Question 1

The CPI is also referred to as

Accepted Answer

A) the GDP deflator. 
B) the inflation-consumption index. 
C) the cost-of-living index. 
D) the producer price index. 
A) the GDP deflator. 
B) the inflation-consumption index. 
C) the cost-of-living index. 
D) the producer price index.

Question 2

Suppose the working-age population of a fictional economy falls into the following categories: 90 are retired or homemakers; 60 have full-time employment; 20 have part-time employment; 20 do not have employment,but are actively looking for employment; and 10 would like employment but do not have employment and are not actively looking for employment.The official unemployment rate as calculated by the U.S.Bureau of Labor would equal

Accepted Answer

A) (20/60)× 100. 
B) (20/80)× 100. 
C) (30/80)× 100. 
D) (20/100)× 100. 
A) (20/60)× 100. 
B) (20/80)× 100. 
C) (30/80)× 100. 
D) (20/100)× 100.

Question 3

Housing is the largest component of the U.S.CPI market basket.

Accepted Answer

A) True 
 B)False

Question 4

The advice to "keep searching,there are plenty of jobs around here for which you are qualified," would be most appropriate for which of the following types of unemployment?

Accepted Answer

A) frictional unemployment 
B) structural unemployment 
C) cyclical unemployment 
D) seasonal unemployment 
A) frictional unemployment 
B) structural unemployment 
C) cyclical unemployment 
D) seasonal unemployment

Question 5

Table 9-14
   The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010.
-Refer to Table 9-15.Looking at the table above,real average hourly earnings were equal to ________ in 2012.

Accepted Answer

A) $9 
B) $9.52 
C) $10 
D) $12 
A) $9 
B) $9.52 
C) $10 
D) $12

Question 6

Which of the following describes the accuracy of the Consumer Price Index?

Accepted Answer

A) Changes in the CPI accurately reflect the true rate of inflation. 
B) Changes in the CPI understate the true rate of inflation. 
C) Changes in the CPI overstate the true rate of inflation. 
D) Changes in the CPI are unrelated to the true rate of inflation. 
A) Changes in the CPI accurately reflect the true rate of inflation. 
B) Changes in the CPI understate the true rate of inflation. 
C) Changes in the CPI overstate the true rate of inflation. 
D) Changes in the CPI are unrelated to the true rate of inflation.

Question 7

Table 9-10
  
-Refer to Table 9-10.Suppose an economy has only three goods and the typical family purchases the amounts given in the table above.If 2006 is the base year,then what is the CPI for 2013?

Accepted Answer

A) 14.3 
B) 87.5 
C) 114.3 
D) 160 
A) 14.3 
B) 87.5 
C) 114.3 
D) 160

Question 8

The average price of goods and services in the economy is also known as

Accepted Answer

A) the price level. 
B) the inflation rate. 
C) a market basket. 
D) the cost of living. 
A) the price level. 
B) the inflation rate. 
C) a market basket. 
D) the cost of living.

Question 9

The substitution bias in the consumer price index refers to the idea that consumers ________ the quantity of products they buy in response to price,and the CPI does not reflect this and ________ the cost of the market basket.

Accepted Answer

A) change; overestimates 
B) change; underestimates 
C) do not change; overestimates 
D) do not change; underestimates 
A) change; overestimates 
B) change; underestimates 
C) do not change; overestimates 
D) do not change; underestimates

Question 10

Inflation that is ________ than what is expected benefits ________ and hurts ________.

Accepted Answer

A) less; lenders; borrowers 
B) less; borrowers; lenders 
C) greater; lenders; borrowers 
D) greater; lenders; no one 
A) less; lenders; borrowers 
B) less; borrowers; lenders 
C) greater; lenders; borrowers 
D) greater; lenders; no one

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

By offering training to workers whose firms laid them off because of competition from foreign firms,the federal government is attempting to reduce

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.

Question 13

In August 2013,the U.S.unemployment rate was highest for

Accepted Answer

A) whites. 
B) Hispanics. 
C) high school dropouts. 
D) African-Americans. 
E) Asians. 
A) whites. 
B) Hispanics. 
C) high school dropouts. 
D) African-Americans. 
E) Asians.

Question 14

The average period of unemployment was ________ following the 2007-2009 recession as following any other recession since the end of World War II.

Accepted Answer

A) three times as low 
B) approximately the same 
C) twice as high 
D) eight times as high 
A) three times as low 
B) approximately the same 
C) twice as high 
D) eight times as high

Question 15

Table 9-13
  
-Refer to Table 9-13.Consider a simple economy that produces only three products: tacos,earplugs,and toothbrushes.Use the information in the table to calculate the inflation rate for 2013,as measured by the consumer price index.

Accepted Answer

Total expenditures for 2001 = (5 × $1.50

Question 16

An advantage of the household survey over the establishment survey of the labor market is that the household survey

Accepted Answer

A) is based on actual payrolls,rather than on unverified answers. 
B) includes the number of self-employed persons. 
C) includes the number of discouraged workers. 
D) omits persons employed at newly opened firms. 
A) is based on actual payrolls,rather than on unverified answers. 
B) includes the number of self-employed persons. 
C) includes the number of discouraged workers. 
D) omits persons employed at newly opened firms.

Question 17

Inflation redistributes income to a greater extent when the inflation is unanticipated compared to when the inflation is anticipated.

Accepted Answer

A) True 
 B)False

Question 18

Table 9-16
  
-Refer to Table 9-16.Looking at the table above,real wages ________ from 2011 to 2012,and real wages ________ from 2012 to 2013.

Accepted Answer

A) rose; rose 
B) rose; fell 
C) fell; rose 
D) fell; fell 
A) rose; rose 
B) rose; fell 
C) fell; rose 
D) fell; fell

Question 19

The reasons why someone cannot get a job are similar to the reasons why someone cannot get a date.Using the ideas of frictionally unemployed,structurally unemployed,and cyclically unemployed,describe and explain how a student at your university might be frictionally "undated," structurally "undated," and cyclically "undated."

Accepted Answer

The frictionally "undated" student does

Question 20

The "new product bias" in the consumer price index refers to the idea that

Accepted Answer

A) consumers switch to new goods when the prices of old goods increase,and the CPI overestimates the cost to consumers. 
B) consumers switch to old goods when the prices of new goods increase,and the CPI underestimates the cost to consumers. 
C) consumers prefer new goods,even if they are worse in quality than old goods,and this causes the CPI to underestimate the cost to consumers. 
D) new products' prices often decrease after their initial introduction,and the CPI is adjusted infrequently and overestimates the cost to consumers. 
A) consumers switch to new goods when the prices of old goods increase,and the CPI overestimates the cost to consumers. 
B) consumers switch to old goods when the prices of new goods increase,and the CPI underestimates the cost to consumers. 
C) consumers prefer new goods,even if they are worse in quality than old goods,and this causes the CPI to underestimate the cost to consumers. 
D) new products' prices often decrease after their initial introduction,and the CPI is adjusted infrequently and overestimates the cost to consumers.

The CPI is also referred to as

Housing is the largest component of the U.S.CPI market basket.

The advice to "keep searching,there are plenty of jobs around here for which you are qualified," would be most appropriate for which of the following types of unemployment?

Table 9-14 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 9-15.Looking at the table above,real average hourly earnings were equal to ________ in 2012.

Which of the following describes the accuracy of the Consumer Price Index?

Table 9-10 -Refer to Table 9-10.Suppose an economy has only three goods and the typical family purchases the amounts given in the table above.If 2006 is the base year,then what is the CPI for 2013?

The average price of goods and services in the economy is also known as

The substitution bias in the consumer price index refers to the idea that consumers the quantity of products they buy in response to price,and the CPI does not reflect this and the cost of the market basket.

Inflation that is than what is expected benefits and hurts .

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

By offering training to workers whose firms laid them off because of competition from foreign firms,the federal government is attempting to reduce

In August 2013,the U.S.unemployment rate was highest for

The average period of unemployment was ________ following the 2007-2009 recession as following any other recession since the end of World War II.

Table 9-13 -Refer to Table 9-13.Consider a simple economy that produces only three products: tacos,earplugs,and toothbrushes.Use the information in the table to calculate the inflation rate for 2013,as measured by the consumer price index.

An advantage of the household survey over the establishment survey of the labor market is that the household survey

Inflation redistributes income to a greater extent when the inflation is unanticipated compared to when the inflation is anticipated.

Table 9-16 -Refer to Table 9-16.Looking at the table above,real wages from 2011 to 2012,and real wages from 2012 to 2013.

The "new product bias" in the consumer price index refers to the idea that

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 CPI is also referred to as

Housing is the largest component of the U.S.CPI market basket.

The advice to "keep searching,there are plenty of jobs around here for which you are qualified," would be most appropriate for which of the following types of unemployment?

Table 9-14 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 9-15.Looking at the table above,real average hourly earnings were equal to ________ in 2012.

Which of the following describes the accuracy of the Consumer Price Index?

Table 9-10 -Refer to Table 9-10.Suppose an economy has only three goods and the typical family purchases the amounts given in the table above.If 2006 is the base year,then what is the CPI for 2013?

The average price of goods and services in the economy is also known as

The substitution bias in the consumer price index refers to the idea that consumers ________ the quantity of products they buy in response to price,and the CPI does not reflect this and ________ the cost of the market basket.

Inflation that is ________ than what is expected benefits ________ and hurts ________.

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

By offering training to workers whose firms laid them off because of competition from foreign firms,the federal government is attempting to reduce

In August 2013,the U.S.unemployment rate was highest for

The average period of unemployment was ________ following the 2007-2009 recession as following any other recession since the end of World War II.

Table 9-13 -Refer to Table 9-13.Consider a simple economy that produces only three products: tacos,earplugs,and toothbrushes.Use the information in the table to calculate the inflation rate for 2013,as measured by the consumer price index.

An advantage of the household survey over the establishment survey of the labor market is that the household survey

Inflation redistributes income to a greater extent when the inflation is unanticipated compared to when the inflation is anticipated.

Table 9-16 -Refer to Table 9-16.Looking at the table above,real wages ________ from 2011 to 2012,and real wages ________ from 2012 to 2013.

The "new product bias" in the consumer price index refers to the idea that

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

The substitution bias in the consumer price index refers to the idea that consumers the quantity of products they buy in response to price,and the CPI does not reflect this and the cost of the market basket.

Inflation that is than what is expected benefits and hurts .

Table 9-16 -Refer to Table 9-16.Looking at the table above,real wages from 2011 to 2012,and real wages from 2012 to 2013.