Question 1

The real interest rate equals the nominal interest rate ________ the inflation rate.

Accepted Answer

A)  times 
B)  divided by 
C)  plus 
D)  minus 
A)  times 
B)  divided by 
C)  plus 
D)  minus

Question 2

If the federal government implements programs so that the unemployed are more quickly matched with jobs,then

Accepted Answer

A)  the natural rate of unemployment will increase. 
B)  the natural rate of unemployment will decrease. 
C)  the natural rate of unemployment will not change. 
D)  the natural rate of unemployment could either increase or decrease. 
A)  the natural rate of unemployment will increase. 
B)  the natural rate of unemployment will decrease. 
C)  the natural rate of unemployment will not change. 
D)  the natural rate of unemployment could either increase or decrease.

Question 3

The equilibrium wage in a local labor market is $10 per hour.If a minimum wage of $15 per hour is imposed,which of the following will occur?

Accepted Answer

A)  There will be an increase in unemployment. 
B)  There will be an increase in the quantity of labor demanded by firms. 
C)  There will be a decrease in the quantity of labor supplied by households. 
D)  All of the above will occur. 
A)  There will be an increase in unemployment. 
B)  There will be an increase in the quantity of labor demanded by firms. 
C)  There will be a decrease in the quantity of labor supplied by households. 
D)  All of the above will occur.

Question 4

Explain how the CPI is constructed.

Accepted Answer

The Bureau of Labor statistics surveys 1

Question 5

Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to overstate the true extent of joblessness?

Accepted Answer

A)  inflation 
B)  discouraged workers 
C)  counting people as employed who are working part time, although they would prefer to be working full time 
D)  unemployed persons falsely report themselves to be actively looking for a job 
A)  inflation 
B)  discouraged workers 
C)  counting people as employed who are working part time, although they would prefer to be working full time 
D)  unemployed persons falsely report themselves to be actively looking for a job

Question 6

The increase in quality bias in the consumer price index refers to the idea that price increases in the CPI reflect pure inflation,but ________ quality increases.This causes the CPI to ________ the cost of the market basket.

Accepted Answer

A)  also; understate 
B)  also; overstate 
C)  not; understate 
D)  not; overstate 
A)  also; understate 
B)  also; overstate 
C)  not; understate 
D)  not; overstate

Question 7

Monthly expenditures for a family of 4 in 2017 averaged $1,400.In 2018,the cost of the same purchases was $1,500.If 2017 is the base year,what was the CPI in 2018?

Accepted Answer

A)  110 
B)  107 
C)  100 
D)  93 
A)  110 
B)  107 
C)  100 
D)  93

Question 8

What are menu costs?

Accepted Answer

A)  the full list of a firm's costs of production 
B)  the costs to a firm of changing prices 
C)  the cost to a household of borrowing money when there is deflation 
D)  the opportunity cost of dining in a restaurant instead of at home 
A)  the full list of a firm's costs of production 
B)  the costs to a firm of changing prices 
C)  the cost to a household of borrowing money when there is deflation 
D)  the opportunity cost of dining in a restaurant instead of at home

Question 9

Jack just told his boss that he thinks his boss is an idiot.It is likely that Jack will be experiencing ________ unemployment in the near future.

Accepted Answer

A)  permanent 
B)  cyclical 
C)  frictional 
D)  structural 
A)  permanent 
B)  cyclical 
C)  frictional 
D)  structural

Question 10

If you have trouble finding a job because of a slowdown in the overall economy,we would say that you are

Accepted Answer

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

Question 11

The cost to firms of changing prices

Accepted Answer

A)  is small even when there is rapid inflation. 
B)  is called a menu cost. 
C)  does not exist if inflation is perfectly anticipated. 
D)  all of the above 
A)  is small even when there is rapid inflation. 
B)  is called a menu cost. 
C)  does not exist if inflation is perfectly anticipated. 
D)  all of the above

Question 12

When an economy is at its natural rate of unemployment,which of the following will be true?

Accepted Answer

A)  The unemployment rate will be 0%. 
B)  The labor force participation rate will be 100%. 
C)  The unemployment rate will be greater than 0%. 
D)  Only structural unemployment as a result of technological change will exist in the economy. 
A)  The unemployment rate will be 0%. 
B)  The labor force participation rate will be 100%. 
C)  The unemployment rate will be greater than 0%. 
D)  Only structural unemployment as a result of technological change will exist in the economy.

Question 13

Table 13-5
 $\begin{array}{|c|c|}
\hline \text { Year } & \text { CPI } \
\hline 2017 & 207 \
\hline 2018 & 215 \
\hline
\end{array}$
-Refer to Table 13-5.Consider the following values of the consumer price index for 2017 and 2018.The inflation rate for 2018 was equal to

Accepted Answer

A)  215 percent. 
B)  21.5 percent. 
C)  8.0 percent. 
D)  3.9 percent. 
A)  215 percent. 
B)  21.5 percent. 
C)  8.0 percent. 
D)  3.9 percent.

Question 14

Table 13-16
 $\begin{array}{|c|c|c|}
\hline \text { Year } & \begin{array}{c}
\text { Nominal Average } \
\text { Hourly Earnings }
\end{array} & \text { CPI } \
\hline 2016 & \$ 10 & 100 \
\hline 2017 & 10 & 105 \
\hline 2018 & 12 & 110 \
\hline
\end{array}$
-Refer to Table 13-16.Looking at the table above,real wages ________ from 2016 to 2017,and real wages ________ from 2017 to 2018.

Accepted Answer

A)  rose; rose 
B)  rose; fell 
C)  fell; rose 
D)  fell; fell 
A)  rose; rose 
B)  rose; fell 
C)  fell; rose 
D)  fell; fell

Question 15

The unemployment rate is an important economic statistic that can tell us about the health of the economy.If the unemployment rate turns out to be high or higher than anticipated,we would expect

Accepted Answer

A)  it is more likely that an incumbent president will be re-elected. 
B)  that stock prices are more likely to fall. 
C)  that jobs are less difficult to find. 
D)  that investors will be more optimistic about the economy. 
A)  it is more likely that an incumbent president will be re-elected. 
B)  that stock prices are more likely to fall. 
C)  that jobs are less difficult to find. 
D)  that investors will be more optimistic about the economy.

Question 16

Which of the following policies would reduce frictional unemployment?

Accepted Answer

A)  a decrease in the minimum wage 
B)  a job retraining program 
C)  implementing an unemployment insurance policy 
D)  building an online job database that helps workers find jobs 
A)  a decrease in the minimum wage 
B)  a job retraining program 
C)  implementing an unemployment insurance policy 
D)  building an online job database that helps workers find jobs

Question 17

An advantage of the household survey over the establishment survey of the labor market is that the household survey

Accepted Answer

A)  is based on actual payrolls, rather than on unverified answers. 
B)  includes the number of self-employed persons. 
C)  includes the number of discouraged workers. 
D)  omits persons employed at newly opened firms. 
A)  is based on actual payrolls, rather than on unverified answers. 
B)  includes the number of self-employed persons. 
C)  includes the number of discouraged workers. 
D)  omits persons employed at newly opened firms.

Question 18

Between 2017 and 2018,the CPI of a small nation rose from 182 to 185.If household incomes rose by 3% during that period of time,which of the following is true?

Accepted Answer

A)  The purchasing power of household income rose between 2017 and 2018. 
B)  The purchasing power of household income fell between 2017 and 2018. 
C)  The purchasing power of household income remained constant between 2017 and 2018. 
D)  The CPI cannot be used to determine how the purchasing power of household income changes over time. 
A)  The purchasing power of household income rose between 2017 and 2018. 
B)  The purchasing power of household income fell between 2017 and 2018. 
C)  The purchasing power of household income remained constant between 2017 and 2018. 
D)  The CPI cannot be used to determine how the purchasing power of household income changes over time.

Question 19

Table 13-18
 $\begin{array}{|c|c|c|}
\hline \text { Year } & \begin{array}{c}
\text { Nominal Average Hourly } \
\text { Earnings }
\end{array} & \text { CPI } \
\hline 2016 & \$ 10 & 100 \
\hline 2017 & 10 & 105 \
\hline 2018 & 12 & 117 \
\hline
\end{array}$
-Refer to Table 13-18.Looking at the table above,what is the rate of growth of real average hourly earnings from 2017 to 2018?

Accepted Answer

A)  7.8% 
B)  6.25% 
C)  4% 
D)  -4% 
A)  7.8% 
B)  6.25% 
C)  4% 
D)  -4%

Question 20

What does the PPI measure?

Accepted Answer

A)  the average change in the prices paid for all goods produced in the economy over a given year 
B)  the average of the prices received by producers of goods and services at all stages of the production process 
C)  the level of production of goods and services generated in the economy in a given year 
D)  the difference between the prices consumers pay for goods and services and the prices producers pay for goods and services 
A)  the average change in the prices paid for all goods produced in the economy over a given year 
B)  the average of the prices received by producers of goods and services at all stages of the production process 
C)  the level of production of goods and services generated in the economy in a given year 
D)  the difference between the prices consumers pay for goods and services and the prices producers pay for goods and services

The real interest rate equals the nominal interest rate ________ the inflation rate.

If the federal government implements programs so that the unemployed are more quickly matched with jobs,then

The equilibrium wage in a local labor market is $10 per hour.If a minimum wage of $15 per hour is imposed,which of the following will occur?

Explain how the CPI is constructed.

Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to overstate the true extent of joblessness?

The increase in quality bias in the consumer price index refers to the idea that price increases in the CPI reflect pure inflation,but quality increases.This causes the CPI to the cost of the market basket.

Monthly expenditures for a family of 4 in 2017 averaged $1,400.In 2018,the cost of the same purchases was $1,500.If 2017 is the base year,what was the CPI in 2018?

What are menu costs?

Jack just told his boss that he thinks his boss is an idiot.It is likely that Jack will be experiencing ________ unemployment in the near future.

If you have trouble finding a job because of a slowdown in the overall economy,we would say that you are

The cost to firms of changing prices

When an economy is at its natural rate of unemployment,which of the following will be true?

Table 13-5 Year CPI 2017 207 2018 215 -Refer to Table 13-5.Consider the following values of the consumer price index for 2017 and 2018.The inflation rate for 2018 was equal to

Table 13-16 Year Nominal Average Hourly Earnings CPI 2016 \ 10 100 2017 10 105 2018 12 110 -Refer to Table 13-16.Looking at the table above,real wages from 2016 to 2017,and real wages from 2017 to 2018.

The unemployment rate is an important economic statistic that can tell us about the health of the economy.If the unemployment rate turns out to be high or higher than anticipated,we would expect

Which of the following policies would reduce frictional unemployment?

An advantage of the household survey over the establishment survey of the labor market is that the household survey

Between 2017 and 2018,the CPI of a small nation rose from 182 to 185.If household incomes rose by 3% during that period of time,which of the following is true?

Table 13-18 Year Nominal Average Hourly Earnings CPI 2016 \ 10 100 2017 10 105 2018 12 117 -Refer to Table 13-18.Looking at the table above,what is the rate of growth of real average hourly earnings from 2017 to 2018?

What does the PPI measure?

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

The real interest rate equals the nominal interest rate ________ the inflation rate.

If the federal government implements programs so that the unemployed are more quickly matched with jobs,then

The equilibrium wage in a local labor market is $10 per hour.If a minimum wage of $15 per hour is imposed,which of the following will occur?

Explain how the CPI is constructed.

Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to overstate the true extent of joblessness?

The increase in quality bias in the consumer price index refers to the idea that price increases in the CPI reflect pure inflation,but ________ quality increases.This causes the CPI to ________ the cost of the market basket.

Monthly expenditures for a family of 4 in 2017 averaged $1,400.In 2018,the cost of the same purchases was $1,500.If 2017 is the base year,what was the CPI in 2018?

What are menu costs?

Jack just told his boss that he thinks his boss is an idiot.It is likely that Jack will be experiencing ________ unemployment in the near future.

If you have trouble finding a job because of a slowdown in the overall economy,we would say that you are

The cost to firms of changing prices

When an economy is at its natural rate of unemployment,which of the following will be true?

Table 13-5 Year CPI 2017 207 2018 215 -Refer to Table 13-5.Consider the following values of the consumer price index for 2017 and 2018.The inflation rate for 2018 was equal to

Table 13-16 Year Nominal Average Hourly Earnings CPI 2016 \ 10 100 2017 10 105 2018 12 110 -Refer to Table 13-16.Looking at the table above,real wages ________ from 2016 to 2017,and real wages ________ from 2017 to 2018.

The unemployment rate is an important economic statistic that can tell us about the health of the economy.If the unemployment rate turns out to be high or higher than anticipated,we would expect

Which of the following policies would reduce frictional unemployment?

An advantage of the household survey over the establishment survey of the labor market is that the household survey

Between 2017 and 2018,the CPI of a small nation rose from 182 to 185.If household incomes rose by 3% during that period of time,which of the following is true?

Table 13-18 Year Nominal Average Hourly Earnings CPI 2016 \ 10 100 2017 10 105 2018 12 117 -Refer to Table 13-18.Looking at the table above,what is the rate of growth of real average hourly earnings from 2017 to 2018?

What does the PPI measure?

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

The increase in quality bias in the consumer price index refers to the idea that price increases in the CPI reflect pure inflation,but quality increases.This causes the CPI to the cost of the market basket.

Table 13-16 Year Nominal Average Hourly Earnings CPI 2016 \ 10 100 2017 10 105 2018 12 110 -Refer to Table 13-16.Looking at the table above,real wages from 2016 to 2017,and real wages from 2017 to 2018.