Question 1

The most widely used measure of inflation is based on which of the following price indices?

Accepted Answer

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

Question 2

The U.S.unemployment insurance program

Accepted Answer

A) increases the amount of time the unemployed spend searching for a job. 
B) decreases the level of frictional unemployment. 
C) pays the unemployed a benefit equal to twice the average wage. 
D) eliminates structural unemployment. 
A) increases the amount of time the unemployed spend searching for a job. 
B) decreases the level of frictional unemployment. 
C) pays the unemployed a benefit equal to twice the average wage. 
D) eliminates structural unemployment.

Question 3

With the exception of during recessions,workers in Canada are eligible for unemployment benefits for about twice as long a period of time as workers in the United States.As a result

Accepted Answer

A) the average duration of unemployment is longer in the United States than in Canada. 
B) the unemployment rate in Canada is usually higher than in the United States. 
C) the opportunity cost of job search in Canada is lower than in the United States. 
D) frictional unemployment is higher,on average,in the United States than in Canada. 
A) the average duration of unemployment is longer in the United States than in Canada. 
B) the unemployment rate in Canada is usually higher than in the United States. 
C) the opportunity cost of job search in Canada is lower than in the United States. 
D) frictional unemployment is higher,on average,in the United States than in Canada.

Question 4

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 5

If your nominal wage rises more slowly than the price level,we can say your real wage has ________ and the purchasing power of a dollar 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 6

The average price of goods and services in the economy is also known as

Accepted Answer

A) the price level. 
B) the inflation rate. 
C) a market basket. 
D) the cost of living. 
A) the price level. 
B) the inflation rate. 
C) a market basket. 
D) the cost of living.

Question 7

By offering training to workers whose firms laid them off because of competition from foreign firms,the federal government is attempting to reduce

Accepted Answer

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

Question 8

The costs to firms of changing prices are called

Accepted Answer

A) redistribution costs. 
B) menu costs. 
C) anticipation costs. 
D) money illusion costs. 
A) redistribution costs. 
B) menu costs. 
C) anticipation costs. 
D) money illusion costs.

Question 9

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 10

If inflation is completely anticipated

Accepted Answer

A) no one loses in the economy. 
B) borrowers lose in the economy. 
C) lenders lose in the economy. 
D) firms lose because they incur menu costs. 
A) no one loses in the economy. 
B) borrowers lose in the economy. 
C) lenders lose in the economy. 
D) firms lose because they incur menu costs.

Question 11

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 12

When the price of gasoline rises,some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars.The fact that the CPI does not fully account for such changes in consumer behavior is called

Accepted Answer

A) outlet bias. 
B) increase in quality bias. 
C) substitution bias. 
D) discrimination bias. 
A) outlet bias. 
B) increase in quality bias. 
C) substitution bias. 
D) discrimination bias.

Question 13

What is the natural rate of unemployment,and what types of unemployment constitute the natural rate of unemployment?

Accepted Answer

The natural rate of unemployment is the

Question 14

If the minimum wage is set above the market wage

Accepted Answer

A) the quantity of labor supplied will be below the quantity of labor demanded. 
B) unemployment will rise. 
C) highly-skilled workers will have a harder time finding jobs. 
D) All of the above are correct. 
A) the quantity of labor supplied will be below the quantity of labor demanded. 
B) unemployment will rise. 
C) highly-skilled workers will have a harder time finding jobs. 
D) All of the above are correct.

Question 15

Table 9-20
   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 9-20.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 = @#IMG-DLM& × 100. Real median

Question 16

The base period for CPI calculations is generally 1982-84.In 2005,50% of households accessed the Internet through a broadband connection that would not have existed in the 1980s.This potential for bias in the CPI is referred to as ________ bias and results in ________.

Accepted Answer

A) outlet; the CPI underestimating the true change in the cost of living 
B) new product; the CPI overestimating the true change in the cost of living 
C) outlet; the CPI overestimating the true change in the cost of living 
D) net product; the CPI underestimating the true change in the cost of living 
A) outlet; the CPI underestimating the true change in the cost of living 
B) new product; the CPI overestimating the true change in the cost of living 
C) outlet; the CPI overestimating the true change in the cost of living 
D) net product; the CPI underestimating the true change in the cost of living

Question 17

Real interest rates at times have been negative.Why would anyone lending money agree to a negative real interest rate?

Accepted Answer

The lender did not agree to a negative r

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Table 9-8
  
-Refer to Table 9-8.Suppose that the data in the table above reflect the price levels in the economy.What is the inflation rate in between 2017 and 2018?

Accepted Answer

A) 2% 
B) 5% 
C) 10% 
D) 12% 
E) 20% 
A) 2% 
B) 5% 
C) 10% 
D) 12% 
E) 20%

Question 20

In the modern U.S.economy,the typical unemployed person stays unemployed for

Accepted Answer

A) a relatively long time,over a year. 
B) a relatively short time,less than six months. 
C) a long time during expansions and a short time during recessions. 
D) an amount of time that is hard to quantify. 
A) a relatively long time,over a year. 
B) a relatively short time,less than six months. 
C) a long time during expansions and a short time during recessions. 
D) an amount of time that is hard to quantify.

The most widely used measure of inflation is based on which of the following price indices?

The U.S.unemployment insurance program

With the exception of during recessions,workers in Canada are eligible for unemployment benefits for about twice as long a period of time as workers in the United States.As a result

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 .

If your nominal wage rises more slowly than the price level,we can say your real wage has and the purchasing power of a dollar has .

The average price of goods and services in the economy is also known as

By offering training to workers whose firms laid them off because of competition from foreign firms,the federal government is attempting to reduce

The costs to firms of changing prices are called

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

If inflation is completely anticipated

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.

When the price of gasoline rises,some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars.The fact that the CPI does not fully account for such changes in consumer behavior is called

What is the natural rate of unemployment,and what types of unemployment constitute the natural rate of unemployment?

If the minimum wage is set above the market wage

The base period for CPI calculations is generally 1982-84.In 2005,50% of households accessed the Internet through a broadband connection that would not have existed in the 1980s.This potential for bias in the CPI is referred to as bias and results in .

Real interest rates at times have been negative.Why would anyone lending money agree to a negative real interest rate?

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

Table 9-8 -Refer to Table 9-8.Suppose that the data in the table above reflect the price levels in the economy.What is the inflation rate in between 2017 and 2018?

In the modern U.S.economy,the typical unemployed person stays unemployed for

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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Exam 9: Unemployment and Inflation

The most widely used measure of inflation is based on which of the following price indices?

The U.S.unemployment insurance program

With the exception of during recessions,workers in Canada are eligible for unemployment benefits for about twice as long a period of time as workers in the United States.As a result

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 ________.

If your nominal wage rises more slowly than the price level,we can say your real wage has ________ and the purchasing power of a dollar has ________.

The average price of goods and services in the economy is also known as

By offering training to workers whose firms laid them off because of competition from foreign firms,the federal government is attempting to reduce

The costs to firms of changing prices are called

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

If inflation is completely anticipated

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.

When the price of gasoline rises,some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars.The fact that the CPI does not fully account for such changes in consumer behavior is called

What is the natural rate of unemployment,and what types of unemployment constitute the natural rate of unemployment?

If the minimum wage is set above the market wage

The base period for CPI calculations is generally 1982-84.In 2005,50% of households accessed the Internet through a broadband connection that would not have existed in the 1980s.This potential for bias in the CPI is referred to as ________ bias and results in ________.

Real interest rates at times have been negative.Why would anyone lending money agree to a negative real interest rate?

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

Table 9-8 -Refer to Table 9-8.Suppose that the data in the table above reflect the price levels in the economy.What is the inflation rate in between 2017 and 2018?

In the modern U.S.economy,the typical unemployed person stays unemployed for

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

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 .

If your nominal wage rises more slowly than the price level,we can say your real wage has and the purchasing power of a dollar has .

The base period for CPI calculations is generally 1982-84.In 2005,50% of households accessed the Internet through a broadband connection that would not have existed in the 1980s.This potential for bias in the CPI is referred to as bias and results in .