Question 1

Assume the average annual CPI values for 2012 and 2013 were 207.3 and 215.3,respectively.What was the percent increase in the CPI between these two years?

Accepted Answer

A) 0.96 
B) 1.04 
C) 3.86 
D) 8.0 
A) 0.96 
B) 1.04 
C) 3.86 
D) 8.0

Question 2

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 3

Jack lost his job six months ago,and he's been actively looking for a new job ever since.The Bureau of Labor Statistics would classify Jack as

Accepted Answer

A) unemployed. 
B) out of the labor force. 
C) a discouraged worker. 
D) all of the above. 
A) unemployed. 
B) out of the labor force. 
C) a discouraged worker. 
D) all of the above.

Question 4

You lend $5,000 to a friend for one year at a nominal interest rate of 10%.The CPI over that year rises from 180 to 190.What is the real rate of interest you will earn?

Accepted Answer

A) 0% 
B) 4.4% 
C) 5.5% 
D) 5.8% 
A) 0% 
B) 4.4% 
C) 5.5% 
D) 5.8%

Question 5

Explain how the CPI is constructed.

Accepted Answer

The Bureau of Labor statistics surveys 3

Question 6

Which of the following policies would reduce structural unemployment?

Accepted Answer

A) an increase in the minimum wage 
B) a job retraining program 
C) implementing an unemployment insurance policy 
D) building an online job database that helps workers find jobs 
A) an increase in the minimum wage 
B) a job retraining program 
C) implementing an unemployment insurance policy 
D) building an online job database that helps workers find jobs

Question 7

Which of the following is true about the consumer price index?

Accepted Answer

A) It accounts for people switching to goods whose prices have fallen. 
B) It assumes that consumers purchase the same amount of each product in the market basket each month. 
C) It frequently updates the price changes of new products added to the market basket,as these have a tendency to fall. 
D) It filters out the part of price increases that occurs because of quality improvements in products. 
A) It accounts for people switching to goods whose prices have fallen. 
B) It assumes that consumers purchase the same amount of each product in the market basket each month. 
C) It frequently updates the price changes of new products added to the market basket,as these have a tendency to fall. 
D) It filters out the part of price increases that occurs because of quality improvements in products.

Question 8

The percent increase in the CPI from one year to the next is a measure of the

Accepted Answer

A) GDP deflator. 
B) unemployment rate. 
C) real interest rate. 
D) inflation rate. 
A) GDP deflator. 
B) unemployment rate. 
C) real interest rate. 
D) inflation rate.

Question 9

The household survey is compiled from firms who answer questions about the number of persons who are employed and on the company payroll.

Accepted Answer

A) True 
 B)False

Question 10

A central concept in macroeconomics is the idea of the natural rate of unemployment.Why does it make sense to define full employment to occur when the unemployment rate equals the natural rate of unemployment,instead of when the unemployment rate equals zero? Elaborate and explain carefully.

Accepted Answer

With a growing,dynamic economy where bus

Question 11

Suppose the government launches a successful advertising campaign that convinces workers with high school degrees to quit their jobs and become full time college students.This would cause

Accepted Answer

A) the unemployment rate to decrease. 
B) the labor force participation rate to decrease. 
C) the number of discouraged workers to increase. 
D) no change in the unemployment rate. 
A) the unemployment rate to decrease. 
B) the labor force participation rate to decrease. 
C) the number of discouraged workers to increase. 
D) no change in the unemployment rate.

Question 12

The natural rate of unemployment is made up of

Accepted Answer

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

Question 13

Which of the following do not suffer the costs of inflation?

Accepted Answer

A) persons on fixed incomes 
B) persons whose incomes rise more rapidly than inflation 
C) firms that have to devote more time and labor to raising prices 
D) an investor that has to pay higher taxes because of the inflation 
A) persons on fixed incomes 
B) persons whose incomes rise more rapidly than inflation 
C) firms that have to devote more time and labor to raising prices 
D) an investor that has to pay higher taxes because of the inflation

Question 14

Figure 9-1  
-Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage of $8 per hour is imposed,which of the following will result?

Accepted Answer

A) The quantity of labor demanded by firms will rise. 
B) The quantity of labor demanded by firms will fall. 
C) The unemployment rate will fall. 
D) Both A and C will occur. 
A) The quantity of labor demanded by firms will rise. 
B) The quantity of labor demanded by firms will fall. 
C) The unemployment rate will fall. 
D) Both A and C will occur.

Question 15

Cyclical unemployment is the result of

Accepted Answer

A) a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs. 
B) the search process of matching workers with jobs. 
C) the ups and downs in inflation. 
D) a slowdown in the economy. 
A) a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs. 
B) the search process of matching workers with jobs. 
C) the ups and downs in inflation. 
D) a slowdown in the economy.

Question 16

When an economy is at its natural rate of unemployment,which of the following will be true?

Accepted Answer

A) The unemployment rate will be 0%. 
B) The labor force participation rate will be 100%. 
C) The unemployment rate will be greater than 0%. 
D) Only structural unemployment as a result of technological change will exist in the economy. 
A) The unemployment rate will be 0%. 
B) The labor force participation rate will be 100%. 
C) The unemployment rate will be greater than 0%. 
D) Only structural unemployment as a result of technological change will exist in the economy.

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

According to the text,economists consider full employment to occur when

Accepted Answer

A) everyone who wants a job has a job. 
B) frictional unemployment equals zero. 
C) the sum of frictional unemployment and structural unemployment equals zero. 
D) the unemployment rate consists of only frictional and structural unemployment. 
A) everyone who wants a job has a job. 
B) frictional unemployment equals zero. 
C) the sum of frictional unemployment and structural unemployment equals zero. 
D) the unemployment rate consists of only frictional and structural unemployment.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

You earned $30,000 in 2000,and your salary rose to $80,000 in 2013.If the CPI rose from 82 to 202 between 2000 and 2013,which of the following is true?

Accepted Answer

A) There was deflation between 2000 and 2013. 
B) The purchasing power of your salary fell between 2000 and 2013. 
C) The purchasing power of your salary remained constant between 2000 and 2013. 
D) The purchasing power of your salary increased between 2000 and 2013. 
A) There was deflation between 2000 and 2013. 
B) The purchasing power of your salary fell between 2000 and 2013. 
C) The purchasing power of your salary remained constant between 2000 and 2013. 
D) The purchasing power of your salary increased between 2000 and 2013.

Assume the average annual CPI values for 2012 and 2013 were 207.3 and 215.3,respectively.What was the percent increase in the CPI between these two years?

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 .

Jack lost his job six months ago,and he's been actively looking for a new job ever since.The Bureau of Labor Statistics would classify Jack as

You lend $5,000 to a friend for one year at a nominal interest rate of 10%.The CPI over that year rises from 180 to 190.What is the real rate of interest you will earn?

Explain how the CPI is constructed.

Which of the following policies would reduce structural unemployment?

Which of the following is true about the consumer price index?

The percent increase in the CPI from one year to the next is a measure of the

The household survey is compiled from firms who answer questions about the number of persons who are employed and on the company payroll.

A central concept in macroeconomics is the idea of the natural rate of unemployment.Why does it make sense to define full employment to occur when the unemployment rate equals the natural rate of unemployment,instead of when the unemployment rate equals zero? Elaborate and explain carefully.

Suppose the government launches a successful advertising campaign that convinces workers with high school degrees to quit their jobs and become full time college students.This would cause

The natural rate of unemployment is made up of

Which of the following do not suffer the costs of inflation?

Figure 9-1 -Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage of $8 per hour is imposed,which of the following will result?

Cyclical unemployment is the result of

When an economy is at its natural rate of unemployment,which of the following will be true?

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?

According to the text,economists consider full employment to occur when

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

You earned $30,000 in 2000,and your salary rose to $80,000 in 2013.If the CPI rose from 82 to 202 between 2000 and 2013,which of the following is true?

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

Assume the average annual CPI values for 2012 and 2013 were 207.3 and 215.3,respectively.What was the percent increase in the CPI between these two years?

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 ________.

Jack lost his job six months ago,and he's been actively looking for a new job ever since.The Bureau of Labor Statistics would classify Jack as

You lend $5,000 to a friend for one year at a nominal interest rate of 10%.The CPI over that year rises from 180 to 190.What is the real rate of interest you will earn?

Explain how the CPI is constructed.

Which of the following policies would reduce structural unemployment?

Which of the following is true about the consumer price index?

The percent increase in the CPI from one year to the next is a measure of the

The household survey is compiled from firms who answer questions about the number of persons who are employed and on the company payroll.

A central concept in macroeconomics is the idea of the natural rate of unemployment.Why does it make sense to define full employment to occur when the unemployment rate equals the natural rate of unemployment,instead of when the unemployment rate equals zero? Elaborate and explain carefully.

Suppose the government launches a successful advertising campaign that convinces workers with high school degrees to quit their jobs and become full time college students.This would cause

The natural rate of unemployment is made up of

Which of the following do not suffer the costs of inflation?

Figure 9-1 -Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage of $8 per hour is imposed,which of the following will result?

Cyclical unemployment is the result of

When an economy is at its natural rate of unemployment,which of the following will be true?

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?

According to the text,economists consider full employment to occur when

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

You earned $30,000 in 2000,and your salary rose to $80,000 in 2013.If the CPI rose from 82 to 202 between 2000 and 2013,which of the following is true?

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