work, the labor- force participation rate:

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