Question 1

Price stability refers to:

Accepted Answer

A)  A constant average price level. 
B)  The absence of significant changes in the average price level. 
C)  An inflation rate of zero. 
D)  Increases in prices equal to or less than the growth rate of the economy. 
A)  A constant average price level. 
B)  The absence of significant changes in the average price level. 
C)  An inflation rate of zero. 
D)  Increases in prices equal to or less than the growth rate of the economy.

Question 2

A stock person who is laid off by a department store because retail sales across the country have decreased is _______ unemployed.

Accepted Answer

A)  Frictionally 
B)  Structurally 
C)  Cyclically 
D)  Chronically 
A)  Frictionally 
B)  Structurally 
C)  Cyclically 
D)  Chronically

Question 3

To construct the Consumer Price Index,the Bureau of Labor Statistics must:

Accepted Answer

A)  Convert nominal incomes into real GDP and then compute the percentage increase on an annual basis. 
B)  Interview people to determine their willingness and ability to work and their average income. 
C)  Construct an index of the growth rate of real income to measure the growth of the economy. 
D)  Find out what people buy and then survey how the prices of these items change. 
A)  Convert nominal incomes into real GDP and then compute the percentage increase on an annual basis. 
B)  Interview people to determine their willingness and ability to work and their average income. 
C)  Construct an index of the growth rate of real income to measure the growth of the economy. 
D)  Find out what people buy and then survey how the prices of these items change.

Question 4

Table 10.1-Population and labor force data.  
-In Table 10.1,what is the unemployment rate in Year 1?

Accepted Answer

A)  50 percent 
B)  41.7 percent 
C)  16.7 percent 
D)  8.3 percent. 
A)  50 percent 
B)  41.7 percent 
C)  16.7 percent 
D)  8.3 percent.

Question 5

A plumber quits his job in Dallas and moves to San Francisco where additional plumbers are needed,but it takes a couple of months for him to find a job.He is said to be:

Accepted Answer

A)  Frictionally unemployed 
B)  Structurally unemployed 
C)  Cyclical unemployed 
D)  Underemployed 
A)  Frictionally unemployed 
B)  Structurally unemployed 
C)  Cyclical unemployed 
D)  Underemployed

Question 6

Real GDP measures changes in:

Accepted Answer

A)  Prices but not output. 
B)  Output but not prices. 
C)  Prices and output. 
D)  Inflation. 
A)  Prices but not output. 
B)  Output but not prices. 
C)  Prices and output. 
D)  Inflation.

Question 7

As the economy falls from the peak to the trough of the business cycle:

Accepted Answer

A)  Inflationary pressures should increase as unemployment rises. 
B)  Cyclical unemployment should increase and real GDP should decline. 
C)  Frictional unemployment should fall because people find jobs more quickly. 
D)  Structural unemployment will be eliminated. 
A)  Inflationary pressures should increase as unemployment rises. 
B)  Cyclical unemployment should increase and real GDP should decline. 
C)  Frictional unemployment should fall because people find jobs more quickly. 
D)  Structural unemployment will be eliminated.

Question 8

If the CPI is 119 in Year X,then it costs _______ in Year X to buy the same market basket that cost _______ in the base period.

Accepted Answer

A)  $100;$119 
B)  $119;$100 
C)  $19;$100 
D)  $100;$19 
A)  $100;$119 
B)  $119;$100 
C)  $19;$100 
D)  $100;$19

Question 9

If a person cannot find a job after searching for one year because there is not enough demand in the economy,this is an example of cyclical unemployment.

Accepted Answer

A) True 
 B)False

Price stability refers to:

A stock person who is laid off by a department store because retail sales across the country have decreased is _______ unemployed.

To construct the Consumer Price Index,the Bureau of Labor Statistics must:

Table 10.1-Population and labor force data. -In Table 10.1,what is the unemployment rate in Year 1?

A plumber quits his job in Dallas and moves to San Francisco where additional plumbers are needed,but it takes a couple of months for him to find a job.He is said to be:

Real GDP measures changes in:

As the economy falls from the peak to the trough of the business cycle:

If the CPI is 119 in Year X,then it costs _ in Year X to buy the same market basket that cost _ in the base period.

If a person cannot find a job after searching for one year because there is not enough demand in the economy,this is an example of cyclical unemployment.

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

Exam 10: The Business Cycle

Price stability refers to:

A stock person who is laid off by a department store because retail sales across the country have decreased is _______ unemployed.

To construct the Consumer Price Index,the Bureau of Labor Statistics must:

Table 10.1-Population and labor force data. -In Table 10.1,what is the unemployment rate in Year 1?

A plumber quits his job in Dallas and moves to San Francisco where additional plumbers are needed,but it takes a couple of months for him to find a job.He is said to be:

Real GDP measures changes in:

As the economy falls from the peak to the trough of the business cycle:

If the CPI is 119 in Year X,then it costs _______ in Year X to buy the same market basket that cost _______ in the base period.

If a person cannot find a job after searching for one year because there is not enough demand in the economy,this is an example of cyclical unemployment.

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

If the CPI is 119 in Year X,then it costs _ in Year X to buy the same market basket that cost _ in the base period.