Question 1

Frictional unemployment

Accepted Answer

A)  includes discouraged workers. 
B)  is voluntary part-time unemployment. 
C)  is unemployment associated normal labor turnover. 
D)  is unemployment associated with declining industries. 
A)  includes discouraged workers. 
B)  is voluntary part-time unemployment. 
C)  is unemployment associated normal labor turnover. 
D)  is unemployment associated with declining industries.

Question 2

If the population is 300 million,with 70 million under the age of 16 and institutionalized,another 70 million not in the labor force,10 million unemployed,and 150 million employed,the employment-to-population rate is

Accepted Answer

A)  53.3 percent. 
B)  65.2 percent. 
C)  46.7 percent. 
D)  87.5 percent. 
A)  53.3 percent. 
B)  65.2 percent. 
C)  46.7 percent. 
D)  87.5 percent.

Question 3

Because of a bank merger,Ms.Davis lost her position as Vice President and had to seek work with other banks.Ms.Davis has the skills necessary to find a new job,thus she is best considered as

Accepted Answer

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

Question 4

When a woman reenters the labor force and looks for a job after spending time at home raising a child,

Accepted Answer

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

Question 5

$$\begin{array} { | l | c | c | c | } 
\hline & \begin{array} { c } 
\text { CPI basket } \
\text { quantity }
\end{array} & 2003 \text { price } & 2011 \text { price } \
\hline \text { DVDs } & 10 \text { discs } & \$ 16 \text { per disc } & \$ 12 \text { per disc } \
\hline \text { Bottled } & 200 \text { bottles } & \begin{array} { c } 
\$ 1.00 \text { per } \
\text { bottle }
\end{array} & \begin{array} { c } 
\$ 1.25 \text { per } \
\text { bottle }
\end{array} \
 \begin{array} { l } 
\text { water }
\end{array} & \text { boter } \
\hline
\end{array}$$
-If 2003 is the reference base period,what is the price index for the CPI basket of goods for 2011 in the above table?

Accepted Answer

A)  97.3 
B)  102.8 
C)  128.0 
D)  zero because the price of CDs fell and the price of water increased 
A)  97.3 
B)  102.8 
C)  128.0 
D)  zero because the price of CDs fell and the price of water increased

Question 6

Suppose the number of people employed is 25 million and the number of people in the labor force is 75 million.What is the employment-to-population ratio?

Accepted Answer

A)  33 percent 
B)  25 percent 
C)  75 percent 
D)  There is not enough information given to answer the question. 
A)  33 percent 
B)  25 percent 
C)  75 percent 
D)  There is not enough information given to answer the question.

Question 7

In a country with a working-age population of 150 million,120 million workers are employed and 10 million workers are unemployed.What is the size of the labor force?

Accepted Answer

A)  150 million 
B)  130 million 
C)  120 million 
D)  10 million 
A)  150 million 
B)  130 million 
C)  120 million 
D)  10 million

Question 8

The currently used method for calculating the CPI

Accepted Answer

A)  accounts for people increasing consumption of a good that falls in relative price. 
B)  probably overstates inflation by about 1 percentage point. 
C)  has no effect on government expenditures. 
D)  None of the above answers are correct. 
A)  accounts for people increasing consumption of a good that falls in relative price. 
B)  probably overstates inflation by about 1 percentage point. 
C)  has no effect on government expenditures. 
D)  None of the above answers are correct.

Question 9

Which of the following statements is incorrect?

Accepted Answer

A)  The labor force is equal to the number of people employed plus the number of people unemployed. 
B)  The working age population includes everyone over the age of 16. 
C)  The unemployment rate is the number of persons who are unemployed divided by the labor force then times 100. 
D)  The labor-force participation rate is the labor force divided by the working-age population then times 100. 
A)  The labor force is equal to the number of people employed plus the number of people unemployed. 
B)  The working age population includes everyone over the age of 16. 
C)  The unemployment rate is the number of persons who are unemployed divided by the labor force then times 100. 
D)  The labor-force participation rate is the labor force divided by the working-age population then times 100.

Question 10

Because of the biases in calculating the CPI,actual inflation is

Accepted Answer

A)  accurately measured. 
B)  less than the measured inflation rate by about 1 percent per year. 
C)  more than the measured inflation rate by about 1 percent per year. 
D)  more than the measured inflation rate by about 1 percent per month. 
A)  accurately measured. 
B)  less than the measured inflation rate by about 1 percent per year. 
C)  more than the measured inflation rate by about 1 percent per year. 
D)  more than the measured inflation rate by about 1 percent per month.

Question 11

$$\begin{array} { | c | c | c | } 
\hline  { \text { Item } } & \begin{array} { c } 
\text { Quantity } \
( 2012 )
\end{array} & \begin{array} { c } 
\text { Price } \
( 2012 )
\end{array} \
\hline \text { Loaves of bread } & 20 & \$ 3.00 \
\hline \text { Tugs of soda } & 20 & \$ 2.00 \
\hline
\end{array}$$ 
 $$\begin{array} { | c | c | c | } 
\hline { \text { Item } } & \begin{array} { c } 
\text { Quantity } \
( 2013 )
\end{array} & \begin{array} { c } 
\text { Price } \
( 2013 )
\end{array} \
\hline \text { Loaves of bread } & 22 & \$ 4.00 \
\hline \text { Tugs of soda } & 30 & \$ 1.50 \
\hline
\end{array}$$
-The tables above give the purchases of an average consumer in a small economy.(These consumers purchase only loaves of bread and jugs of soda.) Suppose 2012 is the reference base period.
a) What quantities are in the CPI basket?
b) What is the cost of the CPI basket using 2012 prices?
c) What is the cost of the CPI basket using 2013 prices?
d) What is the CPI in 2013?

Accepted Answer

a)The quantities in the CPI basket are t

Question 12

During an economic expansion,real GDP ________ and unemployment ________.

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 13

The natural unemployment rate

Accepted Answer

A)  is a constant figure of about 4 percent. 
B)  fluctuates with the rate of inflation. 
C)  is the unemployment rate that occurs when the economy is at full employment. 
D)  is equal to cyclical unemployment. 
A)  is a constant figure of about 4 percent. 
B)  fluctuates with the rate of inflation. 
C)  is the unemployment rate that occurs when the economy is at full employment. 
D)  is equal to cyclical unemployment.

Question 14

Price indexes can overstate inflation because they

Accepted Answer

A)  omit some quality improvements. 
B)  do not contain the prices of any used goods. 
C)  do not contain the prices of foreign goods. 
D)  do not contain the prices of services. 
A)  omit some quality improvements. 
B)  do not contain the prices of any used goods. 
C)  do not contain the prices of foreign goods. 
D)  do not contain the prices of services.

Question 15

Assume that the total labor force is 100 individuals with 10 unemployed.The unemployment rate is ________.Now assume that 10 people drop out of the labor force and that 10 remain unemployed.The new unemployment rate is ________.

Accepted Answer

A)  9 percent; 10 percent 
B)  10 percent; 9 percent 
C)  10 percent; 11 percent 
D)  11 percent; 10 percent 
A)  9 percent; 10 percent 
B)  10 percent; 9 percent 
C)  10 percent; 11 percent 
D)  11 percent; 10 percent

Question 16

"The market basket used to calculate the CPI is revised monthly to more accurately depict consumers' choices.The price data for the CPI are collected every month." Are the previous sentences true or false?

Accepted Answer

The first sentence is false and the seco

Question 17

$$\begin{array} { | l | c | c | } 
\hline { \text { Item } } & \begin{array} { c } 
\text { Quantity } \
( 2012 )
\end{array} & \begin{array} { c } 
\text { Price } \
( 2012 )
\end{array} \
\hline \text { Meals } & 100 & \$ 10.00 \
\hline \text { Parking } & 50 & \$ 100.00 \
\hline
\end{array}$$ 
 $$\begin{array} { | l | c | c | } 
\hline  { \text { Item } } & \begin{array} { c } 
\text { Quantity } \
( 2013 )
\end{array} & \begin{array} { c } 
\text { Price } \
( 2013 )
\end{array} \
\hline \text { Meals } & 100 & \$ 12.00 \
\hline \text { Parking } & 50 & \$ 97.50 \
\hline
\end{array}$$
-The tables above give the purchases of a typical consumer in a country comprised of one large city.These consumers purchase only restaurant meals and parking.The year 2012 is the reference base period.
a) Find the total cost of the CPI basket for 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)The total cost of the CPI basket in 20

Question 18

In September 2012 the U.S.unemployment rate was 7.8 percent while the natural unemployment rate was 6 percent. The U.S.economy

Accepted Answer

A)  had a negative output gap. 
B)  had a positive output gap. 
C)  had an output gap of zero. 
D)  was at full employment. 
A)  had a negative output gap. 
B)  had a positive output gap. 
C)  had an output gap of zero. 
D)  was at full employment.

Question 19

Full employment means

Accepted Answer

A)  zero unemployment. 
B)  only cyclical unemployment exists. 
C)  only frictional and structural unemployment exists. 
D)  None of the above answers are correct. 
A)  zero unemployment. 
B)  only cyclical unemployment exists. 
C)  only frictional and structural unemployment exists. 
D)  None of the above answers are correct.

Question 20

What are the three types of unemployment and how do they change over the business cycle?

Accepted Answer

The three types of unemployment are fric

Frictional unemployment

If the population is 300 million,with 70 million under the age of 16 and institutionalized,another 70 million not in the labor force,10 million unemployed,and 150 million employed,the employment-to-population rate is

Because of a bank merger,Ms.Davis lost her position as Vice President and had to seek work with other banks.Ms.Davis has the skills necessary to find a new job,thus she is best considered as

When a woman reenters the labor force and looks for a job after spending time at home raising a child,

CPI basket quantity 2003 price 2011 price DVDs 10 discs \ 16 per disc \ 12 per disc Bottled 200 bottles \ 1.00 per bottle \ 1.25 per bottle water boter -If 2003 is the reference base period,what is the price index for the CPI basket of goods for 2011 in the above table?

Suppose the number of people employed is 25 million and the number of people in the labor force is 75 million.What is the employment-to-population ratio?

In a country with a working-age population of 150 million,120 million workers are employed and 10 million workers are unemployed.What is the size of the labor force?

The currently used method for calculating the CPI

Which of the following statements is incorrect?

Because of the biases in calculating the CPI,actual inflation is

During an economic expansion,real GDP and unemployment .

The natural unemployment rate

Price indexes can overstate inflation because they

Assume that the total labor force is 100 individuals with 10 unemployed.The unemployment rate is .Now assume that 10 people drop out of the labor force and that 10 remain unemployed.The new unemployment rate is .

"The market basket used to calculate the CPI is revised monthly to more accurately depict consumers' choices.The price data for the CPI are collected every month." Are the previous sentences true or false?

In September 2012 the U.S.unemployment rate was 7.8 percent while the natural unemployment rate was 6 percent. The U.S.economy

Full employment means

What are the three types of unemployment and how do they change over the business cycle?

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

Frictional unemployment

If the population is 300 million,with 70 million under the age of 16 and institutionalized,another 70 million not in the labor force,10 million unemployed,and 150 million employed,the employment-to-population rate is

Because of a bank merger,Ms.Davis lost her position as Vice President and had to seek work with other banks.Ms.Davis has the skills necessary to find a new job,thus she is best considered as

When a woman reenters the labor force and looks for a job after spending time at home raising a child,

CPI basket quantity 2003 price 2011 price DVDs 10 discs \ 16 per disc \ 12 per disc Bottled 200 bottles \ 1.00 per bottle \ 1.25 per bottle water boter -If 2003 is the reference base period,what is the price index for the CPI basket of goods for 2011 in the above table?

Suppose the number of people employed is 25 million and the number of people in the labor force is 75 million.What is the employment-to-population ratio?

In a country with a working-age population of 150 million,120 million workers are employed and 10 million workers are unemployed.What is the size of the labor force?

The currently used method for calculating the CPI

Which of the following statements is incorrect?

Because of the biases in calculating the CPI,actual inflation is

During an economic expansion,real GDP ________ and unemployment ________.

The natural unemployment rate

Price indexes can overstate inflation because they

Assume that the total labor force is 100 individuals with 10 unemployed.The unemployment rate is ________.Now assume that 10 people drop out of the labor force and that 10 remain unemployed.The new unemployment rate is ________.

"The market basket used to calculate the CPI is revised monthly to more accurately depict consumers' choices.The price data for the CPI are collected every month." Are the previous sentences true or false?

In September 2012 the U.S.unemployment rate was 7.8 percent while the natural unemployment rate was 6 percent. The U.S.economy

Full employment means

What are the three types of unemployment and how do they change over the business cycle?

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

During an economic expansion,real GDP and unemployment .

Assume that the total labor force is 100 individuals with 10 unemployed.The unemployment rate is .Now assume that 10 people drop out of the labor force and that 10 remain unemployed.The new unemployment rate is .