Question 1

Good X sold for $40 in 1957.The CPI in 1957 was 27.6 and the CPI in 2014 was 244.537.What was the price of good X in 2014 dollars?

Accepted Answer

A) $514.60 
B) $270.92 
C) $1,201.60 
D) $310.92 
E) ​$354.40 
A) $514.60 
B) $270.92 
C) $1,201.60 
D) $310.92 
E) ​$354.40

Question 2

Jones lost his job in industry A,but he has skills that can be transferred to industry B (which is currently hiring).Smith lost a job in industry C,but his skills cannot be transferred to industry B or to any other industry.Jones is __________ unemployed and Smith is __________ unemployed.

Accepted Answer

A) structurally;frictionally 
B) structurally;structurally 
C) frictionally;frictionally 
D) frictionally;structurally 
A) structurally;frictionally 
B) structurally;structurally 
C) frictionally;frictionally 
D) frictionally;structurally

Question 3

Which of the following statements is false?

Accepted Answer

A) Changes in technology can lead to changes in the ways in which people are employed. 
B) Cultural differences may help to explain why some men have difficulty finding jobs in some sectors of the modern economy. 
C) In recent years,the demand for workers in the manufacturing sector has grown dramatically compared to the demand for workers in the service sector. 
D) Some people may be at a loss as to what skills are required of them in the current labor market. 
A) Changes in technology can lead to changes in the ways in which people are employed. 
B) Cultural differences may help to explain why some men have difficulty finding jobs in some sectors of the modern economy. 
C) In recent years,the demand for workers in the manufacturing sector has grown dramatically compared to the demand for workers in the service sector. 
D) Some people may be at a loss as to what skills are required of them in the current labor market.

Question 4

A plumber who quits his job in Indianapolis and moves to Orlando where additional plumbers are needed is said to be ___________________ unemployed

Accepted Answer

A) frictionally 
B) structurally 
C) cyclically 
D) underemployed 
A) frictionally 
B) structurally 
C) cyclically 
D) underemployed

Question 5

If the CPI is 100 in the base year and 108 in the current year,how much did prices rise between the base year and the current year?

Accepted Answer

A) 8 percent 
B) 108 percent 
C) 1.08 percent 
D) 0.08 percent 
E) ​80 percent 
A) 8 percent 
B) 108 percent 
C) 1.08 percent 
D) 0.08 percent 
E) ​80 percent

Question 6

Suppose the market basket consists of 100X,200Y,and 300Z.Current-year prices are $5 for each unit of X,$2 for each unit of Y,and $3 for each unit of Z.Base-year prices are $2 for each unit of X,Y,and Z.What is the approximate CPI in the current year?

Accepted Answer

A) 15 
B) 70.20 
C) 1,200 
D) 150 
A) 15 
B) 70.20 
C) 1,200 
D) 150

Question 7

"Full employment" is said to exist when the unemployment rate equals

Accepted Answer

A) zero. 
B) the cyclical unemployment rate. 
C) the structural unemployment rate. 
D) the natural unemployment rate. 
A) zero. 
B) the cyclical unemployment rate. 
C) the structural unemployment rate. 
D) the natural unemployment rate.

Question 8

Look at the following data: The frictional unemployment rate is 2 percent,the structural unemployment rate is 3.5 percent,and the actual unemployment rate is 9.5 percent.The natural unemployment rate is ____________ percent and the cyclical unemployment rate is __________ percent.

Accepted Answer

A) 1.5;4 
B) 5.5;4 
C) 1.5;6 
D) 6;15 
A) 1.5;4 
B) 5.5;4 
C) 1.5;6 
D) 6;15

Question 9

The CPI in the base year is always equal to 100.

Accepted Answer

A) True 
 B)False

Question 10

Assume that Ms.Sawyer's salary is $42,000,up from $40,000 last year,while the CPI is 157.5 this year,up from 150 last year.This means that Ms.Sawyer's real income has

Accepted Answer

A) increased. 
B) decreased. 
C) stayed the same. 
D) It depends on which year is the base year. 
A) increased. 
B) decreased. 
C) stayed the same. 
D) It depends on which year is the base year.

Question 11

Describe the difference between the employment rate and the labor force participation rate (LFPR).Under what circumstance would the two be equal to one another?

Accepted Answer

The employment rate is a measure of the

Question 12

Unemployment that arises as a result of the time it takes for unemployed people to locate a job utilizing their transferable skills is called __________ unemployment.

Accepted Answer

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

Question 13

At the time of Carol's 10 year high school reunion she was earning $30,000 and the CPI was 90.Now that it is time for her to attend her 20 year high school reunion,Carol's income has risen to $65,000 and the CPI is 200.At her 20 year reunion,can Carol rightfully brag that her real income has risen since the last time she saw her former classmates ten years ago?

Accepted Answer

A) Yes,Carol's real income rose during that 10 year period. 
B) No,Carol's real income fell during that 10 year period. 
C) No,Carol's real income remained constant during that 10 year period. 
D) It is impossible to determine what happened to Carol's real income. 
A) Yes,Carol's real income rose during that 10 year period. 
B) No,Carol's real income fell during that 10 year period. 
C) No,Carol's real income remained constant during that 10 year period. 
D) It is impossible to determine what happened to Carol's real income.

Question 14

A movie star was paid $1 million in 1960 to do a movie.The CPI was 29.3 in 1960 and the CPI in 2014 was 240.Approximately how much did the movie star earn in 2014 dollars?

Accepted Answer

A) $0.87 million 
B) $8.66 million 
C) $6.44 million 
D) $7.74 million 
E) ​$8.19 million 
A) $0.87 million 
B) $8.66 million 
C) $6.44 million 
D) $7.74 million 
E) ​$8.19 million

Question 15

One measure of the inflation rate is the

Accepted Answer

A) sum of the CPIs of adjacent years. 
B) percentage change in the CPI of adjacent years. 
C) percentage change in the Real GDP of adjacent years. 
D) GDP minus the Real GDP in a year. 
A) sum of the CPIs of adjacent years. 
B) percentage change in the CPI of adjacent years. 
C) percentage change in the Real GDP of adjacent years. 
D) GDP minus the Real GDP in a year.

Question 16

If there are 10 job losers,12 job leavers,13 reentrants,and 12 new entrants,then there are __________ unemployed persons.

Accepted Answer

A) 35 
B) 47 
C) 25 
D) 37 
E) There is not enough information to answer the question. 
A) 35 
B) 47 
C) 25 
D) 37 
E) There is not enough information to answer the question.

Question 17

Suppose the civilian non-institutional population equals 250,000;there are 132,500 employed persons and 10,000 unemployed persons.How many persons are not in the labor force?

Accepted Answer

A) 122,500 
B) 77,500 
C) 63,500 
D) 107,500 
A) 122,500 
B) 77,500 
C) 63,500 
D) 107,500

Question 18

The cyclical unemployment rate can never be negative.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements is true?

Accepted Answer

A) If the actual unemployment rate is currently 5% and the natural unemployment rate is 5%,then the economy is operating at full-employment. 
B) The labor force participation rate is equal to the civilian noninstitutional population divided by the civilian labor force. 
C) A discouraged worker is counted as an unemployed worker. 
D) a and c 
E) a,b,and c 
A) If the actual unemployment rate is currently 5% and the natural unemployment rate is 5%,then the economy is operating at full-employment. 
B) The labor force participation rate is equal to the civilian noninstitutional population divided by the civilian labor force. 
C) A discouraged worker is counted as an unemployed worker. 
D) a and c 
E) a,b,and c

Question 20

The cyclical unemployment rate is defined as the __________ unemployment rates.

Accepted Answer

A) sum of the structural and the frictional 
B) difference between the structural and the frictional 
C) difference between the existing (actual)and the natural 
D) sum of the natural and the frictional 
A) sum of the structural and the frictional 
B) difference between the structural and the frictional 
C) difference between the existing (actual)and the natural 
D) sum of the natural and the frictional

Exam 6: Macroeconomic Measurements, part I: Prices and Unemployment

Good X sold for $40 in 1957.The CPI in 1957 was 27.6 and the CPI in 2014 was 244.537.What was the price of good X in 2014 dollars?

Jones lost his job in industry A,but he has skills that can be transferred to industry B (which is currently hiring).Smith lost a job in industry C,but his skills cannot be transferred to industry B or to any other industry.Jones is __________ unemployed and Smith is __________ unemployed.

Which of the following statements is false?

A plumber who quits his job in Indianapolis and moves to Orlando where additional plumbers are needed is said to be ___________________ unemployed

If the CPI is 100 in the base year and 108 in the current year,how much did prices rise between the base year and the current year?

Suppose the market basket consists of 100X,200Y,and 300Z.Current-year prices are $5 for each unit of X,$2 for each unit of Y,and $3 for each unit of Z.Base-year prices are $2 for each unit of X,Y,and Z.What is the approximate CPI in the current year?

"Full employment" is said to exist when the unemployment rate equals

Look at the following data: The frictional unemployment rate is 2 percent,the structural unemployment rate is 3.5 percent,and the actual unemployment rate is 9.5 percent.The natural unemployment rate is ____________ percent and the cyclical unemployment rate is __________ percent.

The CPI in the base year is always equal to 100.

Assume that Ms.Sawyer's salary is $42,000,up from $40,000 last year,while the CPI is 157.5 this year,up from 150 last year.This means that Ms.Sawyer's real income has

Describe the difference between the employment rate and the labor force participation rate (LFPR).Under what circumstance would the two be equal to one another?

Unemployment that arises as a result of the time it takes for unemployed people to locate a job utilizing their transferable skills is called __________ unemployment.

A movie star was paid $1 million in 1960 to do a movie.The CPI was 29.3 in 1960 and the CPI in 2014 was 240.Approximately how much did the movie star earn in 2014 dollars?

One measure of the inflation rate is the

If there are 10 job losers,12 job leavers,13 reentrants,and 12 new entrants,then there are __________ unemployed persons.

Suppose the civilian non-institutional population equals 250,000;there are 132,500 employed persons and 10,000 unemployed persons.How many persons are not in the labor force?

The cyclical unemployment rate can never be negative.

Which of the following statements is true?

The cyclical unemployment rate is defined as the __________ unemployment rates.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, part II: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Filters

Jones lost his job in industry A,but he has skills that can be transferred to industry B (which is currently hiring).Smith lost a job in industry C,but his skills cannot be transferred to industry B or to any other industry.Jones is unemployed and Smith is unemployed.

Look at the following data: The frictional unemployment rate is 2 percent,the structural unemployment rate is 3.5 percent,and the actual unemployment rate is 9.5 percent.The natural unemployment rate is __ percent and the cyclical unemployment rate is percent.