Question 1

In recent years,economists have come to rely more on the establishment survey rather than the household survey to analyze current labor market statistics.

Accepted Answer

A) True 
 B)False

Question 2

The "new product bias" in the consumer price index refers to the idea that

Accepted Answer

A)  consumers switch to new goods when the prices of old goods increase, and the CPI overestimates the cost to consumers. 
B)  consumers switch to old goods when the prices of new goods increase, and the CPI underestimates the cost to consumers. 
C)  consumers prefer new goods, even if they are worse in quality than old goods, and this causes the CPI to underestimate the cost to consumers. 
D)  new products' prices often decrease after their initial introduction, and the CPI is adjusted infrequently and overestimates the cost to consumers. 
A)  consumers switch to new goods when the prices of old goods increase, and the CPI overestimates the cost to consumers. 
B)  consumers switch to old goods when the prices of new goods increase, and the CPI underestimates the cost to consumers. 
C)  consumers prefer new goods, even if they are worse in quality than old goods, and this causes the CPI to underestimate the cost to consumers. 
D)  new products' prices often decrease after their initial introduction, and the CPI is adjusted infrequently and overestimates the cost to consumers.

Question 3

The household survey asks adults about their employment status and is used to compile the monthly unemployment rate.

Accepted Answer

A) True 
 B)False

Question 4

The nominal interest rate will be less than the real interest rate when

Accepted Answer

A)  the rate of inflation is positive but decreasing. 
B)  the rate of inflation is positive and increasing. 
C)  the rate of inflation is negative. 
D)  the real interest rate is negative. 
A)  the rate of inflation is positive but decreasing. 
B)  the rate of inflation is positive and increasing. 
C)  the rate of inflation is negative. 
D)  the real interest rate is negative.

Question 5

The GDP deflator is the best measure that reflects the prices of goods and services purchased by the typical household.

Accepted Answer

A) True 
 B)False

Question 6

Table 13-9
 $\begin{array}{|c|c|}
\hline \text { Year } & \text { CPI } \
\hline 2017 & 100 \
\hline 2018 & 113 \
\hline
\end{array}$
-Refer to Table 13-9.Suppose that the data in the table above reflect the price levels in the economy.Given that data,we can say that the cost of living rose by ________ between 2017 and 2018?

Accepted Answer

A)  2% 
B)  5% 
C)  8% 
D)  11% 
E)  13% 
A)  2% 
B)  5% 
C)  8% 
D)  11% 
E)  13%

Question 7

How would the unemployment rate and the labor force participation rate change if discouraged workers were counted as unemployed rather than counted as not in the labor force? Show using the formula for both measurements.

Accepted Answer

The unemployment rate is calculated as:

Question 8

Which of the following describes a situation in which the person is hurt by inflation?

Accepted Answer

A)  a retiree whose pension is adjusted for inflation 
B)  a person who borrows money during a period when inflation is under-predicted 
C)  a person who lends money during a period when inflation is over-predicted 
D)  a person paid a fixed income during an inflationary period 
A)  a retiree whose pension is adjusted for inflation 
B)  a person who borrows money during a period when inflation is under-predicted 
C)  a person who lends money during a period when inflation is over-predicted 
D)  a person paid a fixed income during an inflationary period

Question 9

Explain why you would rather be a borrower during a period of unexpected rising inflation,and a lender during a period of unexpected declining inflation.

Accepted Answer

The nominal interest rate includes a cha

Question 10

Figure 13-1
  
-Refer to Figure 13-1.Based on the graph of the labor market above,if a minimum wage is set at $5 per hour,which of the following will occur?

Accepted Answer

A)  The unemployment rate will rise. 
B)  The unemployment rate will fall. 
C)  The level of unemployment will rise, but the percentage of the labor force unemployed will not change. 
D)  None of the above will occur. 
A)  The unemployment rate will rise. 
B)  The unemployment rate will fall. 
C)  The level of unemployment will rise, but the percentage of the labor force unemployed will not change. 
D)  None of the above will occur.

Question 11

Full employment is not considered to be zero unemployment,because

Accepted Answer

A)  some cyclical unemployment always exists. 
B)  some people do not want a job. 
C)  there are not enough jobs for everyone who wants one. 
D)  people do not find jobs instantaneously. 
A)  some cyclical unemployment always exists. 
B)  some people do not want a job. 
C)  there are not enough jobs for everyone who wants one. 
D)  people do not find jobs instantaneously.

Question 12

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2018,then the value of your grandfather's salary in 2018 dollars is approximately

Accepted Answer

A)  $84,775. 
B)  $63,830. 
C)  $37,200. 
D)  $26,280. 
A)  $84,775. 
B)  $63,830. 
C)  $37,200. 
D)  $26,280.

Question 13

The natural rate of unemployment is made up of

Accepted Answer

A)  frictional, cyclical, and structural unemployment. 
B)  frictional and cyclical unemployment. 
C)  cyclical and structural unemployment. 
D)  frictional and structural unemployment. 
E)  seasonal and structural unemployment. 
A)  frictional, cyclical, and structural unemployment. 
B)  frictional and cyclical unemployment. 
C)  cyclical and structural unemployment. 
D)  frictional and structural unemployment. 
E)  seasonal and structural unemployment.

Question 14

The unemployment rate in the United States is typically lower than in Western Europe because the United States has tougher requirements for the unemployed to receive government payments.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?

Accepted Answer

A)  A firm signs a 3-year contract with a union based on a 2 percent anticipated rate of inflation per year, and the actual rate of inflation ends up being 7 percent per year. 
B)  A worker receives a raise in salary that is less than the rate of inflation, because management under-predicted inflation. 
C)  Firms have to hire an extra worker to change prices in its store because of inflation. 
D)  A bank collects a lower amount of interest from a loan because inflation was under-predicted. 
A)  A firm signs a 3-year contract with a union based on a 2 percent anticipated rate of inflation per year, and the actual rate of inflation ends up being 7 percent per year. 
B)  A worker receives a raise in salary that is less than the rate of inflation, because management under-predicted inflation. 
C)  Firms have to hire an extra worker to change prices in its store because of inflation. 
D)  A bank collects a lower amount of interest from a loan because inflation was under-predicted.

Question 16

Suppose that homemakers are included as employed in the labor force statistics,rather than being counted as out of the labor force.This would

Accepted Answer

A)  increase the measured unemployment rate. 
B)  increase the measured labor force participation rate. 
C)  decrease the number of persons in the labor force. 
D)  decrease the number of persons in the working-age population. 
A)  increase the measured unemployment rate. 
B)  increase the measured labor force participation rate. 
C)  decrease the number of persons in the labor force. 
D)  decrease the number of persons in the working-age population.

Question 17

Cyclical unemployment is the result of

Accepted Answer

A)  a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs. 
B)  the search process of matching workers with jobs. 
C)  the ups and downs in inflation. 
D)  a slowdown in the economy. 
A)  a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs. 
B)  the search process of matching workers with jobs. 
C)  the ups and downs in inflation. 
D)  a slowdown in the economy.

Question 18

What impact would including members of the military in employment,labor force,and working-age population statistics have on the unemployment rate and the labor force participation rate?

Accepted Answer

A)  Including members of the military would increase the unemployment rate and reduce the labor force participation rate. 
B)  Including members of the military would reduce the unemployment rate and increase the labor force participation rate. 
C)  Including the military would increase both the unemployment rate and the labor force participation rate. 
D)  Including the military would reduce both the unemployment rate and the labor force participation rate. 
A)  Including members of the military would increase the unemployment rate and reduce the labor force participation rate. 
B)  Including members of the military would reduce the unemployment rate and increase the labor force participation rate. 
C)  Including the military would increase both the unemployment rate and the labor force participation rate. 
D)  Including the military would reduce both the unemployment rate and the labor force participation rate.

Question 19

Deflation occurs when

Accepted Answer

A)  there is a sustained increase in the price level. 
B)  there is a one-time increase in the price level. 
C)  there is a decline in the price level. 
D)  there is a decrease in the expected rate of inflation. 
A)  there is a sustained increase in the price level. 
B)  there is a one-time increase in the price level. 
C)  there is a decline in the price level. 
D)  there is a decrease in the expected rate of inflation.

Question 20

A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat.This lumberjack would be

Accepted Answer

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

In recent years,economists have come to rely more on the establishment survey rather than the household survey to analyze current labor market statistics.

The "new product bias" in the consumer price index refers to the idea that

The household survey asks adults about their employment status and is used to compile the monthly unemployment rate.

The nominal interest rate will be less than the real interest rate when

The GDP deflator is the best measure that reflects the prices of goods and services purchased by the typical household.

Table 13-9 Year CPI 2017 100 2018 113 -Refer to Table 13-9.Suppose that the data in the table above reflect the price levels in the economy.Given that data,we can say that the cost of living rose by ________ between 2017 and 2018?

How would the unemployment rate and the labor force participation rate change if discouraged workers were counted as unemployed rather than counted as not in the labor force? Show using the formula for both measurements.

Which of the following describes a situation in which the person is hurt by inflation?

Explain why you would rather be a borrower during a period of unexpected rising inflation,and a lender during a period of unexpected declining inflation.

Figure 13-1 -Refer to Figure 13-1.Based on the graph of the labor market above,if a minimum wage is set at $5 per hour,which of the following will occur?

Full employment is not considered to be zero unemployment,because

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2018,then the value of your grandfather's salary in 2018 dollars is approximately

The natural rate of unemployment is made up of

The unemployment rate in the United States is typically lower than in Western Europe because the United States has tougher requirements for the unemployed to receive government payments.

Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?

Suppose that homemakers are included as employed in the labor force statistics,rather than being counted as out of the labor force.This would

Cyclical unemployment is the result of

What impact would including members of the military in employment,labor force,and working-age population statistics have on the unemployment rate and the labor force participation rate?

Deflation occurs when

A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat.This lumberjack would be

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

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Exam 13: Unemployment and Inflation

In recent years,economists have come to rely more on the establishment survey rather than the household survey to analyze current labor market statistics.

The "new product bias" in the consumer price index refers to the idea that

The household survey asks adults about their employment status and is used to compile the monthly unemployment rate.

The nominal interest rate will be less than the real interest rate when

The GDP deflator is the best measure that reflects the prices of goods and services purchased by the typical household.

Table 13-9 Year CPI 2017 100 2018 113 -Refer to Table 13-9.Suppose that the data in the table above reflect the price levels in the economy.Given that data,we can say that the cost of living rose by ________ between 2017 and 2018?

How would the unemployment rate and the labor force participation rate change if discouraged workers were counted as unemployed rather than counted as not in the labor force? Show using the formula for both measurements.

Which of the following describes a situation in which the person is hurt by inflation?

Explain why you would rather be a borrower during a period of unexpected rising inflation,and a lender during a period of unexpected declining inflation.

Figure 13-1 -Refer to Figure 13-1.Based on the graph of the labor market above,if a minimum wage is set at $5 per hour,which of the following will occur?

Full employment is not considered to be zero unemployment,because

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2018,then the value of your grandfather's salary in 2018 dollars is approximately

The natural rate of unemployment is made up of

The unemployment rate in the United States is typically lower than in Western Europe because the United States has tougher requirements for the unemployed to receive government payments.

Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?

Suppose that homemakers are included as employed in the labor force statistics,rather than being counted as out of the labor force.This would

Cyclical unemployment is the result of

What impact would including members of the military in employment,labor force,and working-age population statistics have on the unemployment rate and the labor force participation rate?

Deflation occurs when

A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat.This lumberjack would be

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters