Question 1

An increase in unemployment insurance payments would,in effect,________ the amount of time spent searching for a job,which would increase ________ unemployment.

Accepted Answer

A)  increase; cyclical 
B)  increase; frictional 
C)  decrease; cyclical 
D)  decrease; frictional 
A)  increase; cyclical 
B)  increase; frictional 
C)  decrease; cyclical 
D)  decrease; frictional

Question 2

The Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill.

Accepted Answer

A)  employed 
B)  unemployed 
C)  a discouraged worker 
D)  out of the labor force 
A)  employed 
B)  unemployed 
C)  a discouraged worker 
D)  out of the labor force

Question 3

In 1986,an Apple IIe computer with 65 kilobytes of memory cost around $1,500.Today,a $1,500 iMac computer (also made by Apple)comes with 8 gigabytes of memory.This illustrates the potential for what kind of bias in CPI calculations?

Accepted Answer

A)  new product bias 
B)  increase in quality bias 
C)  substitution bias 
D)  outlet bias 
A)  new product bias 
B)  increase in quality bias 
C)  substitution bias 
D)  outlet bias

Question 4

We say that the economy is at full employment if the unemployment rate is equal to

Accepted Answer

A)  zero. 
B)  the natural rate of unemployment. 
C)  the amount of cyclical unemployment. 
D)  the sum of frictional and cyclical unemployment. 
E)  the sum of structural and cyclical unemployment. 
A)  zero. 
B)  the natural rate of unemployment. 
C)  the amount of cyclical unemployment. 
D)  the sum of frictional and cyclical unemployment. 
E)  the sum of structural and cyclical unemployment.

Question 5

The inflation rate measures the percentage increase in the price level from one year to the next.

Accepted Answer

A) True 
 B)False

Question 6

If the number of unemployed workers is 200 million,the number of employed workers is 300 million,and the working-age population is 800 million,what is the labor force participation rate?

Accepted Answer

A)  12.5% 
B)  37.5% 
C)  40% 
D)  62.5% 
A)  12.5% 
B)  37.5% 
C)  40% 
D)  62.5%

Question 7

If your nominal wage rises faster than the price level,we can say your real wage has ________ and the purchasing power of your income has ________.

Accepted Answer

A)  fallen; fallen 
B)  fallen; risen 
C)  risen; risen 
D)  risen; fallen 
A)  fallen; fallen 
B)  fallen; risen 
C)  risen; risen 
D)  risen; fallen

Question 8

The natural rate of unemployment consists of frictional unemployment plus cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 9

The unemployment rate tends to be higher in the European Union as compared to the United States.

Accepted Answer

A) True 
 B)False

Question 10

Table 13-20
 $\begin{array}{|c|c|c|}
\hline \text { Year } & \begin{array}{c}
\text { Median Salary: } \
\text { New York Yankees }
\end{array} & \begin{array}{c}
\text { CPI (1982-1984= } \
\mathbf{1 0 0})
\end{array} \
\hline 1989 & \$ 500,000 & 124 \
\hline 2015 & 3,300,000 & 238 \
\hline
\end{array}$ Salaries in major league baseball have soared over the last 30 to 40 years. Some of the salary increase is due to inflation. The table above reports the consumer price index and the median nominal salary of the New York Yankees for 1989 and 2015.
Source: USA Today Salaries Database, http://www.usatoday.com/sports/mlb/yankees/salaries/2015/team/all/
-Refer to Table 13-20.Calculate the real median salary of the New York Yankees in both 1982-1984 dollars and 2015 dollars.Calculate the percentage increase in the median salary of the Yankees from 1989 to 2015 in both nominal terms and in real terms.

Accepted Answer

Real median salary = @#LAT-DLM& × 100.
Real median

Question 11

The percent increase in the CPI from one year to the next is a measure of the

Accepted Answer

A)  GDP deflator. 
B)  unemployment rate. 
C)  real interest rate. 
D)  inflation rate. 
A)  GDP deflator. 
B)  unemployment rate. 
C)  real interest rate. 
D)  inflation rate.

Question 12

If the BLS counted persons that are on active military service in the totals for employment,the labor force,and the working-age population,this would

Accepted Answer

A)  decrease the measured unemployment rate. 
B)  decrease 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)  decrease the measured unemployment rate. 
B)  decrease 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 13

The formula for calculating the CPI is

Accepted Answer

A)  (Expenditures in the current year/Expenditures in the base year) × 100. 
B)  (Expenditures in the current year × Expenditures in the base year)/100. 
C)  (Expenditures in the base year/Expenditures in the current year). 
D)  (Expenditures in the base year × 100)/(Expenditures in the current year). 
A)  (Expenditures in the current year/Expenditures in the base year) × 100. 
B)  (Expenditures in the current year × Expenditures in the base year)/100. 
C)  (Expenditures in the base year/Expenditures in the current year). 
D)  (Expenditures in the base year × 100)/(Expenditures in the current year).

Question 14

Sarah is a full-time student who is not looking for work.What kind of unemployment is Sarah experiencing?

Accepted Answer

A)  cyclical 
B)  structural 
C)  frictional 
D)  Sarah is not experiencing unemployment of any kind, because she is not currently part of the labor force. 
A)  cyclical 
B)  structural 
C)  frictional 
D)  Sarah is not experiencing unemployment of any kind, because she is not currently part of the labor force.

Question 15

If we want to use a measure of inflation that foreshadows price changes before they affect prices at the retail level,we would base our measure of inflation on

Accepted Answer

A)  the producer price index. 
B)  the consumer price index. 
C)  the GDP deflator. 
D)  the household price index. 
A)  the producer price index. 
B)  the consumer price index. 
C)  the GDP deflator. 
D)  the household price index.

Question 16

Which of the following would reduce the labor force participation rate,all else equal?

Accepted Answer

A)  an increase in the number of people in the labor force 
B)  an increase in the unemployment rate 
C)  a decrease in the unemployment rate 
D)  an increase in the working-age population 
A)  an increase in the number of people in the labor force 
B)  an increase in the unemployment rate 
C)  a decrease in the unemployment rate 
D)  an increase in the working-age population

Question 17

The economy has gone into a recession.You have majored in computer science and,because of the recession,have difficulty in finding a job.According to the information in the chapter,should you go back to school and get a second major?

Accepted Answer

A)  Yes, the recession will ensure that you will never find a job as a programmer. 
B)  Yes, the recession will lower income in my field permanently. 
C)  No, the recession will most likely be short-lived and I can get a job after it is over. 
D)  No, the recession will have no impact on my ability to get a job or my future income. 
A)  Yes, the recession will ensure that you will never find a job as a programmer. 
B)  Yes, the recession will lower income in my field permanently. 
C)  No, the recession will most likely be short-lived and I can get a job after it is over. 
D)  No, the recession will have no impact on my ability to get a job or my future income.

Question 18

Suppose that the labor movement has a revival in the United States and the majority of workers join labor unions.As a result we would expect

Accepted Answer

A)  the labor force participation rate to fall. 
B)  the unemployment rate to fall. 
C)  the unemployment rate to rise. 
D)  no change in the unemployment rate or labor force participation rate. 
A)  the labor force participation rate to fall. 
B)  the unemployment rate to fall. 
C)  the unemployment rate to rise. 
D)  no change in the unemployment rate or labor force participation rate.

Question 19

The Bureau of Labor Statistics would categorize a retiree who is not working as

Accepted Answer

A)  employed. 
B)  unemployed. 
C)  a discouraged worker. 
D)  out of the labor force. 
A)  employed. 
B)  unemployed. 
C)  a discouraged worker. 
D)  out of the labor force.

Question 20

The PPI is the

Accepted Answer

A)  price parity index. 
B)  prime producer index. 
C)  producer price index. 
D)  production performance indicator. 
A)  price parity index. 
B)  prime producer index. 
C)  producer price index. 
D)  production performance indicator.

An increase in unemployment insurance payments would,in effect, the amount of time spent searching for a job,which would increase unemployment.

The Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill.

In 1986,an Apple IIe computer with 65 kilobytes of memory cost around $1,500.Today,a $1,500 iMac computer (also made by Apple)comes with 8 gigabytes of memory.This illustrates the potential for what kind of bias in CPI calculations?

We say that the economy is at full employment if the unemployment rate is equal to

The inflation rate measures the percentage increase in the price level from one year to the next.

If the number of unemployed workers is 200 million,the number of employed workers is 300 million,and the working-age population is 800 million,what is the labor force participation rate?

If your nominal wage rises faster than the price level,we can say your real wage has and the purchasing power of your income has .

The natural rate of unemployment consists of frictional unemployment plus cyclical unemployment.

The unemployment rate tends to be higher in the European Union as compared to the United States.

The percent increase in the CPI from one year to the next is a measure of the

If the BLS counted persons that are on active military service in the totals for employment,the labor force,and the working-age population,this would

The formula for calculating the CPI is

Sarah is a full-time student who is not looking for work.What kind of unemployment is Sarah experiencing?

If we want to use a measure of inflation that foreshadows price changes before they affect prices at the retail level,we would base our measure of inflation on

Which of the following would reduce the labor force participation rate,all else equal?

The economy has gone into a recession.You have majored in computer science and,because of the recession,have difficulty in finding a job.According to the information in the chapter,should you go back to school and get a second major?

Suppose that the labor movement has a revival in the United States and the majority of workers join labor unions.As a result we would expect

The Bureau of Labor Statistics would categorize a retiree who is not working as

The PPI is the

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

Exam 13: Unemployment and Inflation

An increase in unemployment insurance payments would,in effect,________ the amount of time spent searching for a job,which would increase ________ unemployment.

The Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill.

In 1986,an Apple IIe computer with 65 kilobytes of memory cost around $1,500.Today,a $1,500 iMac computer (also made by Apple)comes with 8 gigabytes of memory.This illustrates the potential for what kind of bias in CPI calculations?

We say that the economy is at full employment if the unemployment rate is equal to

The inflation rate measures the percentage increase in the price level from one year to the next.

If the number of unemployed workers is 200 million,the number of employed workers is 300 million,and the working-age population is 800 million,what is the labor force participation rate?

If your nominal wage rises faster than the price level,we can say your real wage has ________ and the purchasing power of your income has ________.

The natural rate of unemployment consists of frictional unemployment plus cyclical unemployment.

The unemployment rate tends to be higher in the European Union as compared to the United States.

The percent increase in the CPI from one year to the next is a measure of the

If the BLS counted persons that are on active military service in the totals for employment,the labor force,and the working-age population,this would

The formula for calculating the CPI is

Sarah is a full-time student who is not looking for work.What kind of unemployment is Sarah experiencing?

If we want to use a measure of inflation that foreshadows price changes before they affect prices at the retail level,we would base our measure of inflation on

Which of the following would reduce the labor force participation rate,all else equal?

The economy has gone into a recession.You have majored in computer science and,because of the recession,have difficulty in finding a job.According to the information in the chapter,should you go back to school and get a second major?

Suppose that the labor movement has a revival in the United States and the majority of workers join labor unions.As a result we would expect

The Bureau of Labor Statistics would categorize a retiree who is not working as

The PPI is the

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

An increase in unemployment insurance payments would,in effect, the amount of time spent searching for a job,which would increase unemployment.

If your nominal wage rises faster than the price level,we can say your real wage has and the purchasing power of your income has .