Question 1

-Refer to Table 6.1. The labor force participation rate is:

Accepted Answer

A)  63 percent. 
B)  37.5 percent. 
C)  82 percent. 
D)  18 percent. 
A)  63 percent. 
B)  37.5 percent. 
C)  82 percent. 
D)  18 percent.

Question 2

If the U.S. economy experienced a large deflation, what would most likely happen to U.S. banks?

Accepted Answer

A)  U.S. banks would not be affected by the deflation. 
B)  U.S. banks would experience large profits. 
C)  U.S. banks will find themselves making more loans. 
D)  U.S. bank profits would decline as more borrowers default. 
A)  U.S. banks would not be affected by the deflation. 
B)  U.S. banks would experience large profits. 
C)  U.S. banks will find themselves making more loans. 
D)  U.S. bank profits would decline as more borrowers default.

Question 3

What is the Consumer Price Index?

Accepted Answer

The Consumer Price Index is a

Question 4

Changes in the CPI provide an accurate measure of changes in the cost of living for all individuals. 181)

Accepted Answer

A) True 
 B)False

Question 5

Anticipated inflation does not distort the tax system because taxes are typically based on real income, not nominal income.

Accepted Answer

A) True 
 B)False

Question 6

Sally works 10 hours a week, but would prefer to work more hours. According to the BLS, Sally is classified as:

Accepted Answer

A)  employed but not "an individual working part time for economic reasons." 
B)  a discouraged worker. 
C)  unemployed and "an individual working part time for economic reason." 
D)  employed and "an individual working part time for economic reason." 
A)  employed but not "an individual working part time for economic reasons." 
B)  a discouraged worker. 
C)  unemployed and "an individual working part time for economic reason." 
D)  employed and "an individual working part time for economic reason."

Question 7

-Refer to Table 6.1. The labor force equals:

Accepted Answer

A)  14,000. 
B)  16,500. 
C)  16,000. 
D)  13,500. 
A)  14,000. 
B)  16,500. 
C)  16,000. 
D)  13,500.

Question 8

Which of the following is considered a cost of unemployment?

Accepted Answer

A)  severe psychological costs to the job loser 
B)  higher crime, suicide and divorce rates 
C)  wasted resources because a worker is not being utilized 
D)  All of the above are considered costs of unemployment. 
A)  severe psychological costs to the job loser 
B)  higher crime, suicide and divorce rates 
C)  wasted resources because a worker is not being utilized 
D)  All of the above are considered costs of unemployment.

Question 9

An increase in the labor force, without a corresponding increase in the number of employed workers will cause the:

Accepted Answer

A)  unemployment rate to decrease. 
B)  unemployment rate to increase. 
C)  the population growth rate will increase. 
D)  the labor force participation rate to decrease. 
A)  unemployment rate to decrease. 
B)  unemployment rate to increase. 
C)  the population growth rate will increase. 
D)  the labor force participation rate to decrease.

Question 10

-Refer to Table 6.5. The labor- force participation rate is:

Accepted Answer

A)  136.36% 
B)  90.91%. 
C)  81.81%. 
D)  71.43%. 
A)  136.36% 
B)  90.91%. 
C)  81.81%. 
D)  71.43%.

Question 11

If the economy is experiencing 50 percent inflation per month, then a donut that costs $1.50 today will cost _______ next month.

Accepted Answer

A)  $1.00 
B)  $2.25 
C)  $1.75 
D)  $2.00 
A)  $1.00 
B)  $2.25 
C)  $1.75 
D)  $2.00

Question 12

Unemployment insurance benefits are typically temporary and completely reimburses the worker's lost earnings.

Accepted Answer

A) True 
 B)False

Question 13

The natural rate of unemployment is the unemployment rate during a period of full employment.

Accepted Answer

A) True 
 B)False

Question 14

Recall Application 1, "After Growing Sharply, Women's Labor Force Participation Has Leveled Off," to answer the
following questions:
-According to the application, the labor- force participation rate of men is currently lower than the labor force participation rate of women.

Accepted Answer

A) True 
 B)False

Question 15

While one benefit of unemployment insurance is that it can temporarily offset some of the financial costs of losing a job, its downside is that it:

Accepted Answer

A)  increases the incentive for a worker to find a job immediately. 
B)  increases the incentive for the worker to have a second job. 
C)  decreases the length of time a worker remains unemployed. 
D)  increases the length of time a worker remains unemployed. 
A)  increases the incentive for a worker to find a job immediately. 
B)  increases the incentive for the worker to have a second job. 
C)  decreases the length of time a worker remains unemployed. 
D)  increases the length of time a worker remains unemployed.

Question 16

Suppose that 1999 is the base year and the price index for 2008 is 130. A basket of goods that is valued $450 in 2008 would cost _______ in 1999.

Accepted Answer

A)  $4203 
B)  $346 
C)  $320 
D)  $585 
A)  $4203 
B)  $346 
C)  $320 
D)  $585

Question 17

The unemployment that occurs as a result of the normal functioning of the labor market is called cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 18

Recall Application 3, "Social Norms, Unemployment ,and Perceived Happiness," to answer the following questions:
-According to the application, people's well- being declined when:

Accepted Answer

A)  they become unemployed 
B)  others around them become unemployed. 
C)  their wages decrease. 
D)  both A and B are correct. 
A)  they become unemployed 
B)  others around them become unemployed. 
C)  their wages decrease. 
D)  both A and B are correct.

Question 19

Suppose an individual works 12 hours per week in a family business and is not looking for other work. Also assume that the individual is not paid for the 12 hours of work. According to the Bureau of Labor Statistics, this individual would be classified as:

Accepted Answer

A)  not in the labor force. 
B)  a discouraged worker. 
C)  employed. 
D)  none of the above 
A)  not in the labor force. 
B)  a discouraged worker. 
C)  employed. 
D)  none of the above

Question 20

-Refer to Table 6.10. If 1999 is the base year, the price index in 2001 is:

Accepted Answer

A)  120.5. 
B)  109.8. 
C)  115.2. 
D)  112.7. 
A)  120.5. 
B)  109.8. 
C)  115.2. 
D)  112.7.

-Refer to Table 6.1. The labor force participation rate is:

If the U.S. economy experienced a large deflation, what would most likely happen to U.S. banks?

What is the Consumer Price Index?

Changes in the CPI provide an accurate measure of changes in the cost of living for all individuals. 181)

Anticipated inflation does not distort the tax system because taxes are typically based on real income, not nominal income.

Sally works 10 hours a week, but would prefer to work more hours. According to the BLS, Sally is classified as:

-Refer to Table 6.1. The labor force equals:

Which of the following is considered a cost of unemployment?

An increase in the labor force, without a corresponding increase in the number of employed workers will cause the:

-Refer to Table 6.5. The labor- force participation rate is:

If the economy is experiencing 50 percent inflation per month, then a donut that costs $1.50 today will cost _______ next month.

Unemployment insurance benefits are typically temporary and completely reimburses the worker's lost earnings.

The natural rate of unemployment is the unemployment rate during a period of full employment.

Recall Application 1, "After Growing Sharply, Women's Labor Force Participation Has Leveled Off," to answer the following questions: -According to the application, the labor- force participation rate of men is currently lower than the labor force participation rate of women.

While one benefit of unemployment insurance is that it can temporarily offset some of the financial costs of losing a job, its downside is that it:

Suppose that 1999 is the base year and the price index for 2008 is 130. A basket of goods that is valued $450 in 2008 would cost _______ in 1999.

The unemployment that occurs as a result of the normal functioning of the labor market is called cyclical unemployment.

Recall Application 3, "Social Norms, Unemployment ,and Perceived Happiness," to answer the following questions: -According to the application, people's well- being declined when:

Suppose an individual works 12 hours per week in a family business and is not looking for other work. Also assume that the individual is not paid for the 12 hours of work. According to the Bureau of Labor Statistics, this individual would be classified as:

-Refer to Table 6.10. If 1999 is the base year, the price index in 2001 is:

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

-Refer to Table 6.1. The labor force participation rate is:

If the U.S. economy experienced a large deflation, what would most likely happen to U.S. banks?

What is the Consumer Price Index?

Changes in the CPI provide an accurate measure of changes in the cost of living for all individuals. 181)

Anticipated inflation does not distort the tax system because taxes are typically based on real income, not nominal income.

Sally works 10 hours a week, but would prefer to work more hours. According to the BLS, Sally is classified as:

-Refer to Table 6.1. The labor force equals:

Which of the following is considered a cost of unemployment?

An increase in the labor force, without a corresponding increase in the number of employed workers will cause the:

-Refer to Table 6.5. The labor- force participation rate is:

If the economy is experiencing 50 percent inflation per month, then a donut that costs $1.50 today will cost _______ next month.

Unemployment insurance benefits are typically temporary and completely reimburses the worker's lost earnings.

The natural rate of unemployment is the unemployment rate during a period of full employment.

Recall Application 1, "After Growing Sharply, Women's Labor Force Participation Has Leveled Off," to answer the following questions: -According to the application, the labor- force participation rate of men is currently lower than the labor force participation rate of women.

While one benefit of unemployment insurance is that it can temporarily offset some of the financial costs of losing a job, its downside is that it:

Suppose that 1999 is the base year and the price index for 2008 is 130. A basket of goods that is valued $450 in 2008 would cost _______ in 1999.

The unemployment that occurs as a result of the normal functioning of the labor market is called cyclical unemployment.

Recall Application 3, "Social Norms, Unemployment ,and Perceived Happiness," to answer the following questions: -According to the application, people's well- being declined when:

Suppose an individual works 12 hours per week in a family business and is not looking for other work. Also assume that the individual is not paid for the 12 hours of work. According to the Bureau of Labor Statistics, this individual would be classified as:

-Refer to Table 6.10. If 1999 is the base year, the price index in 2001 is:

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