Question 1

The labor force participation rate is defined as

Accepted Answer

A) the percentage of the working-age population that is employed. 
B) the percentage of the working-age population that is unemployed. 
C) the percentage of the labor force that is employed. 
D) the percentage of the labor force that is unemployed. 
E) the percentage of the working-age population in the labor force. 
A) the percentage of the working-age population that is employed. 
B) the percentage of the working-age population that is unemployed. 
C) the percentage of the labor force that is employed. 
D) the percentage of the labor force that is unemployed. 
E) the percentage of the working-age population in the labor force.

Question 2

Imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest.If the inflation rate was 7%,what was the real interest rate you paid?

Accepted Answer

A) 17 percent 
B) 10 percent 
C) 7 percent 
D) 3 percent 
A) 17 percent 
B) 10 percent 
C) 7 percent 
D) 3 percent

Question 3

Workers laid off as a result of a recession suffer

Accepted Answer

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

Question 4

Which of the following is not a cost posed by inflation?

Accepted Answer

A) Inflation reduces the affordability of goods and services to the average consumer. 
B) The money that consumers and firms hold loses its purchasing power. 
C) Firms must pay for changing prices on products and printing new catalogs. 
D) Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation. 
A) Inflation reduces the affordability of goods and services to the average consumer. 
B) The money that consumers and firms hold loses its purchasing power. 
C) Firms must pay for changing prices on products and printing new catalogs. 
D) Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation.

Question 5

Between 2013 and 2014,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 2013 and 2014. 
B) The purchasing power of household income fell between 2013 and 2014. 
C) The purchasing power of household income remained constant between 2013 and 2014. 
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 2013 and 2014. 
B) The purchasing power of household income fell between 2013 and 2014. 
C) The purchasing power of household income remained constant between 2013 and 2014. 
D) The CPI cannot be used to determine how the purchasing power of household income changes over time.

Question 6

If inflation is unanticipated,no redistribution of income can occur.

Accepted Answer

A) True 
 B)False

Question 7

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 8

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 9

How would the unemployment rate and the labor force participation rate change if discouraged workers were counted as unemployed rather than counted as out of the labor force? Show using the formula for both measurements.

Accepted Answer

The unemployment rate is calculated as:

Question 10

Unemployment caused by a business cycle recession is called cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 11

Table 9-5
  
-Refer to Table 9-5.Consider the following values of the consumer price index for 2012 and 2013.The inflation rate for 2013 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 12

Table 9-7
  
-Refer to Table 9-7.Suppose that the data in the table above reflect price levels in the economy.What is the inflation rate between 2012 and 2013?

Accepted Answer

A) 2.9% 
B) 3.5% 
C) 4.6% 
D) 5% 
E) 7.5% 
A) 2.9% 
B) 3.5% 
C) 4.6% 
D) 5% 
E) 7.5%

Question 13

The problem with inflation is that as prices rise,consumers can no longer afford to buy as many goods and services.

Accepted Answer

A) True 
 B)False

Question 14

The labor force is the sum of

Accepted Answer

A) employed workers and discouraged workers. 
B) employed workers and unemployed workers. 
C) employed workers and individuals not looking for work. 
D) employed workers and the working age population. 
E) unemployed workers and the working age population. 
A) employed workers and discouraged workers. 
B) employed workers and unemployed workers. 
C) employed workers and individuals not looking for work. 
D) employed workers and the working age population. 
E) unemployed workers and the working age population.

Question 15

Which of the following would be a consequence of substitution bias in the CPI?

Accepted Answer

A) Social Security payments would not adequately compensate retired workers for inflation. 
B) Businesses would overcompensate employees for inflation when giving the cost of living rises. 
C) The inflation rate based on the CPI would underestimate the true level of inflation. 
D) Judges would award child support payments that would not adequately keep up with the true cost of inflation. 
A) Social Security payments would not adequately compensate retired workers for inflation. 
B) Businesses would overcompensate employees for inflation when giving the cost of living rises. 
C) The inflation rate based on the CPI would underestimate the true level of inflation. 
D) Judges would award child support payments that would not adequately keep up with the true cost of inflation.

Question 16

The GDP deflator is the best measure that reflects the prices of goods and services purchased by the typical household.

Accepted Answer

A) True 
 B)False

Question 17

Due to slowing growth in China and other developing countries,Caterpillar ________ the number of persons it employed in 2013 and this ________ the total number of persons unemployed in the economy.

Accepted Answer

A) decreased; increased 
B) decreased; decreased 
C) increased; decreased 
D) increased; increased 
A) decreased; increased 
B) decreased; decreased 
C) increased; decreased 
D) increased; increased

Question 18

An unemployment insurance program has which of the following effects?

Accepted Answer

A) It decreases the amount of personal income of the unemployed. 
B) It contributes to the severity of a recession or economic downturn. 
C) It increases the amount of time spent searching for a job. 
D) It lowers the overall unemployment rate. 
A) It decreases the amount of personal income of the unemployed. 
B) It contributes to the severity of a recession or economic downturn. 
C) It increases the amount of time spent searching for a job. 
D) It lowers the overall unemployment rate.

Question 19

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 20

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

Accepted Answer

A) inflation 
B) discouraged workers 
C) people employed in the underground economy 
D) unemployed persons falsely report themselves to be actively looking for a job 
A) inflation 
B) discouraged workers 
C) people employed in the underground economy 
D) unemployed persons falsely report themselves to be actively looking for a job

The labor force participation rate is defined as

Imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest.If the inflation rate was 7%,what was the real interest rate you paid?

Workers laid off as a result of a recession suffer

Which of the following is not a cost posed by inflation?

Between 2013 and 2014,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?

If inflation is unanticipated,no redistribution of income can occur.

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

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

How would the unemployment rate and the labor force participation rate change if discouraged workers were counted as unemployed rather than counted as out of the labor force? Show using the formula for both measurements.

Unemployment caused by a business cycle recession is called cyclical unemployment.

Table 9-5 -Refer to Table 9-5.Consider the following values of the consumer price index for 2012 and 2013.The inflation rate for 2013 was equal to

Table 9-7 -Refer to Table 9-7.Suppose that the data in the table above reflect price levels in the economy.What is the inflation rate between 2012 and 2013?

The problem with inflation is that as prices rise,consumers can no longer afford to buy as many goods and services.

The labor force is the sum of

Which of the following would be a consequence of substitution bias in the CPI?

The GDP deflator is the best measure that reflects the prices of goods and services purchased by the typical household.

Due to slowing growth in China and other developing countries,Caterpillar the number of persons it employed in 2013 and this the total number of persons unemployed in the economy.

An unemployment insurance program has which of the following effects?

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

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

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

The labor force participation rate is defined as

Imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest.If the inflation rate was 7%,what was the real interest rate you paid?

Workers laid off as a result of a recession suffer

Which of the following is not a cost posed by inflation?

Between 2013 and 2014,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?

If inflation is unanticipated,no redistribution of income can occur.

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

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

How would the unemployment rate and the labor force participation rate change if discouraged workers were counted as unemployed rather than counted as out of the labor force? Show using the formula for both measurements.

Unemployment caused by a business cycle recession is called cyclical unemployment.

Table 9-5 -Refer to Table 9-5.Consider the following values of the consumer price index for 2012 and 2013.The inflation rate for 2013 was equal to

Table 9-7 -Refer to Table 9-7.Suppose that the data in the table above reflect price levels in the economy.What is the inflation rate between 2012 and 2013?

The problem with inflation is that as prices rise,consumers can no longer afford to buy as many goods and services.

The labor force is the sum of

Which of the following would be a consequence of substitution bias in the CPI?

The GDP deflator is the best measure that reflects the prices of goods and services purchased by the typical household.

Due to slowing growth in China and other developing countries,Caterpillar ________ the number of persons it employed in 2013 and this ________ the total number of persons unemployed in the economy.

An unemployment insurance program has which of the following effects?

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

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

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 slowing growth in China and other developing countries,Caterpillar the number of persons it employed in 2013 and this the total number of persons unemployed in the economy.