Question 1

Suppose the country of Tiny Town experienced frictional unemployment.This frictional unemployment would

Accepted Answer

A)  definitely signal that the country is in a recession. 
B)  be considered a natural occurrence in a growing economy. 
C)  signal that there are more job leavers than job losers. 
D)  signal that the number of discouraged workers is growing. 
A)  definitely signal that the country is in a recession. 
B)  be considered a natural occurrence in a growing economy. 
C)  signal that there are more job leavers than job losers. 
D)  signal that the number of discouraged workers is growing.

Question 2

Can frictional unemployment ever be totally eliminated?
Explain your answer.

Accepted Answer

Frictional unemployment arises from norm

Question 3

When the unemployment rate is less than the natural unemployment rate,

Accepted Answer

A)  the output gap is positive. 
B)  the output gap equals zero. 
C)  the output gap is negative. 
D)  None of the above is possible because it is impossible for the unemployment rate to be less than the natural rate. 
A)  the output gap is positive. 
B)  the output gap equals zero. 
C)  the output gap is negative. 
D)  None of the above is possible because it is impossible for the unemployment rate to be less than the natural rate.

Question 4

Which of the following people would be counted as is employed in the Current Population Survey?

Accepted Answer

A)  Rich, who is working 20 hours a week but wants a full-time job 
B)  Misty, who just quit her job to return full-time to school 
C)  April, who just graduated from college and is looking for work 
D)  Jason, who was laid off from work less than 6 months ago but who has stopped looking for work 
A)  Rich, who is working 20 hours a week but wants a full-time job 
B)  Misty, who just quit her job to return full-time to school 
C)  April, who just graduated from college and is looking for work 
D)  Jason, who was laid off from work less than 6 months ago but who has stopped looking for work

Question 5

Discouraged workers ________ counted as officially unemployed because they ________.

Accepted Answer

A)  are; are not working 
B)  are; are still in the labor force 
C)  are not; are not qualified to work 
D)  are not; are not actively seeking work 
A)  are; are not working 
B)  are; are still in the labor force 
C)  are not; are not qualified to work 
D)  are not; are not actively seeking work

Question 6

If the economy enters a recession,

Accepted Answer

A)  frictional unemployment increases. 
B)  structural unemployment decreases. 
C)  cyclical unemployment increases. 
D)  the number of workers on layoff decreases. 
A)  frictional unemployment increases. 
B)  structural unemployment decreases. 
C)  cyclical unemployment increases. 
D)  the number of workers on layoff decreases.

Question 7

2012 2013
 $$\begin{array} { | l | c | c | c | c | } 
\hline \text { Item } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline \text { Books } & 10 & \$ 30 & 8 & \$ 50 \
\hline \text { Pens } & 20 & \$ 1 & 15 & \$ 2 \
\hline
\end{array}$$
-In 2012,consumers in Dexter consumed only books and pens.The prices and quantities for 2012 and 2013 are listed in the table above.The reference base period for Dexter's CPI is 2012.What is the cost of the CPI basket in 2013?

Accepted Answer

A)  $430 
B)  $335 
C)  $320 
D)  $540 
A)  $430 
B)  $335 
C)  $320 
D)  $540

Question 8

$$\begin{array} { | c | c | c | } 
\hline \text { Year } & \text { Price index } & \begin{array} { c } 
\text { Inflation rate } \
\text { (percent) }
\end{array} \
\hline 1 & 100 & \
\hline 2 & 117 & \text { A } \
\hline 3 & 125 & \text { B } \
\hline 4 & 120 & \text { C } \
\hline 5 & \mathrm { D } & 8.3 \
\hline 6 & 150 & \text { E } \
\hline
\end{array}$$
-In the table above,what inflation rate belongs in space E?

Accepted Answer

A)  17.0 percent 
B)  6.8 percent 
C)  8.3 percent 
D)  15.4 percent 
A)  17.0 percent 
B)  6.8 percent 
C)  8.3 percent 
D)  15.4 percent

Question 9

$$\begin{array} { | l | c | } 
\hline { \text { Category } } & \begin{array} { c } 
\text { Number } \
\text { (millions) }
\end{array} \
\hline \text { Discouraged workers } & 15 \
\hline \text { Unemployed workers } & 40 \
\hline \text { Employed workers } & 100 \
\hline \begin{array} { l } 
\text { Population (16years and } \
\text { over) }
\end{array} & 225 \
\hline
\end{array}$$
-In the above table,the working age population is

Accepted Answer

A)  225 million. 
B)  100 million. 
C)  140 million. 
D)  155 million. 
A)  225 million. 
B)  100 million. 
C)  140 million. 
D)  155 million.

Question 10

In a country with a working-age population of 130 million,90 million workers are employed and 10 million workers are unemployed.What is the unemployment rate?

Accepted Answer

A)  5.0 percent 
B)  7.1 percent 
C)  7.7 percent 
D)  10.0 percent 
A)  5.0 percent 
B)  7.1 percent 
C)  7.7 percent 
D)  10.0 percent

Question 11

The unemployment rate equals

Accepted Answer

A)  the total number of people without jobs in a given period. 
B)  the percentage of the population not currently employed. 
C)  the rate of change in unemployment figures from one period to another. 
D)  the percentage of the labor force currently unemployed. 
A)  the total number of people without jobs in a given period. 
B)  the percentage of the population not currently employed. 
C)  the rate of change in unemployment figures from one period to another. 
D)  the percentage of the labor force currently unemployed.

Question 12

$$\begin{array} { | l | c | c | } 
\hline  { \text { Item } } & \begin{array} { c } 
\text { Quantity } \
( 2012 )
\end{array} & \begin{array} { c } 
\text { Price } \
( 2012 )
\end{array} \
\hline \text { Shampoo } & 25 & \$ 2.35 \
\hline \text { Pizza } & 15 & \$ 7.50 \
\hline
\end{array}$$ 
 $$\begin{array} { | l | c | c | } 
\hline { \text { Item } } & \begin{array} { c } 
\text { Quantity } \
( 2012 )
\end{array} & \begin{array} { c } 
\text { Price } \
( 2013 )
\end{array} \
\hline \text { Shampoo } & 25 & \$ 2.50 \
\hline \text { Pizza } & 15 & \$ 7.75 \
\hline
\end{array}$$
-The tables above give the purchases of an average consumer in a small economy.(These consumers purchase only shampoo and pizza.) Suppose 2012 is the reference base period.
a) What is the cost of the CPI basket in 2012 and 2013?
b) What is the CPI in 2012 and in 2013?
c) What is the inflation rate between 2012 and 2013?

Accepted Answer

a)For 2012 the CPI basket costs $171.25.

Question 13

Cyclical unemployment ________ during expansions and ________ during recessions.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases

Question 14

If the CPI this year is 220 and was 200 in last year,the annual inflation rate between the two years is

Accepted Answer

A)  5 percent. 
B)  10 percent. 
C)  20 percent. 
D)  2 percent. 
A)  5 percent. 
B)  10 percent. 
C)  20 percent. 
D)  2 percent.

Question 15

Which of the following best fits the definition of unemployed?

Accepted Answer

A)  retired and not working 
B)  working less than a full work week 
C)  not working but looking for a job 
D)  not working and not looking for work 
A)  retired and not working 
B)  working less than a full work week 
C)  not working but looking for a job 
D)  not working and not looking for work

Question 16

Which of the following is NOT included in the working-age population?

Accepted Answer

A)  discouraged workers 
B)  people waiting to be called back to a job after being laid off 
C)  retirees under the age of 55 
D)  people in prison 
A)  discouraged workers 
B)  people waiting to be called back to a job after being laid off 
C)  retirees under the age of 55 
D)  people in prison

Question 17

Explain the relationship(s) between full employment,cyclical unemployment,the natural unemployment rate,and potential GDP.

Accepted Answer

The economy is at full employment when t

Question 18

Suppose the labor force in Tiny Town is 100 people.If the ________ in Tiny Town is 150 people,the labor force participation rate equals ________ multiplied by 100.

Accepted Answer

A)  working age population; 100/150 
B)  working age population; 100/250 
C)  number of employed persons; 100/250 
D)  number of employed persons; 100/150 
A)  working age population; 100/150 
B)  working age population; 100/250 
C)  number of employed persons; 100/250 
D)  number of employed persons; 100/150

Question 19

The table below shows the price index for Zimbabwe starting in 2000. $$\begin{array} { | c | c | } 
\hline \text { Year } & \text { Price Index } \
\hline 2000 & 100.0 \
\hline 2001 & 173.4 \
\hline 2002 & 404.37 \
\hline 2003 & 1880.5 \
\hline 2004 & 8462.2 \
\hline 2005 & 28,586.6 \
\hline 2006 & 319,222.5 \
\hline
\end{array}$$
www.econstats.com
Which of the following statements correctly describe the behavior of prices in Zimbabwe?
i. The cost of the CPI basket increased.
iI. The inflation rate was 73.4 percent between 2000 and 2001.

Accepted Answer

A)  I only 
B)  II only 
C)  both I and II 
D)  neither I nor II 
A)  I only 
B)  II only 
C)  both I and II 
D)  neither I nor II

Question 20

$$\begin{array} { | l | c | } 
\hline { \text { Category } } & \begin{array} { c } 
\text { Number } \
\text { (millions) }
\end{array} \
\hline \text { Discouraged workers } & 15 \
\hline \text { Unemployed workers } & 40 \
\hline \text { Employed workers } & 100 \
\hline \begin{array} { l } 
\text { Population (16years and } \
\text { over) }
\end{array} & 225 \
\hline
\end{array}$$
-In the above table,the number of marginally attached workers is

Accepted Answer

A)  40 million. 
B)  55 million. 
C)  15 million. 
D)  100 million. 
A)  40 million. 
B)  55 million. 
C)  15 million. 
D)  100 million.

Suppose the country of Tiny Town experienced frictional unemployment.This frictional unemployment would

Can frictional unemployment ever be totally eliminated? Explain your answer.

When the unemployment rate is less than the natural unemployment rate,

Which of the following people would be counted as is employed in the Current Population Survey?

Discouraged workers counted as officially unemployed because they .

If the economy enters a recession,

Year Price index Inflation rate (percent) 1 100 2 117 A 3 125 B 4 120 C 5 8.3 6 150 E -In the table above,what inflation rate belongs in space E?

Category Number (millions) Discouraged workers 15 Unemployed workers 40 Employed workers 100 Population (16years and over) 225 -In the above table,the working age population is

In a country with a working-age population of 130 million,90 million workers are employed and 10 million workers are unemployed.What is the unemployment rate?

The unemployment rate equals

Cyclical unemployment during expansions and during recessions.

If the CPI this year is 220 and was 200 in last year,the annual inflation rate between the two years is

Which of the following best fits the definition of unemployed?

Which of the following is NOT included in the working-age population?

Explain the relationship(s) between full employment,cyclical unemployment,the natural unemployment rate,and potential GDP.

Suppose the labor force in Tiny Town is 100 people.If the in Tiny Town is 150 people,the labor force participation rate equals multiplied by 100.

Category Number (millions) Discouraged workers 15 Unemployed workers 40 Employed workers 100 Population (16years and over) 225 -In the above table,the number of marginally attached workers is

What Is Economics

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Exam 5: Monitoring Jobs and Inflation

Suppose the country of Tiny Town experienced frictional unemployment.This frictional unemployment would

Can frictional unemployment ever be totally eliminated? Explain your answer.

When the unemployment rate is less than the natural unemployment rate,

Which of the following people would be counted as is employed in the Current Population Survey?

Discouraged workers ________ counted as officially unemployed because they ________.

If the economy enters a recession,

Year Price index Inflation rate (percent) 1 100 2 117 A 3 125 B 4 120 C 5 8.3 6 150 E -In the table above,what inflation rate belongs in space E?

Category Number (millions) Discouraged workers 15 Unemployed workers 40 Employed workers 100 Population (16years and over) 225 -In the above table,the working age population is

In a country with a working-age population of 130 million,90 million workers are employed and 10 million workers are unemployed.What is the unemployment rate?

The unemployment rate equals

Cyclical unemployment ________ during expansions and ________ during recessions.

If the CPI this year is 220 and was 200 in last year,the annual inflation rate between the two years is

Which of the following best fits the definition of unemployed?

Which of the following is NOT included in the working-age population?

Explain the relationship(s) between full employment,cyclical unemployment,the natural unemployment rate,and potential GDP.

Suppose the labor force in Tiny Town is 100 people.If the ________ in Tiny Town is 150 people,the labor force participation rate equals ________ multiplied by 100.

Category Number (millions) Discouraged workers 15 Unemployed workers 40 Employed workers 100 Population (16years and over) 225 -In the above table,the number of marginally attached workers is

What Is Economics

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Discouraged workers counted as officially unemployed because they .

Cyclical unemployment during expansions and during recessions.

Suppose the labor force in Tiny Town is 100 people.If the in Tiny Town is 150 people,the labor force participation rate equals multiplied by 100.