Question 1

The natural unemployment rate is the unemployment rate that exists when there is no

Accepted Answer

A)  structural unemployment. 
B)  frictional unemployment. 
C)  cyclical unemployment. 
D)  cyclical or structural unemployment. 
A)  structural unemployment. 
B)  frictional unemployment. 
C)  cyclical unemployment. 
D)  cyclical or structural unemployment.

Question 2

What is the commodity substitution bias?
What effect does it have on the CPI?

Accepted Answer

The commodity substitution bias refers t

Question 3

In a country with a working-age population of 100 million,70 million workers are employed and 5 million workers are unemployed.What is the labor force participation rate?

Accepted Answer

A)  70 percent 
B)  5 percent 
C)  75 percent 
D)  7 percent 
A)  70 percent 
B)  5 percent 
C)  75 percent 
D)  7 percent

Question 4

Last year's price level was 120 and since then there has been a 5 percent inflation.This year's price level is

Accepted Answer

A)  125. 
B)  126. 
C)  130. 
D)  none of the above 
A)  125. 
B)  126. 
C)  130. 
D)  none of the above

Question 5

The New York Times reported in November 2008 that 240,000 additional people lost their jobs which increased the unemployment rate to 6.5 percent. In addition,it was noted that a large number of college graduates were "taking jobs that do not require a college degree." It was also expected that "teens will be thrown out of the labor market....causing youths to miss experience" that could help them prepare for higher-skilled jobs. The article reflects the idea that unemployment is a problem because it results in

Accepted Answer

A)  a loss of human capital. 
B)  fewer discouraged workers. 
C)  a loss of income. 
D)  a decrease in the labor force. 
A)  a loss of human capital. 
B)  fewer discouraged workers. 
C)  a loss of income. 
D)  a decrease in the labor force.

Question 6

A recent accounting graduate from a major business school is searching for a place to begin his career as an accountant.This individual is best considered as

Accepted Answer

A)  structurally unemployed. 
B)  seasonally unemployed. 
C)  cyclically unemployed. 
D)  frictionally unemployed. 
A)  structurally unemployed. 
B)  seasonally unemployed. 
C)  cyclically unemployed. 
D)  frictionally unemployed.

Question 7

Give an example of a cyclically unemployed person.

Accepted Answer

A person who loses h

Question 8

If the number of people unemployed is 100,the number of people employed is 1000,and the working-age population is 1400,then the unemployment rate is

Accepted Answer

A)  6.6 percent. 
B)  10 percent. 
C)  9.1 percent. 
D)  7.1 percent. 
A)  6.6 percent. 
B)  10 percent. 
C)  9.1 percent. 
D)  7.1 percent.

Question 9

A typical household in Orangeland consumes only orange juice and shorts.Last year,which was the base year,the household spent $400 on juice and $120 on shorts.In the base year,juice was $2 a bottle and shorts were $10 a pair.This year,juice is $3 a bottle,shorts are $12 a pair,and a typical household has bought 180 bottles of juice and 14 pairs of shorts.
a) What is the basket used in the CPI?
b) Calculate the CPI in the current year.
c) Calculate the inflation rate in the current year.
d) Is the inflation rate that you've calculated likely to be biased?
Why or why not?

Accepted Answer

a) The CPI basket is the quantities boug

Question 10

When the economy is at full employment the unemployment rate equals the natural unemployment rate.

Accepted Answer

A) True 
 B)False

Question 11

An individual with good job prospects who is between jobs is best considered as

Accepted Answer

A)  structurally unemployed. 
B)  cyclically unemployed. 
C)  not in the labor force. 
D)  frictionally unemployed. 
A)  structurally unemployed. 
B)  cyclically unemployed. 
C)  not in the labor force. 
D)  frictionally unemployed.

Question 12

If unemployment is at the natural rate,then there

Accepted Answer

A)  is no cyclical unemployment. 
B)  is no frictional unemployment. 
C)  will be cyclical and frictional unemployment but not structural unemployment. 
D)  will be only cyclical unemployment. 
A)  is no cyclical unemployment. 
B)  is no frictional unemployment. 
C)  will be cyclical and frictional unemployment but not structural unemployment. 
D)  will be only cyclical unemployment.

Question 13

The first step in measuring the CPI is to

Accepted Answer

A)  select the market basket. 
B)  conduct a monthly survey. 
C)  collect prices for the basket of goods and services. 
D)  interview businesses. 
A)  select the market basket. 
B)  conduct a monthly survey. 
C)  collect prices for the basket of goods and services. 
D)  interview businesses.

Question 14

The official U-3 unemployment rate includes the total number of people who

Accepted Answer

A)  have jobs or are currently looking for jobs. 
B)  are available and looking for work but unable to find employment. 
C)  would like to have a job but have stopped seeking work. 
D)  would like to have a full-time job but are working part-time. 
A)  have jobs or are currently looking for jobs. 
B)  are available and looking for work but unable to find employment. 
C)  would like to have a job but have stopped seeking work. 
D)  would like to have a full-time job but are working part-time.

Question 15

During a recession,people drop out of the labor force because they are unable to find a job.All else the same,this

Accepted Answer

A)  increases the official U-3 unemployment rate. 
B)  decreases the official U-3 unemployment rate. 
C)  does not change the official U-3 unemployment rate. 
D)  increases the official U-3 unemployment rate and the labor force participation rate. 
A)  increases the official U-3 unemployment rate. 
B)  decreases the official U-3 unemployment rate. 
C)  does not change the official U-3 unemployment rate. 
D)  increases the official U-3 unemployment rate and the labor force participation rate.

Question 16

If the economy is at full employment,

Accepted Answer

A)  the entire population is employed. 
B)  the entire labor force is employed. 
C)  the only unemployment is frictional unemployment plus discouraged workers. 
D)  real GDP equals potential GDP. 
A)  the entire population is employed. 
B)  the entire labor force is employed. 
C)  the only unemployment is frictional unemployment plus discouraged workers. 
D)  real GDP equals potential GDP.

Question 17

$$\begin{array} { | l | c | } 
\hline{ \text { Component } } & \begin{array} { c } 
\text { Number of } \
\text { people }
\end{array} \
\hline \text { Total population } & 2600 \
\hline \text { Working-age population } & 2000 \
\hline \text { Not in labor force } & 500 \
\hline \text { Employed } & 1300 \
\hline
\end{array}$$
-Using the information in the table above,calculate the number of people in the labor force.

Accepted Answer

A)  2500 
B)  2100 
C)  1500 
D)  800 
A)  2500 
B)  2100 
C)  1500 
D)  800

Question 18

Suppose there are 180 million employed people and 20 million unemployed people.
a) What is the unemployment rate?
b) Suppose that 5 million unemployed people give up their search for jobs and become discouraged workers.What is the new official unemployment rate?

Accepted Answer

a)The unemployment rate is (20 million u

Question 19

The total number of people aged 16 years and over who are not institutionalized ________.

Accepted Answer

A)  equals the number of employed plus unemployed 
B)  is the working-age population 
C)  does not include students 
D)  is the labor force 
A)  equals the number of employed plus unemployed 
B)  is the working-age population 
C)  does not include students 
D)  is the labor force

Question 20

An economy is at full employment when ________.

Accepted Answer

A)  the unemployment rate is zero 
B)  there is no frictional unemployment 
C)  the unemployment rate equals the natural unemployment rate 
D)  there is no structural unemployment 
A)  the unemployment rate is zero 
B)  there is no frictional unemployment 
C)  the unemployment rate equals the natural unemployment rate 
D)  there is no structural unemployment

The natural unemployment rate is the unemployment rate that exists when there is no

What is the commodity substitution bias? What effect does it have on the CPI?

In a country with a working-age population of 100 million,70 million workers are employed and 5 million workers are unemployed.What is the labor force participation rate?

Last year's price level was 120 and since then there has been a 5 percent inflation.This year's price level is

A recent accounting graduate from a major business school is searching for a place to begin his career as an accountant.This individual is best considered as

Give an example of a cyclically unemployed person.

If the number of people unemployed is 100,the number of people employed is 1000,and the working-age population is 1400,then the unemployment rate is

When the economy is at full employment the unemployment rate equals the natural unemployment rate.

An individual with good job prospects who is between jobs is best considered as

If unemployment is at the natural rate,then there

The first step in measuring the CPI is to

The official U-3 unemployment rate includes the total number of people who

During a recession,people drop out of the labor force because they are unable to find a job.All else the same,this

If the economy is at full employment,

Component Number of people Total population 2600 Working-age population 2000 Not in labor force 500 Employed 1300 -Using the information in the table above,calculate the number of people in the labor force.

Suppose there are 180 million employed people and 20 million unemployed people. a) What is the unemployment rate? b) Suppose that 5 million unemployed people give up their search for jobs and become discouraged workers.What is the new official unemployment rate?

The total number of people aged 16 years and over who are not institutionalized ________.

An economy is at full employment when ________.

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

The natural unemployment rate is the unemployment rate that exists when there is no

What is the commodity substitution bias? What effect does it have on the CPI?

In a country with a working-age population of 100 million,70 million workers are employed and 5 million workers are unemployed.What is the labor force participation rate?

Last year's price level was 120 and since then there has been a 5 percent inflation.This year's price level is

A recent accounting graduate from a major business school is searching for a place to begin his career as an accountant.This individual is best considered as

Give an example of a cyclically unemployed person.

If the number of people unemployed is 100,the number of people employed is 1000,and the working-age population is 1400,then the unemployment rate is

When the economy is at full employment the unemployment rate equals the natural unemployment rate.

An individual with good job prospects who is between jobs is best considered as

If unemployment is at the natural rate,then there

The first step in measuring the CPI is to

The official U-3 unemployment rate includes the total number of people who

During a recession,people drop out of the labor force because they are unable to find a job.All else the same,this

If the economy is at full employment,

Component Number of people Total population 2600 Working-age population 2000 Not in labor force 500 Employed 1300 -Using the information in the table above,calculate the number of people in the labor force.

Suppose there are 180 million employed people and 20 million unemployed people. a) What is the unemployment rate? b) Suppose that 5 million unemployed people give up their search for jobs and become discouraged workers.What is the new official unemployment rate?

The total number of people aged 16 years and over who are not institutionalized ________.

An economy is at full employment when ________.

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