Question 1

Suppose that the data in the following table reflects the prices in the economy.What is the inflation rate between 2013 and 2014?

Accepted Answer

A)  5 per cent 
B)  2.9 per cent 
C)  4.6 per cent 
D)  7.5 per cent 
A)  5 per cent 
B)  2.9 per cent 
C)  4.6 per cent 
D)  7.5 per cent

Question 2

If the CPI changes from 125 to 120 between 2013 and 2014,how did prices change between 2013 and 2014?

Accepted Answer

A)  Prices increased by 5 per cent. 
B)  Prices decreased by 5 per cent. 
C)  Prices increased by 25 per cent. 
D)  Prices decreased by 4 per cent. 
A)  Prices increased by 5 per cent. 
B)  Prices decreased by 5 per cent. 
C)  Prices increased by 25 per cent. 
D)  Prices decreased by 4 per cent.

Question 3

A full-time student who is not working is categorised as

Accepted Answer

A)  unemployed. 
B)  employed. 
C)  not in the labour force. 
D)  a discouraged worker. 
A)  unemployed. 
B)  employed. 
C)  not in the labour force. 
D)  a discouraged worker.

Question 4

Cost-push inflation is characterised by

Accepted Answer

A)  very high levels of aggregate demand pushing prices higher. 
B)  the short-run aggregate supply curve shifting to the right. 
C)  rising prices and rising unemployment. 
D)  an increase in the level of nominal wages. 
A)  very high levels of aggregate demand pushing prices higher. 
B)  the short-run aggregate supply curve shifting to the right. 
C)  rising prices and rising unemployment. 
D)  an increase in the level of nominal wages.

Question 5

What is the difference between demand-pull inflation and cost-push inflation?

Accepted Answer

Demand-pull inflation is caused by an in

Question 6

The GDP deflator includes the price changes of all newly produced goods and services while the consumer price index only includes the price changes of some newly produced goods and services.

Accepted Answer

A) True 
 B)False

Question 7

When the price of petrol rises,some consumers begin riding their bikes more frequently or taking public transport instead of driving their cars.The fact that the CPI does not fully account for such changes in consumer behaviour is called

Accepted Answer

A)  outlet bias. 
B)  increase in quality bias. 
C)  substitution bias. 
D)  discrimination bias. 
A)  outlet bias. 
B)  increase in quality bias. 
C)  substitution bias. 
D)  discrimination bias.

Question 8

The inflation rate measures the percentage increase in the price level from one year to the next.

Accepted Answer

A) True 
 B)False

Question 9

Paying efficiency wages is a way for a company to cut costs and become more efficient,and they are therefore lower than market wages.

Accepted Answer

A) True 
 B)False

Question 10

The labour market is considered to be at full employment when

Accepted Answer

A)  there are no unemployed workers. 
B)  all unemployment is voluntary. 
C)  all unemployment is frictional or structural. 
D)  there are more unemployed workers than job vacancies. 
A)  there are no unemployed workers. 
B)  all unemployment is voluntary. 
C)  all unemployment is frictional or structural. 
D)  there are more unemployed workers than job vacancies.

Question 11

Assume that the base period for CPI calculations is 1980.In Australia in 2011,around 24 per cent of people accessed the internet through a broadband connection that did not exist in the 1980s.This potential for bias in the CPI is referred to as ________ bias and results in ________.

Accepted Answer

A)  outlet; the CPI underestimating the true change in the cost of living 
B)  new product; the CPI overestimating the true change in the cost of living 
C)  outlet; the CPI overestimating the true change in the cost of living 
D)  new product; the CPI underestimating the true change in the cost of living 
A)  outlet; the CPI underestimating the true change in the cost of living 
B)  new product; the CPI overestimating the true change in the cost of living 
C)  outlet; the CPI overestimating the true change in the cost of living 
D)  new product; the CPI underestimating the true change in the cost of living

Question 12

When the labour market is at full employment

Accepted Answer

A)  there is only cyclical unemployment in the economy. 
B)  there is only structural unemployment in the economy. 
C)  the unemployment rate is 0 per cent. 
D)  there is no cyclical unemployment in the economy. 
A)  there is only cyclical unemployment in the economy. 
B)  there is only structural unemployment in the economy. 
C)  the unemployment rate is 0 per cent. 
D)  there is no cyclical unemployment in the economy.

Question 13

Which of the following statements is true?

Accepted Answer

A)  When unanticipated inflation occurs regularly, the degree of risk associated with investments in the economy decreases. 
B)  Inflation that is higher than expected benefits debtors, and inflation that is lower than expected benefits creditors. 
C)  Inflation improves the balance of trade as exports appear relatively cheaper to overseas buyers and imports become relatively more expensive. 
D)  There are no costs or losses associated with inflation when it is fully anticipated. 
A)  When unanticipated inflation occurs regularly, the degree of risk associated with investments in the economy decreases. 
B)  Inflation that is higher than expected benefits debtors, and inflation that is lower than expected benefits creditors. 
C)  Inflation improves the balance of trade as exports appear relatively cheaper to overseas buyers and imports become relatively more expensive. 
D)  There are no costs or losses associated with inflation when it is fully anticipated.

Question 14

Using the following table,calculate the real average wage for 1993 and 2013.Calculate the rate of growth of real average wages from 1993 to 2013.Are workers in this country better off in terms of the purchasing power of a dollar in 1993 or 2013? Explain why.

Accepted Answer

The real average wage in 1993 is @#IMG-DLM& × 100

Question 15

The cost to firms of changing prices is called

Accepted Answer

A)  redistribution costs. 
B)  menu costs. 
C)  anticipation costs. 
D)  money illusion costs. 
A)  redistribution costs. 
B)  menu costs. 
C)  anticipation costs. 
D)  money illusion costs.

Question 16

How many broad categories of goods and services are in the CPI market basket,and which three largest groups comprise almost half of the market basket?

Accepted Answer

There are 11 broad categories

Question 17

Which of the following is an example of a worker experiencing cyclical unemployment?

Accepted Answer

A)  A worker who changes jobs to move closer her family. 
B)  An assembly line worker who loses his job because of automation. 
C)  A freightliner employee who was sacked because of a recession. 
D)  A worker who quits his job because he does not get along with his boss. 
A)  A worker who changes jobs to move closer her family. 
B)  An assembly line worker who loses his job because of automation. 
C)  A freightliner employee who was sacked because of a recession. 
D)  A worker who quits his job because he does not get along with his boss.

Question 18

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

Accepted Answer

A)  unemployed. 
B)  out of the labour force. 
C)  a discouraged worker. 
D)  None of these options is correct. 
A)  unemployed. 
B)  out of the labour force. 
C)  a discouraged worker. 
D)  None of these options is correct.

Question 19

Which of the following describes actual trends in the Australian labour force participation rate?

Accepted Answer

A)  The labour force participation rate of adult men has risen since the late 1970s. 
B)  The labour force participation rate of adult women has fallen since the late 1970s. 
C)  The labour force participation rate of adult men not in school, but too young to retire, has risen since the late 1970s. 
D)  The labour force participation rate of adult women has risen since the late 1970s. 
A)  The labour force participation rate of adult men has risen since the late 1970s. 
B)  The labour force participation rate of adult women has fallen since the late 1970s. 
C)  The labour force participation rate of adult men not in school, but too young to retire, has risen since the late 1970s. 
D)  The labour force participation rate of adult women has risen since the late 1970s.

Question 20

Trade union membership in Australia in 2014 comprised approximately

Accepted Answer

A)  90 per cent of the workforce. 
B)  50 per cent of the workforce. 
C)  15 per cent of the workforce. 
D)  18 per cent of the workforce. 
A)  90 per cent of the workforce. 
B)  50 per cent of the workforce. 
C)  15 per cent of the workforce. 
D)  18 per cent of the workforce.

Suppose that the data in the following table reflects the prices in the economy.What is the inflation rate between 2013 and 2014?

If the CPI changes from 125 to 120 between 2013 and 2014,how did prices change between 2013 and 2014?

A full-time student who is not working is categorised as

Cost-push inflation is characterised by

What is the difference between demand-pull inflation and cost-push inflation?

The GDP deflator includes the price changes of all newly produced goods and services while the consumer price index only includes the price changes of some newly produced goods and services.

When the price of petrol rises,some consumers begin riding their bikes more frequently or taking public transport instead of driving their cars.The fact that the CPI does not fully account for such changes in consumer behaviour is called

The inflation rate measures the percentage increase in the price level from one year to the next.

Paying efficiency wages is a way for a company to cut costs and become more efficient,and they are therefore lower than market wages.

The labour market is considered to be at full employment when

Assume that the base period for CPI calculations is 1980.In Australia in 2011,around 24 per cent of people accessed the internet through a broadband connection that did not exist in the 1980s.This potential for bias in the CPI is referred to as bias and results in .

When the labour market is at full employment

Which of the following statements is true?

Using the following table,calculate the real average wage for 1993 and 2013.Calculate the rate of growth of real average wages from 1993 to 2013.Are workers in this country better off in terms of the purchasing power of a dollar in 1993 or 2013? Explain why.

The cost to firms of changing prices is called

How many broad categories of goods and services are in the CPI market basket,and which three largest groups comprise almost half of the market basket?

Which of the following is an example of a worker experiencing cyclical unemployment?

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

Which of the following describes actual trends in the Australian labour force participation rate?

Trade union membership in Australia in 2014 comprised approximately

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 13: Unemployment and Inflation

Suppose that the data in the following table reflects the prices in the economy.What is the inflation rate between 2013 and 2014?

If the CPI changes from 125 to 120 between 2013 and 2014,how did prices change between 2013 and 2014?

A full-time student who is not working is categorised as

Cost-push inflation is characterised by

What is the difference between demand-pull inflation and cost-push inflation?

The GDP deflator includes the price changes of all newly produced goods and services while the consumer price index only includes the price changes of some newly produced goods and services.

When the price of petrol rises,some consumers begin riding their bikes more frequently or taking public transport instead of driving their cars.The fact that the CPI does not fully account for such changes in consumer behaviour is called

The inflation rate measures the percentage increase in the price level from one year to the next.

Paying efficiency wages is a way for a company to cut costs and become more efficient,and they are therefore lower than market wages.

The labour market is considered to be at full employment when

Assume that the base period for CPI calculations is 1980.In Australia in 2011,around 24 per cent of people accessed the internet through a broadband connection that did not exist in the 1980s.This potential for bias in the CPI is referred to as ________ bias and results in ________.

When the labour market is at full employment

Which of the following statements is true?

Using the following table,calculate the real average wage for 1993 and 2013.Calculate the rate of growth of real average wages from 1993 to 2013.Are workers in this country better off in terms of the purchasing power of a dollar in 1993 or 2013? Explain why.

The cost to firms of changing prices is called

How many broad categories of goods and services are in the CPI market basket,and which three largest groups comprise almost half of the market basket?

Which of the following is an example of a worker experiencing cyclical unemployment?

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

Which of the following describes actual trends in the Australian labour force participation rate?

Trade union membership in Australia in 2014 comprised approximately

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Assume that the base period for CPI calculations is 1980.In Australia in 2011,around 24 per cent of people accessed the internet through a broadband connection that did not exist in the 1980s.This potential for bias in the CPI is referred to as bias and results in .