Question 1

Jack just received a promotion at work and now works 50 hours per week instead of 35.As a result,

Accepted Answer

A) the unemployment rate increased. 
B) the unemployment rate decreased. 
C) the labor force participation rate increased. 
D) neither the unemployment rate nor the labor force participation rate changed. 
A) the unemployment rate increased. 
B) the unemployment rate decreased. 
C) the labor force participation rate increased. 
D) neither the unemployment rate nor the labor force participation rate changed.

Question 2

Imagine that you borrow $5,000 for one year and at the end of the year you repay the $5,000 plus $600 of interest.If the inflation rate was 4%,what was the real interest rate you paid?

Accepted Answer

A) 16 percent 
B) 12 percent 
C) 8 percent 
D) 6 percent 
A) 16 percent 
B) 12 percent 
C) 8 percent 
D) 6 percent

Question 3

After the recession of 2007-2009,the unemployment rate peaked at 10.0 percent in October 2009.Eighteen months later,it had

Accepted Answer

A) dropped by 50 percent. 
B) declined by only 1 percentage point. 
C) remained at 10.1 percent. 
D) fallen to the natural rate of unemployment. 
A) dropped by 50 percent. 
B) declined by only 1 percentage point. 
C) remained at 10.1 percent. 
D) fallen to the natural rate of unemployment.

Question 4

An efficiency wage

Accepted Answer

A) is higher than the market wage and tends to increase productivity. 
B) is lower than the market wage and tends to increase productivity. 
C) is higher than the market wage and tends to decrease productivity. 
D) is lower than the market wage and tends to decrease productivity. 
A) is higher than the market wage and tends to increase productivity. 
B) is lower than the market wage and tends to increase productivity. 
C) is higher than the market wage and tends to decrease productivity. 
D) is lower than the market wage and tends to decrease productivity.

Question 5

Emma is a road construction worker.During the winter months,Emma finds it more difficult to get work.The unemployment Emma experiences in the winter is

Accepted Answer

A) structural. 
B) cyclical. 
C) seasonal. 
D) functional. 
A) structural. 
B) cyclical. 
C) seasonal. 
D) functional.

Question 6

Suppose 180,000 people are employed,20,000 people are unemployed,and 50,000 people are out of the labor force,then calculate the labor force participation rate.

Accepted Answer

The labor force participation rate is ca

Question 7

The natural rate of unemployment consists of frictional unemployment plus cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 8

A consumer price index of 160 in 1996 with a base year of 1982-1984 would mean that the cost of the market basket

Accepted Answer

A) equaled $160 in 1996. 
B) equaled $160 in 1983. 
C) rose 160% from the cost of the market basket in the base year. 
D) rose 60% from the cost of the market basket in the base year. 
A) equaled $160 in 1996. 
B) equaled $160 in 1983. 
C) rose 160% from the cost of the market basket in the base year. 
D) rose 60% from the cost of the market basket in the base year.

Question 9

If the nominal interest rate is 6% and the inflation rate is 2% then the real interest rate is

Accepted Answer

A) 8%. 
B) 4%. 
C) 3%. 
D) 2%. 
E) 1%. 
A) 8%. 
B) 4%. 
C) 3%. 
D) 2%. 
E) 1%.

Question 10

The producer price index measures the prices that firms

Accepted Answer

A) pay for imported natural resources that go into the production process. 
B) receive for the goods and services they export. 
C) receive for the goods and services they use at all stages of production. 
D) pay for labor,whether or not the labor is foreign or domestic. 
A) pay for imported natural resources that go into the production process. 
B) receive for the goods and services they export. 
C) receive for the goods and services they use at all stages of production. 
D) pay for labor,whether or not the labor is foreign or domestic.

Question 11

Figure 9-1  
-Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage is set at $5 per hour,which of the following will occur?

Accepted Answer

A) The unemployment rate will rise. 
B) The unemployment rate will fall. 
C) The level of unemployment will rise,but the percentage of the labor force unemployed will not change. 
D) None of the above will occur. 
A) The unemployment rate will rise. 
B) The unemployment rate will fall. 
C) The level of unemployment will rise,but the percentage of the labor force unemployed will not change. 
D) None of the above will occur.

Question 12

To obtain real average hourly earnings,nominal average hourly earnings are multiplied by the CPI.

Accepted Answer

A) True 
 B)False

Question 13

The cost to firms of changing prices

Accepted Answer

A) is small even when there is rapid inflation. 
B) is called a menu cost. 
C) does not exist if inflation is perfectly anticipated. 
D) all of the above 
A) is small even when there is rapid inflation. 
B) is called a menu cost. 
C) does not exist if inflation is perfectly anticipated. 
D) all of the above

Question 14

Using a broader measure of the unemployment rate where discouraged workers and part-time workers who wished to work full time were counted as unemployed,the BLS estimates the unemployment rate in September 2011 would have ________ compared to the measured unemployment rate.

Accepted Answer

A) increased by more than 7 percentage points 
B) more than doubled 
C) decreased by less than 1 percentage point 
D) barely changed 
A) increased by more than 7 percentage points 
B) more than doubled 
C) decreased by less than 1 percentage point 
D) barely changed

Question 15

The Bureau of Labor Statistics would categorize a retiree who is not working as

Accepted Answer

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

Question 16

-Refer to Table 9-1.The labor force participation rate for this simple economy equals

Accepted Answer

A) (1,000/1,100)× 100. 
B) (1,000/15,000)× 100. 
C) (1,100/15,000)× 100. 
D) (1,100/20,000)× 100. 
A) (1,000/1,100)× 100. 
B) (1,000/15,000)× 100. 
C) (1,100/15,000)× 100. 
D) (1,100/20,000)× 100.

Question 17

Discouraged workers are

Accepted Answer

A) workers who have a part time job but want a full time job. 
B) workers who find their current jobs unfulfilling and are considering a job change. 
C) workers who have consistently been looking for work for more than 4 weeks. 
D) workers who have stopped looking for work because they believe there are no jobs for them. 
A) workers who have a part time job but want a full time job. 
B) workers who find their current jobs unfulfilling and are considering a job change. 
C) workers who have consistently been looking for work for more than 4 weeks. 
D) workers who have stopped looking for work because they believe there are no jobs for them.

Question 18

Minimum wage laws cause unemployment because the legal minimum wage is set

Accepted Answer

A) below the market wage,causing labor demand to be greater than labor supply. 
B) below the market wage,causing labor demand to be less than labor supply. 
C) above the market wage,causing labor demand to be greater than labor supply. 
D) above the market wage,causing labor demand to be less than labor supply. 
E) too low. 
A) below the market wage,causing labor demand to be greater than labor supply. 
B) below the market wage,causing labor demand to be less than labor supply. 
C) above the market wage,causing labor demand to be greater than labor supply. 
D) above the market wage,causing labor demand to be less than labor supply. 
E) too low.

Question 19

Article Summary
According to the Bureau of Labor Statistics, the unemployment rate fell from 7.4 percent in July 2013 to 7.3 percent in August, and at the same time the labor force participation rate fell to its lowest level in 35 years, from 63.4 percent to 63.2 percent. The decrease in the labor force participation rate was due to a decline in the size of the workforce of about 300,000 people. A large portion of the job growth in August was in the food service and retail sectors, areas which typically account for part-time and lower-paying jobs. On a brighter note, the average number of hours worked per week rose slightly, as did average hourly earnings and temporary employment.
Source: Peter Coy, "Not Looking for Work: Labor-Force Participation Hits 35-Year Low," BloombergBusinessweek, September 6, 2013.

-Refer to the Article Summary.Explain how the labor force declining by 300,000 people could have led to the decrease in the unemployment rate.

Accepted Answer

The labor force is calculated as the sum

Question 20

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

Jack just received a promotion at work and now works 50 hours per week instead of 35.As a result,

Imagine that you borrow $5,000 for one year and at the end of the year you repay the $5,000 plus $600 of interest.If the inflation rate was 4%,what was the real interest rate you paid?

After the recession of 2007-2009,the unemployment rate peaked at 10.0 percent in October 2009.Eighteen months later,it had

An efficiency wage

Emma is a road construction worker.During the winter months,Emma finds it more difficult to get work.The unemployment Emma experiences in the winter is

Suppose 180,000 people are employed,20,000 people are unemployed,and 50,000 people are out of the labor force,then calculate the labor force participation rate.

The natural rate of unemployment consists of frictional unemployment plus cyclical unemployment.

A consumer price index of 160 in 1996 with a base year of 1982-1984 would mean that the cost of the market basket

If the nominal interest rate is 6% and the inflation rate is 2% then the real interest rate is

The producer price index measures the prices that firms

Figure 9-1 -Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage is set at $5 per hour,which of the following will occur?

To obtain real average hourly earnings,nominal average hourly earnings are multiplied by the CPI.

The cost to firms of changing prices

Using a broader measure of the unemployment rate where discouraged workers and part-time workers who wished to work full time were counted as unemployed,the BLS estimates the unemployment rate in September 2011 would have ________ compared to the measured unemployment rate.

The Bureau of Labor Statistics would categorize a retiree who is not working as

-Refer to Table 9-1.The labor force participation rate for this simple economy equals

Discouraged workers are

Minimum wage laws cause unemployment because the legal minimum wage is set

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

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

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Exam 9: Unemployment and Inflation

Jack just received a promotion at work and now works 50 hours per week instead of 35.As a result,

Imagine that you borrow $5,000 for one year and at the end of the year you repay the $5,000 plus $600 of interest.If the inflation rate was 4%,what was the real interest rate you paid?

After the recession of 2007-2009,the unemployment rate peaked at 10.0 percent in October 2009.Eighteen months later,it had

An efficiency wage

Emma is a road construction worker.During the winter months,Emma finds it more difficult to get work.The unemployment Emma experiences in the winter is

Suppose 180,000 people are employed,20,000 people are unemployed,and 50,000 people are out of the labor force,then calculate the labor force participation rate.

The natural rate of unemployment consists of frictional unemployment plus cyclical unemployment.

A consumer price index of 160 in 1996 with a base year of 1982-1984 would mean that the cost of the market basket

If the nominal interest rate is 6% and the inflation rate is 2% then the real interest rate is

The producer price index measures the prices that firms

Figure 9-1 -Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage is set at $5 per hour,which of the following will occur?

To obtain real average hourly earnings,nominal average hourly earnings are multiplied by the CPI.

The cost to firms of changing prices

Using a broader measure of the unemployment rate where discouraged workers and part-time workers who wished to work full time were counted as unemployed,the BLS estimates the unemployment rate in September 2011 would have ________ compared to the measured unemployment rate.

The Bureau of Labor Statistics would categorize a retiree who is not working as

-Refer to Table 9-1.The labor force participation rate for this simple economy equals

Discouraged workers are

Minimum wage laws cause unemployment because the legal minimum wage is set

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

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