Question 1

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 2

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 3

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

Accepted Answer

A) True 
 B)False

Question 4

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 5

The Bureau of Labor Statistics has taken several steps to reduce the bias in the consumer price index.Which of the following is not one of the steps taken to reduce the bias?

Accepted Answer

A) using statistical methods to reduce the size of the quality bias 
B) updating the market basket every two years,rather than every 10 years 
C) incorporating substitutions by consumers when prices of specific products rise rapidly 
D) conducting a point-of-purchase survey to track where consumers actually make their purchases 
A) using statistical methods to reduce the size of the quality bias 
B) updating the market basket every two years,rather than every 10 years 
C) incorporating substitutions by consumers when prices of specific products rise rapidly 
D) conducting a point-of-purchase survey to track where consumers actually make their purchases

Question 6

Due to lowering its prices to compete with its rivals,increased competition from Airbus,and cuts to military spending,Boeing announced it would ________ the number of persons it employed in 2017 and this would ________ the total number of persons unemployed in the economy.

Accepted Answer

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

Question 7

An example of a seasonally unemployed worker would be

Accepted Answer

A) a software engineer who is laid off because of declining demand for the software he writes. 
B) a day care provider who quits his job to go back to school. 
C) a General Motors employee loses her job because the company is downsizing its work force. 
D) a ski lift operator who loses his job when the snow melts in the spring. 
E) a mother who quits her job to stay home with her children. 
A) a software engineer who is laid off because of declining demand for the software he writes. 
B) a day care provider who quits his job to go back to school. 
C) a General Motors employee loses her job because the company is downsizing its work force. 
D) a ski lift operator who loses his job when the snow melts in the spring. 
E) a mother who quits her job to stay home with her children.

Question 8

The Bureau of Labor Statistics does not count discouraged workers as unemployed.Suppose discouraged workers were counted as unemployed.Explain how the unemployment rate and the labor force participation rate would change.

Accepted Answer

Both the unemployment rate and the labor

Question 9

Which of the following describes the accuracy of the Consumer Price Index?

Accepted Answer

A) Changes in the CPI accurately reflect the true rate of inflation. 
B) Changes in the CPI understate the true rate of inflation. 
C) Changes in the CPI overstate the true rate of inflation. 
D) Changes in the CPI are unrelated to the true rate of inflation. 
A) Changes in the CPI accurately reflect the true rate of inflation. 
B) Changes in the CPI understate the true rate of inflation. 
C) Changes in the CPI overstate the true rate of inflation. 
D) Changes in the CPI are unrelated to the true rate of inflation.

Question 10

Eliminating frictional unemployment would be good for the economy.

Accepted Answer

A) True 
 B)False

Question 11

The short-term unemployment arising from the process of matching workers with jobs is called

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 12

Explain whether you agree or disagree with the following statement: "The reason that inflation is bad is because it increases the cost of living-the costs of goods and services we buy-without increasing income in general."

Accepted Answer

Disagree.Inflation,in general,must incre

Question 13

During a deflationary period

Accepted Answer

A) the nominal interest rate is less than the real interest rate. 
B) the real interest rate is less than the nominal interest rate. 
C) the price level rises. 
D) the nominal interest rate does not change. 
A) the nominal interest rate is less than the real interest rate. 
B) the real interest rate is less than the nominal interest rate. 
C) the price level rises. 
D) the nominal interest rate does not change.

Question 14

When actual inflation is less than expected inflation

Accepted Answer

A) borrowers lose and lenders gain. 
B) borrowers gain and lenders lose. 
C) borrowers and lenders both gain. 
D) borrowers and lenders both lose. 
A) borrowers lose and lenders gain. 
B) borrowers gain and lenders lose. 
C) borrowers and lenders both gain. 
D) borrowers and lenders both lose.

Question 15

Table 9-5
  
-Refer to Table 9-5.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 16

Which of the following explains why many European countries have unemployment rates that are higher than in the United States?

Accepted Answer

A) Technological change occurs at a faster rate in Europe,so structural unemployment is higher in Europe. 
B) European countries offer higher unemployment benefits than the United States. 
C) Firms in European countries offer employees higher wages and higher benefits than do firms in the United States. 
D) The minimum wage in Europe is lower than it is in the United States. 
A) Technological change occurs at a faster rate in Europe,so structural unemployment is higher in Europe. 
B) European countries offer higher unemployment benefits than the United States. 
C) Firms in European countries offer employees higher wages and higher benefits than do firms in the United States. 
D) The minimum wage in Europe is lower than it is in the United States.

Question 17

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 18

Labor unions cause unemployment because the union contract wage is set

Accepted Answer

A) below the market wage,causing a shortage of labor. 
B) below the market wage,causing a surplus of labor. 
C) above the market wage,causing a surplus of labor. 
D) above the market wage,causing a shortage of labor. 
A) below the market wage,causing a shortage of labor. 
B) below the market wage,causing a surplus of labor. 
C) above the market wage,causing a surplus of labor. 
D) above the market wage,causing a shortage of labor.

Question 19

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 20

The nominal interest rate equals the real 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

Full employment is not considered to be zero unemployment,because

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

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

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?

The Bureau of Labor Statistics has taken several steps to reduce the bias in the consumer price index.Which of the following is not one of the steps taken to reduce the bias?

Due to lowering its prices to compete with its rivals,increased competition from Airbus,and cuts to military spending,Boeing announced it would the number of persons it employed in 2017 and this would the total number of persons unemployed in the economy.

An example of a seasonally unemployed worker would be

The Bureau of Labor Statistics does not count discouraged workers as unemployed.Suppose discouraged workers were counted as unemployed.Explain how the unemployment rate and the labor force participation rate would change.

Which of the following describes the accuracy of the Consumer Price Index?

Eliminating frictional unemployment would be good for the economy.

The short-term unemployment arising from the process of matching workers with jobs is called

Explain whether you agree or disagree with the following statement: "The reason that inflation is bad is because it increases the cost of living-the costs of goods and services we buy-without increasing income in general."

During a deflationary period

When actual inflation is less than expected inflation

Table 9-5 -Refer to Table 9-5.Consider the following values of the consumer price index for 2017 and 2018.The inflation rate for 2018 was equal to

Which of the following explains why many European countries have unemployment rates that are higher than in the United States?

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?

Labor unions cause unemployment because the union contract wage is set

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

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

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

Exam 9: Unemployment and Inflation

Full employment is not considered to be zero unemployment,because

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

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

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?

The Bureau of Labor Statistics has taken several steps to reduce the bias in the consumer price index.Which of the following is not one of the steps taken to reduce the bias?

Due to lowering its prices to compete with its rivals,increased competition from Airbus,and cuts to military spending,Boeing announced it would ________ the number of persons it employed in 2017 and this would ________ the total number of persons unemployed in the economy.

An example of a seasonally unemployed worker would be

The Bureau of Labor Statistics does not count discouraged workers as unemployed.Suppose discouraged workers were counted as unemployed.Explain how the unemployment rate and the labor force participation rate would change.

Which of the following describes the accuracy of the Consumer Price Index?

Eliminating frictional unemployment would be good for the economy.

The short-term unemployment arising from the process of matching workers with jobs is called

Explain whether you agree or disagree with the following statement: "The reason that inflation is bad is because it increases the cost of living-the costs of goods and services we buy-without increasing income in general."

During a deflationary period

When actual inflation is less than expected inflation

Table 9-5 -Refer to Table 9-5.Consider the following values of the consumer price index for 2017 and 2018.The inflation rate for 2018 was equal to

Which of the following explains why many European countries have unemployment rates that are higher than in the United States?

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?

Labor unions cause unemployment because the union contract wage is set

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

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

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

Due to lowering its prices to compete with its rivals,increased competition from Airbus,and cuts to military spending,Boeing announced it would the number of persons it employed in 2017 and this would the total number of persons unemployed in the economy.