Question 1

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

Accepted Answer

A)  17.0 percent 
B)  6.8 percent 
C)  8.3 percent 
D)  -4.0 percent 
A)  17.0 percent 
B)  6.8 percent 
C)  8.3 percent 
D)  -4.0 percent

Question 2

In a period of rapid,unexpected inflation,resources can be lost

Accepted Answer

A)  when firms invest in research and development instead of forecasting inflation. 
B)  when firms use resources to forecast inflation. 
C)  because rapid inflation almost always turns into a hyperinflation. 
D)  Both answers B and C are correct. 
A)  when firms invest in research and development instead of forecasting inflation. 
B)  when firms use resources to forecast inflation. 
C)  because rapid inflation almost always turns into a hyperinflation. 
D)  Both answers B and C are correct.

Question 3

The employment-to-population ratio equals

Accepted Answer

A)  (labor force)/(working-age population) × 100. 
B)  (number of people employed)/(labor force) × 100. 
C)  (number of people with full-time jobs)/(labor force) × 100. 
D)  (number of people employed)/(working-age population) × 100. 
A)  (labor force)/(working-age population) × 100. 
B)  (number of people employed)/(labor force) × 100. 
C)  (number of people with full-time jobs)/(labor force) × 100. 
D)  (number of people employed)/(working-age population) × 100.

Question 4

Structural unemployment usually lasts longer than frictional unemployment.

Accepted Answer

A) True 
 B)False

Question 5

If the base year CPI basket costs $250 and next year the CPI basket costs $275,what is next year's CPI?

Accepted Answer

The CPI eq

Question 6

When the automobile replaced horse-drawn carriages as the principal means of transportation,firms producing horse-drawn carriages went bankrupt and permanently laid off all their workers,thereby increasing

Accepted Answer

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

Question 7

Define and give an example of how a spell of frictional unemployment can begin.

Accepted Answer

Frictional unemployment is the unemploym

Question 8

In an economy,40 million people are employed,2 million are unemployed,and 8 million are not in the labor force.What is the labor force participation rate?

Accepted Answer

A)  83 percent 
B)  84 percent 
C)  80 percent 
D)  87.5 percent 
A)  83 percent 
B)  84 percent 
C)  80 percent 
D)  87.5 percent

Question 9

Is the CPI a biased measure of the inflation rate?
Explain your answer.

Accepted Answer

There are at least four sources of bias

Question 10

$$\begin{array} { | c | c | } 
\hline \text { Year } & \text { CPI } \
\hline 1997 & 152.5 \
\hline 1998 & 157.0 \
\hline 1999 & 160.6 \
\hline 2000 & 163.1 \
\hline 2001 & 166.7 \
\hline 2002 & 172.3 \
\hline
\end{array}$$
-The table above gives the U.S.CPI for six years.Calculate the inflation rates between 1997 to 1998,1998 to 1999,1999 to 2000,2000 to 2001,and 2001 to 2002.

Accepted Answer

Between 1997 to 1998,the inflation rate

Question 11

In an economy,23 million people are employed and 2 million are unemployed,but 5 million part-time workers would prefer full-time work.What is the unemployment rate?

Accepted Answer

A)  23.2 percent 
B)  6.7 percent 
C)  8 percent 
D)  25 percent 
A)  23.2 percent 
B)  6.7 percent 
C)  8 percent 
D)  25 percent

Question 12

When the economy switches production toward services and away from manufacturing and workers in the manufacturing industry are permanently laid off,

Accepted Answer

A)  frictional unemployment decreases. 
B)  structural unemployment increases. 
C)  cyclical unemployment increases. 
D)  frictional and cyclical unemployment increase. 
A)  frictional unemployment decreases. 
B)  structural unemployment increases. 
C)  cyclical unemployment increases. 
D)  frictional and cyclical unemployment increase.

Question 13

The unemployment rate equals [(the number of people unemployed)/(the population)] × 100.

Accepted Answer

A) True 
 B)False

Question 14

The natural unemployment rate

Accepted Answer

A)  occurs when the unemployment rate is 0 percent. 
B)  is the unemployment rate when there is no structural unemployment. 
C)  is the unemployment rate at full employment. 
D)  is the unemployment rate when there is only cyclical unemployment. 
A)  occurs when the unemployment rate is 0 percent. 
B)  is the unemployment rate when there is no structural unemployment. 
C)  is the unemployment rate at full employment. 
D)  is the unemployment rate when there is only cyclical unemployment.

Question 15

Between August 2011 and August 2012 the number of discouraged workers decreased from 977,000 to 844,000.Assuming the change resulted from discouraged workers starting to make specific efforts to find a job again,this change creates

Accepted Answer

A)  an increase to the U-3 unemployment rate. 
B)  a decrease to the U-3 unemployment rate. 
C)  no change to the U-3 unemployment rate. 
D)  a decrease in the labor force participation rate. 
A)  an increase to the U-3 unemployment rate. 
B)  a decrease to the U-3 unemployment rate. 
C)  no change to the U-3 unemployment rate. 
D)  a decrease in the labor force participation rate.

Question 16

An unemployment rate of zero percent cannot be expected because

Accepted Answer

A)  there are some people who do not want to work. 
B)  there will always be discouraged workers. 
C)  some portion of the labor force will always be between jobs. 
D)  cyclical unemployment will always exist. 
A)  there are some people who do not want to work. 
B)  there will always be discouraged workers. 
C)  some portion of the labor force will always be between jobs. 
D)  cyclical unemployment will always exist.

Question 17

The biases in the CPI include the

Accepted Answer

A)  old goods, unemployment, and inflation biases. 
B)  new goods, quality change, and substitution biases. 
C)  old goods, new goods, and quality change biases. 
D)  substitution, new goods, and old goods biases. 
A)  old goods, unemployment, and inflation biases. 
B)  new goods, quality change, and substitution biases. 
C)  old goods, new goods, and quality change biases. 
D)  substitution, new goods, and old goods biases.

Question 18

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

Accepted Answer

A)  125 
B)  130 
C)  140 
D)  145 
A)  125 
B)  130 
C)  140 
D)  145

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 inflation rate in 2013?

Accepted Answer

A)  69 percent 
B)  zero 
C)  31 percent 
D)  2 percent 
A)  69 percent 
B)  zero 
C)  31 percent 
D)  2 percent

Question 20

Which of the following most likely would decrease frictional unemployment?

Accepted Answer

A)  an increase in the number of high school and college graduates 
B)  effective Internet-based employment services and job registries 
C)  an expansion of unemployment compensation benefits 
D)  All of the above would decrease frictional unemployment. 
A)  an increase in the number of high school and college graduates 
B)  effective Internet-based employment services and job registries 
C)  an expansion of unemployment compensation benefits 
D)  All of the above would decrease frictional unemployment.

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 C?

In a period of rapid,unexpected inflation,resources can be lost

The employment-to-population ratio equals

Structural unemployment usually lasts longer than frictional unemployment.

If the base year CPI basket costs $250 and next year the CPI basket costs $275,what is next year's CPI?

When the automobile replaced horse-drawn carriages as the principal means of transportation,firms producing horse-drawn carriages went bankrupt and permanently laid off all their workers,thereby increasing

Define and give an example of how a spell of frictional unemployment can begin.

In an economy,40 million people are employed,2 million are unemployed,and 8 million are not in the labor force.What is the labor force participation rate?

Is the CPI a biased measure of the inflation rate? Explain your answer.

Year CPI 1997 152.5 1998 157.0 1999 160.6 2000 163.1 2001 166.7 2002 172.3 -The table above gives the U.S.CPI for six years.Calculate the inflation rates between 1997 to 1998,1998 to 1999,1999 to 2000,2000 to 2001,and 2001 to 2002.

In an economy,23 million people are employed and 2 million are unemployed,but 5 million part-time workers would prefer full-time work.What is the unemployment rate?

When the economy switches production toward services and away from manufacturing and workers in the manufacturing industry are permanently laid off,

The unemployment rate equals [(the number of people unemployed)/(the population)] × 100.

The natural unemployment rate

Between August 2011 and August 2012 the number of discouraged workers decreased from 977,000 to 844,000.Assuming the change resulted from discouraged workers starting to make specific efforts to find a job again,this change creates

An unemployment rate of zero percent cannot be expected because

The biases in the CPI include the

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 price level belongs in space D?

Which of the following most likely would decrease frictional unemployment?

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

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 C?

In a period of rapid,unexpected inflation,resources can be lost

The employment-to-population ratio equals

Structural unemployment usually lasts longer than frictional unemployment.

If the base year CPI basket costs $250 and next year the CPI basket costs $275,what is next year's CPI?

When the automobile replaced horse-drawn carriages as the principal means of transportation,firms producing horse-drawn carriages went bankrupt and permanently laid off all their workers,thereby increasing

Define and give an example of how a spell of frictional unemployment can begin.

In an economy,40 million people are employed,2 million are unemployed,and 8 million are not in the labor force.What is the labor force participation rate?

Is the CPI a biased measure of the inflation rate? Explain your answer.

Year CPI 1997 152.5 1998 157.0 1999 160.6 2000 163.1 2001 166.7 2002 172.3 -The table above gives the U.S.CPI for six years.Calculate the inflation rates between 1997 to 1998,1998 to 1999,1999 to 2000,2000 to 2001,and 2001 to 2002.

In an economy,23 million people are employed and 2 million are unemployed,but 5 million part-time workers would prefer full-time work.What is the unemployment rate?

When the economy switches production toward services and away from manufacturing and workers in the manufacturing industry are permanently laid off,

The unemployment rate equals [(the number of people unemployed)/(the population)] × 100.

The natural unemployment rate

Between August 2011 and August 2012 the number of discouraged workers decreased from 977,000 to 844,000.Assuming the change resulted from discouraged workers starting to make specific efforts to find a job again,this change creates

An unemployment rate of zero percent cannot be expected because

The biases in the CPI include the

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 price level belongs in space D?

Which of the following most likely would decrease frictional unemployment?

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