Question 1

Why does unemployment not go to zero during booms?

Accepted Answer

While unemployment has a cyclical compon

Question 2

Recall the Application about the impact of the federal Disability Insurance program on the unemployment rate to answer the following question(s).
-Recall the Application. If the federal Disability Insurance program leads to a decrease in the labor force participation rate, the ________ will be ________.

Accepted Answer

A)  frictional unemployment rate; higher 
B)  structural unemployment rate; higher 
C)  measured unemployment rate; lower 
D)  measured unemployment rate; higher 
A)  frictional unemployment rate; higher 
B)  structural unemployment rate; higher 
C)  measured unemployment rate; lower 
D)  measured unemployment rate; higher

Question 3

Chain-weighted price indices are constructed such that

Accepted Answer

A)  prices in different economies can be directly compared with one another. 
B)  prices in different years can be directly compared with one another. 
C)  all years' levels of GDP are directly related to a base year level of GDP. 
D)  prices of one good can be directly compared with prices of other goods. 
A)  prices in different economies can be directly compared with one another. 
B)  prices in different years can be directly compared with one another. 
C)  all years' levels of GDP are directly related to a base year level of GDP. 
D)  prices of one good can be directly compared with prices of other goods.

Question 4

Suppose an economy consists of 500,000 individuals 16 years and older, 260,000 are employed, and 21,000 are unemployed but actively seeking work. In this example the unemployment rate is approximately

Accepted Answer

A)  4.2 percent. 
B)  6.1 percent. 
C)  7.5 percent. 
D)  8.0 percent. 
A)  4.2 percent. 
B)  6.1 percent. 
C)  7.5 percent. 
D)  8.0 percent.

Question 5

The percentage rate of change in the price level is called the

Accepted Answer

A)  chain-weighted price index. 
B)  Consumer Price Index. 
C)  rate of inflation. 
D)  rate of absorption. 
A)  chain-weighted price index. 
B)  Consumer Price Index. 
C)  rate of inflation. 
D)  rate of absorption.

Question 6

Which one of the following statements is NOT correct?

Accepted Answer

A)  The natural rate of unemployment is estimated to be between 5 percent and 6.5 percent in the U.S. 
B)  The term "full employment" means that 100 percent of the labor force is employed. 
C)  The line between frictional and structural unemployment is sometimes hard to draw. 
D)  Unemployment can occur even when an economy is growing. 
A)  The natural rate of unemployment is estimated to be between 5 percent and 6.5 percent in the U.S. 
B)  The term "full employment" means that 100 percent of the labor force is employed. 
C)  The line between frictional and structural unemployment is sometimes hard to draw. 
D)  Unemployment can occur even when an economy is growing.

Question 7

For the purpose of statistically reporting the unemployment rate, "discouraged workers" are

Accepted Answer

A)  counted. 
B)  not counted. 
C)  offered other jobs. 
D)  trained to do different work. 
A)  counted. 
B)  not counted. 
C)  offered other jobs. 
D)  trained to do different work.

Question 8

Structural unemployment exists because workers and employers try to find the right employment matches.

Accepted Answer

A) True 
 B)False

Question 9

Unemployment insurance tends to lead to the unemployed worker spending less time unemployed.

Accepted Answer

A) True 
 B)False

Question 10

Recall the Application about the time involved in including cell phones in the calculation of the CPI to answer the following question(s).
-According to the Application, as new products are constantly invented and introduced on the market,

Accepted Answer

A)  the bias in the CPI can be large. 
B)  the bias in the CPI tends to become smaller. 
C)  the bias in the CPI will eventually disappear. 
D)  the bias in the CPI will remain virtually unchanged. 
A)  the bias in the CPI can be large. 
B)  the bias in the CPI tends to become smaller. 
C)  the bias in the CPI will eventually disappear. 
D)  the bias in the CPI will remain virtually unchanged.

Question 11

Critically evaluate the statement "Honolulu is an expensive place to live. Therefore the inflation rate must be high in Honolulu."

Accepted Answer

The statement confuses the price level w

Question 12

The index most widely used by the government and the private sector to measure changes in the cost of living is the

Accepted Answer

A)  Producer Price Index. 
B)  Consumer Price Index. 
C)  the GDP deflator. 
D)  the chain-weighted price index. 
A)  Producer Price Index. 
B)  Consumer Price Index. 
C)  the GDP deflator. 
D)  the chain-weighted price index.

Question 13

Recall the Application about the time involved in including cell phones in the calculation of the CPI to answer the following question(s).
-According to this Application, cell phones were introduced to the public in 1983, but it took the Bureau of Labor Statistics ________ to include them in calculating the CPI.

Accepted Answer

A)  3 years 
B)  7 years 
C)  15 years 
D)  24 years 
A)  3 years 
B)  7 years 
C)  15 years 
D)  24 years

Question 14

Recall the Application about the impact of the federal Disability Insurance program on the unemployment rate to answer the following question(s).
-Recall the Application. Assume 5,000 unemployed workers left the workforce to participate in the federal Disability Insurance program, leaving the size of the labor force at 195,000. If 13,000 workers remain unemployed and in the labor force, what was the unemployment rate before and after the 5,000 unemployed workers left the workforce?

Accepted Answer

A)  9.0 percent; 6.7 percent 
B)  6.5 percent; 2.3 percent 
C)  12.8 percent; 4.3 percent 
D)  38.5 percent; 27.8 percent 
A)  9.0 percent; 6.7 percent 
B)  6.5 percent; 2.3 percent 
C)  12.8 percent; 4.3 percent 
D)  38.5 percent; 27.8 percent

Question 15

Recall the Application about the study done about the perceptions and behavior of the unemployed in Great Britain to answer the following question(s).
-According to this Application, if you are unemployed and if your peer group is also unemployed,

Accepted Answer

A)  you have a better chance of finding employment. 
B)  you may not be as aggressive in searching for work. 
C)  you will want to find a job quickly to encourage your peer group about employment prospects. 
D)  you have little chance of finding a job. 
A)  you have a better chance of finding employment. 
B)  you may not be as aggressive in searching for work. 
C)  you will want to find a job quickly to encourage your peer group about employment prospects. 
D)  you have little chance of finding a job.

Question 16

________ unemployment is NOT associated with economic fluctuations.

Accepted Answer

A)  Structural 
B)  Cyclical 
C)  Frictional 
D)  both A and C 
A)  Structural 
B)  Cyclical 
C)  Frictional 
D)  both A and C

Question 17

Juanita quit her job to move to Santa Fe to be closer to her family. She is actively looking for a new job in Santa Fe. Juanita is considered

Accepted Answer

A)  structurally unemployed. 
B)  cyclically unemployed. 
C)  frictionally unemployed. 
D)  not to be unemployed. 
A)  structurally unemployed. 
B)  cyclically unemployed. 
C)  frictionally unemployed. 
D)  not to be unemployed.

Question 18

Table 6.2
The following table lists the basket of goods in the
Consumer Price Index for the nation of Astro (Assume 2010 is the base year.)
  
-Using the information in Table 6.2, the Astro Consumer Price Index for 2010 is

Accepted Answer

A)  24. 
B)  100. 
C)  124. 
D)  189. 
A)  24. 
B)  100. 
C)  124. 
D)  189.

Question 19

The Consumer Price Index (CPI)differs from a chain-weighted price index in that the CPI

Accepted Answer

A)  requires calculation of GDP, while the chain-weighted index does not. 
B)  measures the costs of a typical fixed basket of goods over time, while the chain-weighted index does not. 
C)  allows for the goods consumed in an economy to change over time, while the chain-weighted index does not. 
D)  compares the prices of all goods in one year to the prices of all goods in other years. 
A)  requires calculation of GDP, while the chain-weighted index does not. 
B)  measures the costs of a typical fixed basket of goods over time, while the chain-weighted index does not. 
C)  allows for the goods consumed in an economy to change over time, while the chain-weighted index does not. 
D)  compares the prices of all goods in one year to the prices of all goods in other years.

Question 20

Suppose that the chain-weighted index for GDP in Panama was 180 in 2011 and 188 in 2012. The inflation rate between those two years was approximately

Accepted Answer

A)  1.1 percent. 
B)  4.4 percent. 
C)  8 percent. 
D)  10.4 percent. 
A)  1.1 percent. 
B)  4.4 percent. 
C)  8 percent. 
D)  10.4 percent.

Why does unemployment not go to zero during booms?

Recall the Application about the impact of the federal Disability Insurance program on the unemployment rate to answer the following question(s). -Recall the Application. If the federal Disability Insurance program leads to a decrease in the labor force participation rate, the will be .

Chain-weighted price indices are constructed such that

Suppose an economy consists of 500,000 individuals 16 years and older, 260,000 are employed, and 21,000 are unemployed but actively seeking work. In this example the unemployment rate is approximately

The percentage rate of change in the price level is called the

Which one of the following statements is NOT correct?

For the purpose of statistically reporting the unemployment rate, "discouraged workers" are

Structural unemployment exists because workers and employers try to find the right employment matches.

Unemployment insurance tends to lead to the unemployed worker spending less time unemployed.

Recall the Application about the time involved in including cell phones in the calculation of the CPI to answer the following question(s). -According to the Application, as new products are constantly invented and introduced on the market,

Critically evaluate the statement "Honolulu is an expensive place to live. Therefore the inflation rate must be high in Honolulu."

The index most widely used by the government and the private sector to measure changes in the cost of living is the

Recall the Application about the study done about the perceptions and behavior of the unemployed in Great Britain to answer the following question(s). -According to this Application, if you are unemployed and if your peer group is also unemployed,

________ unemployment is NOT associated with economic fluctuations.

Juanita quit her job to move to Santa Fe to be closer to her family. She is actively looking for a new job in Santa Fe. Juanita is considered

Table 6.2 The following table lists the basket of goods in the Consumer Price Index for the nation of Astro (Assume 2010 is the base year.) -Using the information in Table 6.2, the Astro Consumer Price Index for 2010 is

The Consumer Price Index (CPI)differs from a chain-weighted price index in that the CPI

Suppose that the chain-weighted index for GDP in Panama was 180 in 2011 and 188 in 2012. The inflation rate between those two years was approximately

Introduction: What Is Economics?

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Measuring a Nation's 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

Why does unemployment not go to zero during booms?

Chain-weighted price indices are constructed such that

Suppose an economy consists of 500,000 individuals 16 years and older, 260,000 are employed, and 21,000 are unemployed but actively seeking work. In this example the unemployment rate is approximately

The percentage rate of change in the price level is called the

Which one of the following statements is NOT correct?

For the purpose of statistically reporting the unemployment rate, "discouraged workers" are

Structural unemployment exists because workers and employers try to find the right employment matches.

Unemployment insurance tends to lead to the unemployed worker spending less time unemployed.

Recall the Application about the time involved in including cell phones in the calculation of the CPI to answer the following question(s). -According to the Application, as new products are constantly invented and introduced on the market,

Critically evaluate the statement "Honolulu is an expensive place to live. Therefore the inflation rate must be high in Honolulu."

The index most widely used by the government and the private sector to measure changes in the cost of living is the

Recall the Application about the study done about the perceptions and behavior of the unemployed in Great Britain to answer the following question(s). -According to this Application, if you are unemployed and if your peer group is also unemployed,

________ unemployment is NOT associated with economic fluctuations.

Juanita quit her job to move to Santa Fe to be closer to her family. She is actively looking for a new job in Santa Fe. Juanita is considered

Table 6.2 The following table lists the basket of goods in the Consumer Price Index for the nation of Astro (Assume 2010 is the base year.) -Using the information in Table 6.2, the Astro Consumer Price Index for 2010 is

The Consumer Price Index (CPI)differs from a chain-weighted price index in that the CPI

Suppose that the chain-weighted index for GDP in Panama was 180 in 2011 and 188 in 2012. The inflation rate between those two years was approximately

Introduction: What Is Economics?

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Measuring a Nation's 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