Question 1

Monthly expenditures for a family of 4 in 2010 averaged $1,400.In 2011,the cost of the same purchases was $1,500.If 2010 is the base year,what was the CPI in 2011?

Accepted Answer

A)  110 
B)  107 
C)  100 
D)  93 
A)  110 
B)  107 
C)  100 
D)  93

Question 2

When the price of gasoline rises,some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars.The fact that the CPI does not fully account for such changes in consumer behavior is called

Accepted Answer

A)  outlet bias. 
B)  increase in quality bias. 
C)  substitution bias. 
D)  discrimination bias. 
A)  outlet bias. 
B)  increase in quality bias. 
C)  substitution bias. 
D)  discrimination bias.

Question 3

The U.S.unemployment insurance program

Accepted Answer

A)  increases the amount of time the unemployed spend searching for a job. 
B)  decreases the level of frictional unemployment. 
C)  pays the unemployed a benefit equal to twice the average wage. 
D)  eliminates structural unemployment. 
A)  increases the amount of time the unemployed spend searching for a job. 
B)  decreases the level of frictional unemployment. 
C)  pays the unemployed a benefit equal to twice the average wage. 
D)  eliminates structural unemployment.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Table 20-8
  
-Refer to Table 20-8.Looking at the table above,real average hourly earnings between 2010 and 2011 changed by

Accepted Answer

A)  1.2%. 
B)  4.5%. 
C)  9.9%. 
D)  14.5%. 
A)  1.2%. 
B)  4.5%. 
C)  9.9%. 
D)  14.5%.

Question 6

What effect does the payment of government unemployment insurance have on the unemployment rate?

Accepted Answer

The payment of government unemployment i

Question 7

Explain what economists mean by full employment and why this rate of unemployment is not zero.

Accepted Answer

Full employment occurs in the macro econ

Question 8

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.The CPI over that year rises from 180 to 200.What is the real interest rate you are paying?

Accepted Answer

A)  15% 
B)  5% 
C)  -1.1% 
D)  -6.1% 
A)  15% 
B)  5% 
C)  -1.1% 
D)  -6.1%

Question 9

In recent years,economists have come to rely more on the establishment survey rather than the household survey to analyze current labor market statistics.

Accepted Answer

A) True 
 B)False

Question 10

Table 20-8
  
-Between 2011 and 2012,the CPI of a small nation rose from 182 to 185.If household incomes rose by 3% during that period of time,which of the following is true?

Accepted Answer

A)  The purchasing power of household income rose between 2011 and 2012. 
B)  The purchasing power of household income fell between 2011 and 2012. 
C)  The purchasing power of household income remained constant between 2011 and 2012. 
D)  The CPI cannot be used to determine how the purchasing power of household income changes over time. 
A)  The purchasing power of household income rose between 2011 and 2012. 
B)  The purchasing power of household income fell between 2011 and 2012. 
C)  The purchasing power of household income remained constant between 2011 and 2012. 
D)  The CPI cannot be used to determine how the purchasing power of household income changes over time.

Question 11

The broadest measure of the price level that includes all final goods and services is

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 12

Table 20-5
  
-Refer to Table 20-5.Suppose an economy has only three goods and the typical family purchases the amounts given in the table above.If 2005 is the base year,then what is the CPI for 2012?

Accepted Answer

A)  40.08 
B)  100 
C)  180 
D)  208 
A)  40.08 
B)  100 
C)  180 
D)  208

Question 13

When the labor market is at full employment

Accepted Answer

A)  there is only cyclical unemployment in the economy. 
B)  there is only structural unemployment in the economy. 
C)  the unemployment rate is 0%. 
D)  there is no cyclical unemployment in the economy. 
A)  there is only cyclical unemployment in the economy. 
B)  there is only structural unemployment in the economy. 
C)  the unemployment rate is 0%. 
D)  there is no cyclical unemployment in the economy.

Question 14

Which of the following describes the accuracy of the Consumer Price Index?

Accepted Answer

A)  Changes in the CPI accurately reflect the true rate of inflation. 
B)  Changes in the CPI understate the true rate of inflation. 
C)  Changes in the CPI overstate the true rate of inflation. 
D)  Changes in the CPI are unrelated to the true rate of inflation. 
A)  Changes in the CPI accurately reflect the true rate of inflation. 
B)  Changes in the CPI understate the true rate of inflation. 
C)  Changes in the CPI overstate the true rate of inflation. 
D)  Changes in the CPI are unrelated to the true rate of inflation.

Question 15

The PPI is the

Accepted Answer

A)  price parity index. 
B)  prime producer index. 
C)  producer price index. 
D)  production performance indicator. 
A)  price parity index. 
B)  prime producer index. 
C)  producer price index. 
D)  production performance indicator.

Question 16

If inflation increases unexpectedly,then

Accepted Answer

A)  borrowers pay a higher real interest rate than they expected. 
B)  lenders receive a lower real interest rate than they expected. 
C)  lenders gain and borrowers gain. 
D)  neither borrowers nor lenders lose. 
A)  borrowers pay a higher real interest rate than they expected. 
B)  lenders receive a lower real interest rate than they expected. 
C)  lenders gain and borrowers gain. 
D)  neither borrowers nor lenders lose.

Question 17

The nominal interest rate will be less than the real interest rate when

Accepted Answer

A)  the rate of inflation is positive but decreasing. 
B)  the rate of inflation is positive and increasing. 
C)  the rate of inflation is negative. 
D)  the real interest rate is negative. 
A)  the rate of inflation is positive but decreasing. 
B)  the rate of inflation is positive and increasing. 
C)  the rate of inflation is negative. 
D)  the real interest rate is negative.

Question 18

In September 2011,the U.S.unemployment rate was highest for

Accepted Answer

A)  whites. 
B)  Hispanics. 
C)  high school dropouts. 
D)  African-Americans. 
E)  Asians. 
A)  whites. 
B)  Hispanics. 
C)  high school dropouts. 
D)  African-Americans. 
E)  Asians.

Question 19

Table 20-2
  
-Refer to Table 20-2.Suppose that the data in the table above reflect the price levels in the economy.What is the inflation rate in between 2010 and 2011?

Accepted Answer

A)  2% 
B)  5% 
C)  10% 
D)  12% 
E)  20% 
A)  2% 
B)  5% 
C)  10% 
D)  12% 
E)  20%

Question 20

An efficiency wage

Accepted Answer

A)  is higher than the market wage and tends to increase productivity. 
B)  is lower than the market wage and tends to increase productivity. 
C)  is higher than the market wage and tends to decrease productivity. 
D)  is lower than the market wage and tends to decrease productivity. 
A)  is higher than the market wage and tends to increase productivity. 
B)  is lower than the market wage and tends to increase productivity. 
C)  is higher than the market wage and tends to decrease productivity. 
D)  is lower than the market wage and tends to decrease productivity.

Monthly expenditures for a family of 4 in 2010 averaged $1,400.In 2011,the cost of the same purchases was $1,500.If 2010 is the base year,what was the CPI in 2011?

When the price of gasoline rises,some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars.The fact that the CPI does not fully account for such changes in consumer behavior is called

The U.S.unemployment insurance program

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

Table 20-8 -Refer to Table 20-8.Looking at the table above,real average hourly earnings between 2010 and 2011 changed by

What effect does the payment of government unemployment insurance have on the unemployment rate?

Explain what economists mean by full employment and why this rate of unemployment is not zero.

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.The CPI over that year rises from 180 to 200.What is the real interest rate you are paying?

In recent years,economists have come to rely more on the establishment survey rather than the household survey to analyze current labor market statistics.

Table 20-8 -Between 2011 and 2012,the CPI of a small nation rose from 182 to 185.If household incomes rose by 3% during that period of time,which of the following is true?

The broadest measure of the price level that includes all final goods and services is

Table 20-5 -Refer to Table 20-5.Suppose an economy has only three goods and the typical family purchases the amounts given in the table above.If 2005 is the base year,then what is the CPI for 2012?

When the labor market is at full employment

Which of the following describes the accuracy of the Consumer Price Index?

The PPI is the

If inflation increases unexpectedly,then

The nominal interest rate will be less than the real interest rate when

In September 2011,the U.S.unemployment rate was highest for

Table 20-2 -Refer to Table 20-2.Suppose that the data in the table above reflect the price levels in the economy.What is the inflation rate in between 2010 and 2011?

An efficiency wage

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

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

Exam 9: Unemployment and Inflation

Monthly expenditures for a family of 4 in 2010 averaged $1,400.In 2011,the cost of the same purchases was $1,500.If 2010 is the base year,what was the CPI in 2011?

When the price of gasoline rises,some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars.The fact that the CPI does not fully account for such changes in consumer behavior is called

The U.S.unemployment insurance program

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

Table 20-8 -Refer to Table 20-8.Looking at the table above,real average hourly earnings between 2010 and 2011 changed by

What effect does the payment of government unemployment insurance have on the unemployment rate?

Explain what economists mean by full employment and why this rate of unemployment is not zero.

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.The CPI over that year rises from 180 to 200.What is the real interest rate you are paying?

In recent years,economists have come to rely more on the establishment survey rather than the household survey to analyze current labor market statistics.

Table 20-8 -Between 2011 and 2012,the CPI of a small nation rose from 182 to 185.If household incomes rose by 3% during that period of time,which of the following is true?

The broadest measure of the price level that includes all final goods and services is

Table 20-5 -Refer to Table 20-5.Suppose an economy has only three goods and the typical family purchases the amounts given in the table above.If 2005 is the base year,then what is the CPI for 2012?

When the labor market is at full employment

Which of the following describes the accuracy of the Consumer Price Index?

The PPI is the

If inflation increases unexpectedly,then

The nominal interest rate will be less than the real interest rate when

In September 2011,the U.S.unemployment rate was highest for

Table 20-2 -Refer to Table 20-2.Suppose that the data in the table above reflect the price levels in the economy.What is the inflation rate in between 2010 and 2011?

An efficiency wage

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

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