Question 1

-Using the above table, the labor force is

Accepted Answer

A)  380,000. 
B)  911,000. 
C)  930,000. 
D)  569,000. 
A)  380,000. 
B)  911,000. 
C)  930,000. 
D)  569,000. A

Question 2

The value of an item expressed in today's dollars is known as

Accepted Answer

A)  inflation. 
B)  deflation. 
C)  the nominal value. 
D)  the real value. 
A)  inflation. 
B)  deflation. 
C)  the nominal value. 
D)  the real value. C

Question 3

Which of the following statements is TRUE about the seasonally adjusted unemployment rate?

Accepted Answer

A)  The seasonally adjusted unemployment rate is the sum of the frictional unemployment rate, structural unemployment rate, and cyclical unemployment rate. 
B)  The seasonally adjusted unemployment rate shows how the unemployment rate fluctuates with the various seasons. 
C)  The seasonally adjusted unemployment rate is the same as the natural rate of unemployment. 
D)  The seasonally adjusted unemployment rate is the rate computed for Fall, Spring, Summer and Winter. 
A)  The seasonally adjusted unemployment rate is the sum of the frictional unemployment rate, structural unemployment rate, and cyclical unemployment rate. 
B)  The seasonally adjusted unemployment rate shows how the unemployment rate fluctuates with the various seasons. 
C)  The seasonally adjusted unemployment rate is the same as the natural rate of unemployment. 
D)  The seasonally adjusted unemployment rate is the rate computed for Fall, Spring, Summer and Winter. A

Question 4

Over the last 100 years in the United States, unemployment reached its highest rate

Accepted Answer

A)  in the 1920s. 
B)  in the 1930s. 
C)  in the 1970s. 
D)  in the first of 2010s. 
A)  in the 1920s. 
B)  in the 1930s. 
C)  in the 1970s. 
D)  in the first of 2010s.

Question 5

-According to the above table, in Year 3, the price index for widgets is

Accepted Answer

A)  100. 
B)  200. 
C)  75. 
D)  150. 
A)  100. 
B)  200. 
C)  75. 
D)  150.

Question 6

If 2010 is the base year in the table shown above, what is the price index for the year 2018?

Accepted Answer

A)  100.0 
B)  114.7 
C)  147.1 
D)  141.7 
A)  100.0 
B)  114.7 
C)  147.1 
D)  141.7

Question 7

To be counted in the labor force

Accepted Answer

A)  a person has to be working at least 40 hours per week. 
B)  a person has to be at least 16 or older, have a job, or if unemployed has to be actively seeking employment. 
C)  a person, irrespective of his or her age, has to be working or, if out of work, actively seeking employment. 
D)  a person has to be over 16 years of age, irrespective of whether she or he is actively seeking work. 
A)  a person has to be working at least 40 hours per week. 
B)  a person has to be at least 16 or older, have a job, or if unemployed has to be actively seeking employment. 
C)  a person, irrespective of his or her age, has to be working or, if out of work, actively seeking employment. 
D)  a person has to be over 16 years of age, irrespective of whether she or he is actively seeking work.

Question 8

Unemployment that results from a mismatch of workers' abilities and skills with current requirements of employers is

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 9

The term "business fluctuations" refers to

Accepted Answer

A)  changes in overall business activity, as evidenced by changes in national income, employment, and the price level. 
B)  changes in the general price level from inflation to deflation, or vice versa. 
C)  changes in the full employment level of economic activity. 
D)  changes in the value of the dollar. 
A)  changes in overall business activity, as evidenced by changes in national income, employment, and the price level. 
B)  changes in the general price level from inflation to deflation, or vice versa. 
C)  changes in the full employment level of economic activity. 
D)  changes in the value of the dollar.

Question 10

The statistical measure of the weighted average of prices of goods purchased by a typical individual is called the

Accepted Answer

A)  Producer Price Index. 
B)  Gross Domestic Product (GDP) deflator. 
C)  Consumer Price Index. 
D)  Personal Consumption Expenditure Index. 
A)  Producer Price Index. 
B)  Gross Domestic Product (GDP) deflator. 
C)  Consumer Price Index. 
D)  Personal Consumption Expenditure Index.

Question 11

A new entrant is an individual

Accepted Answer

A)  in the labor force whose employment was involuntarily terminated. 
B)  who used to work full time but left the labor force and has now reentered it looking for a job. 
C)  in the labor force who quits voluntarily. 
D)  who has never held a full-time job lasting two weeks or longer but is now seeking employment. 
A)  in the labor force whose employment was involuntarily terminated. 
B)  who used to work full time but left the labor force and has now reentered it looking for a job. 
C)  in the labor force who quits voluntarily. 
D)  who has never held a full-time job lasting two weeks or longer but is now seeking employment.

Question 12

In a country, the adult population equals 100,000. There are 50,000 people unemployed and 40,000 people are employed. The labor force participation rate equals

Accepted Answer

A)  90 percent. 
B)  50 percent. 
C)  40 percent. 
D)  an undetermined amount given the lack of information. 
A)  90 percent. 
B)  50 percent. 
C)  40 percent. 
D)  an undetermined amount given the lack of information.

Question 13

An increase in the price of electricity, ceteris paribus, indicates that

Accepted Answer

A)  the purchasing power of money is decreasing. 
B)  the purchasing power of money is increasing. 
C)  electricity is relatively more scarce than it was before. 
D)  inflation is increasing. 
A)  the purchasing power of money is decreasing. 
B)  the purchasing power of money is increasing. 
C)  electricity is relatively more scarce than it was before. 
D)  inflation is increasing.

Question 14

Which of the following would be a leading indicator?

Accepted Answer

A)  the number of unemployment claims 
B)  the real interest rate 
C)  personal income in the United States 
D)  an increase in stock prices 
A)  the number of unemployment claims 
B)  the real interest rate 
C)  personal income in the United States 
D)  an increase in stock prices

Question 15

A period of time in which the overall business activity is rising at a rapid rate is known as

Accepted Answer

A)  inflation. 
B)  hyperinflation. 
C)  an expansion. 
D)  a contraction. 
A)  inflation. 
B)  hyperinflation. 
C)  an expansion. 
D)  a contraction.

Question 16

Mr. Garcia lost his job at a steel mill due to competition from cheaper imported steel. He would be classified as

Accepted Answer

A)  frictionally unemployed. 
B)  not in the labor force. 
C)  cyclically unemployed. 
D)  structurally unemployed. 
A)  frictionally unemployed. 
B)  not in the labor force. 
C)  cyclically unemployed. 
D)  structurally unemployed.

Question 17

Which of the following is a measure of general inflation that is NOT based on a fixed market basket of goods and services?

Accepted Answer

A)  consumer price index 
B)  producer price index 
C)  personal consumption expenditure index 
D)  medical price index 
A)  consumer price index 
B)  producer price index 
C)  personal consumption expenditure index 
D)  medical price index

Question 18

-Refer the above figure. Stage "4" of the economy is called

Accepted Answer

A)  a maturity. 
B)  a spreading out. 
C)  an expansion. 
D)  a development. 
A)  a maturity. 
B)  a spreading out. 
C)  an expansion. 
D)  a development.

Question 19

Which of the following is NOT a criticism of the CPI?

Accepted Answer

A)  The CPI does not account for the way consumer substitute less expensive items for higher priced items. 
B)  The CPI ignores changes in consumption patterns that occur between years in which it revises the index. 
C)  The CPI ignores successful new products until long after they have been introduced. 
D)  The CPI ignores the changes of prices of goods that firms produce and sell to each other. 
A)  The CPI does not account for the way consumer substitute less expensive items for higher priced items. 
B)  The CPI ignores changes in consumption patterns that occur between years in which it revises the index. 
C)  The CPI ignores successful new products until long after they have been introduced. 
D)  The CPI ignores the changes of prices of goods that firms produce and sell to each other.

Question 20

The real rate of interest is

Accepted Answer

A)  the interest rate observed in the market. 
B)  the interest rate observed in the market minus the anticipated inflation rate. 
C)  not influenced by inflation. 
D)  a value that depends upon the stock market. 
A)  the interest rate observed in the market. 
B)  the interest rate observed in the market minus the anticipated inflation rate. 
C)  not influenced by inflation. 
D)  a value that depends upon the stock market.

Exam 7: The Macroeconomy: Unemployment, Inflation, and Deflation

-Using the above table, the labor force is

The value of an item expressed in today's dollars is known as

Which of the following statements is TRUE about the seasonally adjusted unemployment rate?

Over the last 100 years in the United States, unemployment reached its highest rate

-According to the above table, in Year 3, the price index for widgets is

If 2010 is the base year in the table shown above, what is the price index for the year 2018?

To be counted in the labor force

Unemployment that results from a mismatch of workers' abilities and skills with current requirements of employers is

The term "business fluctuations" refers to

The statistical measure of the weighted average of prices of goods purchased by a typical individual is called the

A new entrant is an individual

In a country, the adult population equals 100,000. There are 50,000 people unemployed and 40,000 people are employed. The labor force participation rate equals

An increase in the price of electricity, ceteris paribus, indicates that

Which of the following would be a leading indicator?

A period of time in which the overall business activity is rising at a rapid rate is known as

Mr. Garcia lost his job at a steel mill due to competition from cheaper imported steel. He would be classified as

Which of the following is a measure of general inflation that is NOT based on a fixed market basket of goods and services?

-Refer the above figure. Stage "4" of the economy is called

Which of the following is NOT a criticism of the CPI?

The real rate of interest is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters