Question 1

If the basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year,the CPI for the latter year equals

Accepted Answer

A)  200. 
B)  225. 
C)  325. 
D)  450. 
A)  200. 
B)  225. 
C)  325. 
D)  450.

Question 2

In August 2012,the official U-3 unemployment rate dropped from 8.3 percent to 8.1 percent. This change could have been caused by

Accepted Answer

A)  unemployed workers giving up looking for a job. 
B)  part-time workers getting a full-time job. 
C)  full-time workers becoming part-time workers. 
D)  workers who had previously given up looking for a job starting to look again. 
A)  unemployed workers giving up looking for a job. 
B)  part-time workers getting a full-time job. 
C)  full-time workers becoming part-time workers. 
D)  workers who had previously given up looking for a job starting to look again.

Question 3

The cost of inflation to society includes I. the opportunity costs of resources used by people to protect themselves against inflation.
II) the diversion of productive resources to forecasting inflation.

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 4

Explain what type of unemployment changes with the business cycle and how it changes.

Accepted Answer

Cyclical unemployment is the unemploymen

Question 5

In August 2012,40 percent of unemployed workers had been unemployed for 6 months or more.This long-term unemployment is of particular concern because

Accepted Answer

A)  long-term unemployment is the most costly type of unemployment. 
B)  the U-3 unemployment rate no longer includes these workers in the measurement since they are long-term unemployed. 
C)  the employment-to-population ratio no longer includes these workers in the measurement since they are long-term unemployed. 
D)  the labor force participation rate no longer includes these workers in the measurement since they are long-term unemployed. 
A)  long-term unemployment is the most costly type of unemployment. 
B)  the U-3 unemployment rate no longer includes these workers in the measurement since they are long-term unemployed. 
C)  the employment-to-population ratio no longer includes these workers in the measurement since they are long-term unemployed. 
D)  the labor force participation rate no longer includes these workers in the measurement since they are long-term unemployed.

Question 6

Inflation in Vietnam rose to 27 percent in July 2008- the highest inflation rate in Asia. "Squeezed on all sides,people are cutting back on food,limiting travel,looking for second jobs,delaying major purchases and waiting for the cost of a wedding to go down before marrying...Given this slowdown,Vietnam...is scaling back its plans for growth and economic development....Some are losing confidence in the ability of the government to manage the economy.And rumors of price increases have caused panic buying of fuel and rice." www.nytimes.com,8/23/2008
The story provides an example of how inflation

Accepted Answer

A)  redistributes income. 
B)  diverts resources from production. 
C)  leads to increases in the consumer price index. 
D)  can lead to changes in the CPI market basket. 
A)  redistributes income. 
B)  diverts resources from production. 
C)  leads to increases in the consumer price index. 
D)  can lead to changes in the CPI market basket.

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 CPI in 2013?

Accepted Answer

A)  59 
B)  129 
C)  169 
D)  102 
A)  59 
B)  129 
C)  169 
D)  102

Question 8

$\begin{array}{c}
\begin{array}{|l|}
\hline \text {Person \( A $}\
\
\
\hline \text {Person $ \mathrm{B} $}\
\
\hline \text {Person C}\
\
\
\hline \text {Person D}\
\
\
\
\
\

\hline
\end{array}
\begin{array}{l|}
\hline \text {Now that the kids are in school for a full day,this}\
\text { person is looking for work and has interviewed for }\
\text {three jobs during the past two weeks.}\
\hline \text {This person has been laid off from a job but expects}\
\text { to be called back as soon as the economy improves.}\
\hline \text {This person has just graduated from college and}\
\text { will start a new job in three weeks. In the meantime }\
\text {this person will tour the great American beaches.}\ 
\hline \text {This person was laid off last year when new}\
  \text {equipment was installed at the plant, reducing the}\
 \text { number of workers needed. Shortly after being laid}\
 \text { off, this person looked for a new job, was unable to}\
 \text { find one and then stopped looking, even though this }\
 \text {person still wants a job and is available for work.}\
\hline 
\end{array}
\end{array}\)

-The above table shows answers given by people interviewed in a government survey of households.Which individuals are considered to be a part of the labor force?

Accepted Answer

A)  C and D 
B)  B, C, and D 
C)  A, C, and D 
D)  A, B, and C 
A)  C and D 
B)  B, C, and D 
C)  A, C, and D 
D)  A, B, and C

Question 9

Of the following sequences of price levels,which correctly represents a 5 percent inflation rate?

Accepted Answer

A)  100, 100, 100, 100 
B)  100, 105, 105, 105 
C)  100, 105, 110, 115 
D)  100, 105, 110.25, 115.76 
A)  100, 100, 100, 100 
B)  100, 105, 105, 105 
C)  100, 105, 110, 115 
D)  100, 105, 110.25, 115.76

Question 10

If the economy enters an expansion,

Accepted Answer

A)  cyclical unemployment increases. 
B)  structural unemployment increases. 
C)  cyclical unemployment decreases. 
D)  structural unemployment decreases. 
A)  cyclical unemployment increases. 
B)  structural unemployment increases. 
C)  cyclical unemployment decreases. 
D)  structural unemployment decreases.

Question 11

Which of the following means that the CPI overstates the actual inflation rate?

Accepted Answer

A)  new goods bias 
B)  quality change bias 
C)  outlet substitution bias 
D)  All of the above cause the CPI to overstate inflation 
A)  new goods bias 
B)  quality change bias 
C)  outlet substitution bias 
D)  All of the above cause the CPI to overstate inflation

Question 12

A major characteristic of structural unemployment that differentiates it from frictional unemployment is that structural unemployment

Accepted Answer

A)  exists only during a recession. 
B)  exists in an expansion whereas there is no frictional unemployment in an expansion. 
C)  is a short-term problem. 
D)  usually lasts longer than frictional unemployment. 
A)  exists only during a recession. 
B)  exists in an expansion whereas there is no frictional unemployment in an expansion. 
C)  is a short-term problem. 
D)  usually lasts longer than frictional unemployment.

Question 13

The employment-to-population ratio is

Accepted Answer

A)  67 percent. 
B)  64 percent. 
C)  50 percent. 
D)  62 percent. 
A)  67 percent. 
B)  64 percent. 
C)  50 percent. 
D)  62 percent.

Question 14

Frictional unemployment is

Accepted Answer

A)  unemployment associated with business cycle recessions. 
B)  unemployment associated with the changing of jobs in a changing economy. 
C)  long-term unemployment. 
D)  unemployment associated with declining industries. 
A)  unemployment associated with business cycle recessions. 
B)  unemployment associated with the changing of jobs in a changing economy. 
C)  long-term unemployment. 
D)  unemployment associated with declining industries.

Question 15

If the CPI at the end of last year was 100 and the CPI at the end of this year was 115,the inflation rate was

Accepted Answer

A)  1.5 percent. 
B)  15 percent. 
C)  100 percent. 
D)  115 percent. 
A)  1.5 percent. 
B)  15 percent. 
C)  100 percent. 
D)  115 percent.

Question 16

Unlike cyclical unemployment,both frictional and structural unemployment rise during recessions and fall during expansions.

Accepted Answer

A) True 
 B)False

Question 17

The labor force is defined as the

Accepted Answer

A)  number of employed people plus the number of unemployed people. 
B)  number of people who are working. 
C)  number of people who are working in labor-type jobs. 
D)  number of union members who are working. 
A)  number of employed people plus the number of unemployed people. 
B)  number of people who are working. 
C)  number of people who are working in labor-type jobs. 
D)  number of union members who are working.

Question 18

Recessions and expansions affect most strongly which type of unemployment?

Accepted Answer

A)  frictional unemployment 
B)  structural unemployment 
C)  cyclical unemployment 
D)  seasonal unemployment 
A)  frictional unemployment 
B)  structural unemployment 
C)  cyclical unemployment 
D)  seasonal unemployment

Question 19

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 CPI in 2012?

Accepted Answer

A)  320 
B)  1.00 
C)  3.20 
D)  100 
A)  320 
B)  1.00 
C)  3.20 
D)  100

Question 20

When economists speak of full employment,they refer to the case in which the sum of frictional and structural unemployment is

Accepted Answer

A)  falling over time. 
B)  equal to zero. 
C)  equal to the actual amount of unemployment. 
D)  greater than the level of deficient demand unemployment. 
A)  falling over time. 
B)  equal to zero. 
C)  equal to the actual amount of unemployment. 
D)  greater than the level of deficient demand unemployment.

If the basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year,the CPI for the latter year equals

In August 2012,the official U-3 unemployment rate dropped from 8.3 percent to 8.1 percent. This change could have been caused by

The cost of inflation to society includes I. the opportunity costs of resources used by people to protect themselves against inflation. II) the diversion of productive resources to forecasting inflation.

Explain what type of unemployment changes with the business cycle and how it changes.

In August 2012,40 percent of unemployed workers had been unemployed for 6 months or more.This long-term unemployment is of particular concern because

2012 2013 Item Quantity Price Quantity Price Books 10 \ 30 8 \ 50 Pens 20 \ 1 15 \ 2 -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 CPI in 2013?

Of the following sequences of price levels,which correctly represents a 5 percent inflation rate?

If the economy enters an expansion,

Which of the following means that the CPI overstates the actual inflation rate?

A major characteristic of structural unemployment that differentiates it from frictional unemployment is that structural unemployment

The employment-to-population ratio is

Frictional unemployment is

If the CPI at the end of last year was 100 and the CPI at the end of this year was 115,the inflation rate was

Unlike cyclical unemployment,both frictional and structural unemployment rise during recessions and fall during expansions.

The labor force is defined as the

Recessions and expansions affect most strongly which type of unemployment?

2012 2013 Item Quantity Price Quantity Price Books 10 \ 30 8 \ 50 Pens 20 \ 1 15 \ 2 -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 CPI in 2012?

When economists speak of full employment,they refer to the case in which the sum of frictional and structural unemployment 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

If the basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year,the CPI for the latter year equals

In August 2012,the official U-3 unemployment rate dropped from 8.3 percent to 8.1 percent. This change could have been caused by

The cost of inflation to society includes I. the opportunity costs of resources used by people to protect themselves against inflation. II) the diversion of productive resources to forecasting inflation.

Explain what type of unemployment changes with the business cycle and how it changes.

In August 2012,40 percent of unemployed workers had been unemployed for 6 months or more.This long-term unemployment is of particular concern because

2012 2013 Item Quantity Price Quantity Price Books 10 \ 30 8 \ 50 Pens 20 \ 1 15 \ 2 -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 CPI in 2013?

Of the following sequences of price levels,which correctly represents a 5 percent inflation rate?

If the economy enters an expansion,

Which of the following means that the CPI overstates the actual inflation rate?

A major characteristic of structural unemployment that differentiates it from frictional unemployment is that structural unemployment

The employment-to-population ratio is

Frictional unemployment is

If the CPI at the end of last year was 100 and the CPI at the end of this year was 115,the inflation rate was

Unlike cyclical unemployment,both frictional and structural unemployment rise during recessions and fall during expansions.

The labor force is defined as the

Recessions and expansions affect most strongly which type of unemployment?

2012 2013 Item Quantity Price Quantity Price Books 10 \ 30 8 \ 50 Pens 20 \ 1 15 \ 2 -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 CPI in 2012?

When economists speak of full employment,they refer to the case in which the sum of frictional and structural unemployment 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