Question 1

The household survey asks adults about their employment status and is used to compile the monthly unemployment rate.

Accepted Answer

A) True 
 B)False

Question 2

Assume the average annual CPI values for 2017 and 2018 were 207.3 and 215.3, respectively. What was the percent increase in the CPI between these two years?

Accepted Answer

A)  0.96 
B)  1.04 
C)  3.86 
D)  8.0 
A)  0.96 
B)  1.04 
C)  3.86 
D)  8.0

Question 3

Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as

Accepted Answer

A)  employed. 
B)  unemployed. 
C)  not in the labor force. 
D)  not in the working-age population. 
A)  employed. 
B)  unemployed. 
C)  not in the labor force. 
D)  not in the working-age population.

Question 4

Your grandfather tells you that he earned $7,000/year in his first job in 1961. You earn $35,000/year in your first job in 2018. You know that average prices have risen steadily since 1961. You earn

Accepted Answer

A)  5 times as much as your grandfather in terms of real income. 
B)  more than 5 times as much as your grandfather in terms of real income. 
C)  less than 5 times as much as your grandfather in terms of real income. 
D)  less than 5 times as much as your grandfather in terms of nominal income. 
A)  5 times as much as your grandfather in terms of real income. 
B)  more than 5 times as much as your grandfather in terms of real income. 
C)  less than 5 times as much as your grandfather in terms of real income. 
D)  less than 5 times as much as your grandfather in terms of nominal income.

Question 5

Table 20-19
  
-Refer to Table 20-19. Looking at the table above, what is the rate of growth of the average price level from 2017 to 2018?

Accepted Answer

A)  1% 
B)  2% 
C)  3.5% 
D)  4.76% 
E)  5.25% 
A)  1% 
B)  2% 
C)  3.5% 
D)  4.76% 
E)  5.25%

Question 6

What is the natural rate of unemployment, and what types of unemployment constitute the natural rate of unemployment?

Accepted Answer

The natural rate of unemployment is the

Question 7

For the last few decades, the labor force participation rates of men have ________, and the labor force participation rates of women have ________.

Accepted Answer

A)  risen; risen 
B)  fallen; fallen 
C)  risen; fallen 
D)  fallen; risen 
A)  risen; risen 
B)  fallen; fallen 
C)  risen; fallen 
D)  fallen; risen

Question 8

Which of the following is an example of a worker experiencing cyclical unemployment?

Accepted Answer

A)  a worker who changes jobs to move closer to her family 
B)  an assembly line worker who loses his job because of automation 
C)  a freightliner employee that got laid off because of the recession of 2007-2009 
D)  a lifeguard who was hired during the summer season is laid off after summer is over 
A)  a worker who changes jobs to move closer to her family 
B)  an assembly line worker who loses his job because of automation 
C)  a freightliner employee that got laid off because of the recession of 2007-2009 
D)  a lifeguard who was hired during the summer season is laid off after summer is over

Question 9

The problem associated with inflation is that as prices rise, consumers can no longer afford to buy as many goods and services, since nominal income usually does not increase with inflation.

Accepted Answer

A) True 
 B)False

Question 10

The natural rate of unemployment consists of frictional unemployment plus cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 11

During a deflationary period

Accepted Answer

A)  the nominal interest rate is less than the real interest rate. 
B)  the real interest rate is less than the nominal interest rate. 
C)  the price level rises. 
D)  the nominal interest rate does not change. 
A)  the nominal interest rate is less than the real interest rate. 
B)  the real interest rate is less than the nominal interest rate. 
C)  the price level rises. 
D)  the nominal interest rate does not change.

Question 12

If inflation is anticipated, some effects of inflation on the redistribution of income can be avoided.

Accepted Answer

A) True 
 B)False

Question 13

The unemployment rate is an important economic statistic that can tell us about the health of the economy. If the unemployment rate turns out to be high or higher than anticipated, we would expect

Accepted Answer

A)  it is more likely that an incumbent president will be re-elected. 
B)  that stock prices are more likely to fall. 
C)  that jobs are less difficult to find. 
D)  that investors will be more optimistic about the economy. 
A)  it is more likely that an incumbent president will be re-elected. 
B)  that stock prices are more likely to fall. 
C)  that jobs are less difficult to find. 
D)  that investors will be more optimistic about the economy.

Question 14

Which of the following explains the changes in the U.S. adult male labor force participation rate since 1948?

Accepted Answer

A)  More men are joining the military as compared to the past. 
B)  More men are retiring later in life as compared to the past. 
C)  Fewer men consider themselves discouraged workers as compared to the past. 
D)  Younger men are remaining in school longer as compared to the past. 
A)  More men are joining the military as compared to the past. 
B)  More men are retiring later in life as compared to the past. 
C)  Fewer men consider themselves discouraged workers as compared to the past. 
D)  Younger men are remaining in school longer as compared to the past.

Question 15

Most economists believe that labor unions significantly increase the overall unemployment rate in the United States.

Accepted Answer

A) True 
 B)False

Question 16

The most widely used measure of inflation is based on which of the following price indices?

Accepted Answer

A)  the producer price index 
B)  the consumer price index 
C)  the GDP deflator 
D)  the wholesale price index 
A)  the producer price index 
B)  the consumer price index 
C)  the GDP deflator 
D)  the wholesale price index

Question 17

Describe how inflation can be costly even if it is anticipated.

Accepted Answer

First, there will be redistribution as s

Question 18

To reduce the bias in the consumer price index, the Bureau of Labor Statistics

Accepted Answer

A)  updates the market basket every two years, rather than every 10 years. 
B)  updates the market basket every 10 years, rather than every two years. 
C)  incorporates substitutions by consumers when prices of specific products rise rapidly. 
D)  incorporates substitutions by consumers when prices of specific products fall rapidly. 
A)  updates the market basket every two years, rather than every 10 years. 
B)  updates the market basket every 10 years, rather than every two years. 
C)  incorporates substitutions by consumers when prices of specific products rise rapidly. 
D)  incorporates substitutions by consumers when prices of specific products fall rapidly.

Question 19

If an economy experiences deflation, the real interest rate

Accepted Answer

A)  will be less than the nominal interest rate. 
B)  will be negative when the nominal interest rate is positive. 
C)  will be greater than the nominal interest rate. 
D)  will be equal to the deflation rate, so long as the nominal interest rate is positive. 
A)  will be less than the nominal interest rate. 
B)  will be negative when the nominal interest rate is positive. 
C)  will be greater than the nominal interest rate. 
D)  will be equal to the deflation rate, so long as the nominal interest rate is positive.

Question 20

During the Great Depression, cyclical unemployment increased as the recession continued. This increase in cyclical unemployment

Accepted Answer

A)  increased the natural rate of unemployment. 
B)  decreased the natural rate of unemployment. 
C)  had no effect on the natural rate of unemployment. 
D)  could have increased or decreased the natural rate of unemployment. 
A)  increased the natural rate of unemployment. 
B)  decreased the natural rate of unemployment. 
C)  had no effect on the natural rate of unemployment. 
D)  could have increased or decreased the natural rate of unemployment.

Exam 20: Unemployment and Inflation

The household survey asks adults about their employment status and is used to compile the monthly unemployment rate.

Assume the average annual CPI values for 2017 and 2018 were 207.3 and 215.3, respectively. What was the percent increase in the CPI between these two years?

Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as

Your grandfather tells you that he earned $7,000/year in his first job in 1961. You earn $35,000/year in your first job in 2018. You know that average prices have risen steadily since 1961. You earn

Table 20-19 -Refer to Table 20-19. Looking at the table above, what is the rate of growth of the average price level from 2017 to 2018?

What is the natural rate of unemployment, and what types of unemployment constitute the natural rate of unemployment?

For the last few decades, the labor force participation rates of men have ________, and the labor force participation rates of women have ________.

Which of the following is an example of a worker experiencing cyclical unemployment?

The problem associated with inflation is that as prices rise, consumers can no longer afford to buy as many goods and services, since nominal income usually does not increase with inflation.

The natural rate of unemployment consists of frictional unemployment plus cyclical unemployment.

During a deflationary period

If inflation is anticipated, some effects of inflation on the redistribution of income can be avoided.

The unemployment rate is an important economic statistic that can tell us about the health of the economy. If the unemployment rate turns out to be high or higher than anticipated, we would expect

Which of the following explains the changes in the U.S. adult male labor force participation rate since 1948?

Most economists believe that labor unions significantly increase the overall unemployment rate in the United States.

The most widely used measure of inflation is based on which of the following price indices?

Describe how inflation can be costly even if it is anticipated.

To reduce the bias in the consumer price index, the Bureau of Labor Statistics

If an economy experiences deflation, the real interest rate

During the Great Depression, cyclical unemployment increased as the recession continued. This increase in cyclical unemployment

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

For the last few decades, the labor force participation rates of men have , and the labor force participation rates of women have .