Question 1

Discouraged workers

Accepted Answer

A)  are considered part of the unemployed because they are not working. 
B)  are considered part of the unemployed because they are still in the labor force. 
C)  are not considered part of the unemployed because they quit their jobs voluntarily. 
D)  are not considered part of the unemployed because they are not actively seeking work. 
A)  are considered part of the unemployed because they are not working. 
B)  are considered part of the unemployed because they are still in the labor force. 
C)  are not considered part of the unemployed because they quit their jobs voluntarily. 
D)  are not considered part of the unemployed because they are not actively seeking work.

Question 2

-Refer to the above table. You are given information on Collin's consumption for 2008 and 2018. Using 2008 as the base year, compute the price index for 2018. The index equals

Accepted Answer

A)  1.5. 
B)  70.588. 
C)  141.667. 
D)  107.143. 
A)  1.5. 
B)  70.588. 
C)  141.667. 
D)  107.143.

Question 3

Currently, economists estimate that the natural rate of unemployment in the United States is about

Accepted Answer

A)  10 percent. 
B)  2 percent. 
C)  5 percent. 
D)  0 percent. 
A)  10 percent. 
B)  2 percent. 
C)  5 percent. 
D)  0 percent.

Question 4

Which government agency compiles the consumer price index?

Accepted Answer

A)  the Congressional Budget Office 
B)  the Government Accounting Office 
C)  the Bureau of Labor Statistics 
D)  It is not compiled by a government agency, but rather by an independent research institution called the Conference Board. 
A)  the Congressional Budget Office 
B)  the Government Accounting Office 
C)  the Bureau of Labor Statistics 
D)  It is not compiled by a government agency, but rather by an independent research institution called the Conference Board.

Question 5

Which of the following price indexes is designed to measure changes in the prices of goods and services purchased by a typical individual?

Accepted Answer

A)  Producer Price Index 
B)  Gross Domestic Product (GDP) Deflator 
C)  Index of Leading Economic Indicators 
D)  Consumer Price Index 
A)  Producer Price Index 
B)  Gross Domestic Product (GDP) Deflator 
C)  Index of Leading Economic Indicators 
D)  Consumer Price Index

Question 6

A job loser 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 7

An individual who has stopped looking for a job because he is convinced that he cannot find a job is referred to as

Accepted Answer

A)  a contingent worker. 
B)  a productive worker. 
C)  a discouraged worker. 
D)  an unemployed worker. 
A)  a contingent worker. 
B)  a productive worker. 
C)  a discouraged worker. 
D)  an unemployed worker.

Question 8

The statistical measure of a weighted average of prices of goods and services that firms produce and sell is known as

Accepted Answer

A)  the inflation rate. 
B)  the consumer price index (CPI). 
C)  the producer price index (PPI). 
D)  the Gross Domestic Product (GDP) deflator. 
A)  the inflation rate. 
B)  the consumer price index (CPI). 
C)  the producer price index (PPI). 
D)  the Gross Domestic Product (GDP) deflator.

Question 9

The GDP deflator is

Accepted Answer

A)  an index that utilizes a consumer's market basket of goods in calculating the inflation rate. 
B)  the most general indicator of inflation since it measures changes in the prices of all goods and services in the economy. 
C)  an index used to calculate inflation at the wholesale level. 
D)  the least used index because it is so costly to calculate. 
A)  an index that utilizes a consumer's market basket of goods in calculating the inflation rate. 
B)  the most general indicator of inflation since it measures changes in the prices of all goods and services in the economy. 
C)  an index used to calculate inflation at the wholesale level. 
D)  the least used index because it is so costly to calculate.

Question 10

Which one of the following individuals would be classified as structurally unemployed?

Accepted Answer

A)  Joe was laid off by by his construction company because there was a reduction in the number of houses built in the winter. 
B)  Gail lost her job with the state because there was a reduction in the state budget. 
C)  Tommy lost his job at a Macy department store, which had lost considerable business to online shopping services. 
D)  Fay lost her job in early January when the Christmas store where she worked was closed. 
A)  Joe was laid off by by his construction company because there was a reduction in the number of houses built in the winter. 
B)  Gail lost her job with the state because there was a reduction in the state budget. 
C)  Tommy lost his job at a Macy department store, which had lost considerable business to online shopping services. 
D)  Fay lost her job in early January when the Christmas store where she worked was closed.

Question 11

The GDP deflator is a

Accepted Answer

A)  statistical measure of a weighted average of prices of a specific set of goods and services purchased by wage earners in urban areas. 
B)  statistical measure of a weighted average of prices of commodities that firms produce and sell. 
C)  price index measuring the changes in prices of all new goods and services produced in the economy. 
D)  price index that tracks the price level of commodities that firms purchase from other firms. 
A)  statistical measure of a weighted average of prices of a specific set of goods and services purchased by wage earners in urban areas. 
B)  statistical measure of a weighted average of prices of commodities that firms produce and sell. 
C)  price index measuring the changes in prices of all new goods and services produced in the economy. 
D)  price index that tracks the price level of commodities that firms purchase from other firms.

Question 12

The real rate of interest equals 3% and the expected rate of inflation equals 2%. The nominal rate of interest equals

Accepted Answer

A)  2%. 
B)  3%. 
C)  -1%. 
D)  5%. 
A)  2%. 
B)  3%. 
C)  -1%. 
D)  5%.

Question 13

The indices that are based on a fixed market basket of goods and services are

Accepted Answer

A)  CPI and GDP deflator. 
B)  PPI and GDP deflator. 
C)  CPI and PPI. 
D)  CPI, PPI and GDP deflator. 
A)  CPI and GDP deflator. 
B)  PPI and GDP deflator. 
C)  CPI and PPI. 
D)  CPI, PPI and GDP deflator.

Question 14

You receive a 5 percent raise in your salary. The inflation rate is 6 percent. The purchasing power of your salary has

Accepted Answer

A)  increased by 1 percent. 
B)  decreased by 1 percent. 
C)  increased by 11 percent. 
D)  decreased by 11 percent. 
A)  increased by 1 percent. 
B)  decreased by 1 percent. 
C)  increased by 11 percent. 
D)  decreased by 11 percent.

Question 15

Cyclical unemployment is

Accepted Answer

A)  related to job search difficulties for potential workers. 
B)  a result of a poor match of worker's abilities and skills with current requirements of employers. 
C)  a result of business recessions that occur when aggregate demand is insufficient to create full employment. 
D)  a result of the seasonal pattern of work in specific industries. 
A)  related to job search difficulties for potential workers. 
B)  a result of a poor match of worker's abilities and skills with current requirements of employers. 
C)  a result of business recessions that occur when aggregate demand is insufficient to create full employment. 
D)  a result of the seasonal pattern of work in specific industries.

Question 16

-According to the above table, in the base period (Year 1), the price index is

Accepted Answer

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

Question 17

Unemployment that is caused by business recessions is called

Accepted Answer

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

Question 18

The relationship between the producer price index (PPI) and the consumer price index (CPI) is such that, in the short run

Accepted Answer

A)  the CPI usually increases before the PPI. 
B)  the CPI and the PPI usually move simultaneously. 
C)  the PPI usually increases before the CPI. 
D)  the CPI and the PPI usually move in opposite directions. 
A)  the CPI usually increases before the PPI. 
B)  the CPI and the PPI usually move simultaneously. 
C)  the PPI usually increases before the CPI. 
D)  the CPI and the PPI usually move in opposite directions.

Question 19

People who have dropped out of the labor force and who are no longer looking for a job because they believe the job market has little to offer them are classified by the Labor Department as

Accepted Answer

A)  unemployed. 
B)  non-participants. 
C)  discouraged workers. 
D)  underemployed. 
A)  unemployed. 
B)  non-participants. 
C)  discouraged workers. 
D)  underemployed.

Question 20

What is meant by full employment? Why isn't the full employment rate zero? What causes frictional unemployment?

Accepted Answer

Full employment is the level of unemploy

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

Discouraged workers

-Refer to the above table. You are given information on Collin's consumption for 2008 and 2018. Using 2008 as the base year, compute the price index for 2018. The index equals

Currently, economists estimate that the natural rate of unemployment in the United States is about

Which government agency compiles the consumer price index?

Which of the following price indexes is designed to measure changes in the prices of goods and services purchased by a typical individual?

A job loser is an individual

An individual who has stopped looking for a job because he is convinced that he cannot find a job is referred to as

The statistical measure of a weighted average of prices of goods and services that firms produce and sell is known as

The GDP deflator is

Which one of the following individuals would be classified as structurally unemployed?

The GDP deflator is a

The real rate of interest equals 3% and the expected rate of inflation equals 2%. The nominal rate of interest equals

The indices that are based on a fixed market basket of goods and services are

You receive a 5 percent raise in your salary. The inflation rate is 6 percent. The purchasing power of your salary has

Cyclical unemployment is

-According to the above table, in the base period (Year 1), the price index is

Unemployment that is caused by business recessions is called

The relationship between the producer price index (PPI) and the consumer price index (CPI) is such that, in the short run

People who have dropped out of the labor force and who are no longer looking for a job because they believe the job market has little to offer them are classified by the Labor Department as

What is meant by full employment? Why isn't the full employment rate zero? What causes frictional unemployment?

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

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