Question 1

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 that got laid off because of the recession of 2007-2009 
D) a lifeguard who was hired during the summer season is laid off after summer is over 
E) 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 that got laid off because of the recession of 2007-2009 
D) a lifeguard who was hired during the summer season is laid off after summer is over 
E) a worker who quits his job because he does not get along with his boss

Question 2

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 3

The unemployment rate is an important economic statistic that can tell us about the health of the economy.If the unemployment rate turns out to be high or higher than anticipated,we would expect

Accepted Answer

A) it is more likely that an incumbent president will be re-elected. 
B) that stock prices are more likely to fall. 
C) that jobs are less difficult to find. 
D) that investors will be more optimistic about the economy. 
A) it is more likely that an incumbent president will be re-elected. 
B) that stock prices are more likely to fall. 
C) that jobs are less difficult to find. 
D) that investors will be more optimistic about the economy.

Question 4

Why might firms pay wages that are above the equilibrium wage in a market?

Accepted Answer

A) to increase the productivity of their workers 
B) to reduce the unemployment rate 
C) to encourage workers to form labor unions 
D) to reduce profit 
A) to increase the productivity of their workers 
B) to reduce the unemployment rate 
C) to encourage workers to form labor unions 
D) to reduce profit

Question 5

The unemployment rate is

Accepted Answer

A) the percentage of the labor force that is employed. 
B) the percentage of the number employed that is unemployed. 
C) the percentage of the working-age population that is unemployed. 
D) the percentage of the labor force that is unemployed. 
E) the percentage of the working-age population that is employed. 
A) the percentage of the labor force that is employed. 
B) the percentage of the number employed that is unemployed. 
C) the percentage of the working-age population that is unemployed. 
D) the percentage of the labor force that is unemployed. 
E) the percentage of the working-age population that is employed.

Question 6

In 2006,before the start of the recession,the employment-population ratio was 63.4 percent.In August 2015,more than six years after the end of the recession,the ratio

Accepted Answer

A) was still 50 percent lower than the ratio in 2006. 
B) was still only 59.4 percent. 
C) was back to its 2006 level. 
D) had increased to 72.3 percent. 
A) was still 50 percent lower than the ratio in 2006. 
B) was still only 59.4 percent. 
C) was back to its 2006 level. 
D) had increased to 72.3 percent.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

The labor force equals the number of people

Accepted Answer

A) employed. 
B) unemployed. 
C) employed plus unemployed. 
D) in the working-age population. 
A) employed. 
B) unemployed. 
C) employed plus unemployed. 
D) in the working-age population.

Question 9

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 10

Mike has been unemployed for over a year.He hasn't looked for a job in the last three months,but he's just started looking for work again.Because Mike started looking for a new job

Accepted Answer

A) the unemployment rate increased. 
B) the labor force participation rate decreased. 
C) the unemployment rate decreased. 
D) the working-age population increased. 
A) the unemployment rate increased. 
B) the labor force participation rate decreased. 
C) the unemployment rate decreased. 
D) the working-age population increased.

Question 11

If your nominal wage rises more slowly than the price level,we can say your real wage has ________ and the purchasing power of a dollar has ________.

Accepted Answer

A) fallen;fallen 
B) fallen;risen 
C) risen;risen 
D) risen;fallen 
A) fallen;fallen 
B) fallen;risen 
C) risen;risen 
D) risen;fallen

Question 12

An increase in cyclical unemployment will result in

Accepted Answer

A) an increase in the natural rate of unemployment. 
B) an increase in the unemployment rate. 
C) an increase in structural unemployment. 
D) a decrease in frictional unemployment. 
A) an increase in the natural rate of unemployment. 
B) an increase in the unemployment rate. 
C) an increase in structural unemployment. 
D) a decrease in frictional unemployment.

Question 13

Most economists believe that biases cause changes in the CPI to overstate the inflation rate by ________ percentage points.

Accepted Answer

A) 0.1 to 0.2 
B) 0.2 to 2.0 
C) 0.4 
D) 0.5 to 1.0 
E) 1.0 to 3.0 
A) 0.1 to 0.2 
B) 0.2 to 2.0 
C) 0.4 
D) 0.5 to 1.0 
E) 1.0 to 3.0

Question 14

Suppose you obtain a fixed rate mortgage during a period of relatively high inflation.During the next ten years,inflation falls.Are you a winner or a loser due to inflation? Explain why.

Accepted Answer

You would be a loser under this scenario

Question 15

The Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill.

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

Eliminating frictional unemployment would be good for the economy.

Accepted Answer

A) True 
 B)False

Question 17

Discouraged workers are classified by the BLS as

Accepted Answer

A) part of the labor force. 
B) out of the labor force. 
C) unemployed. 
D) employed. 
E) part-time employees. 
A) part of the labor force. 
B) out of the labor force. 
C) unemployed. 
D) employed. 
E) part-time employees.

Question 18

Assume the average annual CPI values for 2015 and 2016 were 207.3 and 215.3,respectively.What was the percent increase in the CPI between these two years?

Accepted Answer

A) 0.96 
B) 1.04 
C) 3.86 
D) 8.0 
A) 0.96 
B) 1.04 
C) 3.86 
D) 8.0

Question 19

Table 20-19
 $$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Nominal Average Hourly } \
\text { Earnings }
\end{array} & \begin{array} { c } 
\text { CPI } \
( \mathbf { 1 9 8 2 - 1 9 8 4 } = \mathbf { 1 0 0 } )
\end{array} \
\hline 2014 & \$ 10 & 100 \
\hline 2015 & 10 & 105 \
\hline 2016 & 12 & 110 \
\hline
\end{array}$$
-Refer to Table 20-19.Looking at the table above,what is the rate of growth of the average price level from 2014 to 2015?

Accepted Answer

A) 1% 
B) 2% 
C) 3% 
D) 4% 
E) 5% 
A) 1% 
B) 2% 
C) 3% 
D) 4% 
E) 5%

Question 20

If the CPI rises from 206.7 to 212.7 between two consecutive years,by how much has the cost of living changed between these two years?

Accepted Answer

A) The cost of living has increased by 6%. 
B) The cost of living has increased by 2.9%. 
C) The cost of living has increased by 12.7%. 
D) The cost of living has decreased by 6%. 
A) The cost of living has increased by 6%. 
B) The cost of living has increased by 2.9%. 
C) The cost of living has increased by 12.7%. 
D) The cost of living has decreased by 6%.

Exam 20: Unemployment and Inflation

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

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

The unemployment rate is an important economic statistic that can tell us about the health of the economy.If the unemployment rate turns out to be high or higher than anticipated,we would expect

Why might firms pay wages that are above the equilibrium wage in a market?

The unemployment rate is

In 2006,before the start of the recession,the employment-population ratio was 63.4 percent.In August 2015,more than six years after the end of the recession,the ratio

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

The labor force equals the number of people

Mike has been unemployed for over a year.He hasn't looked for a job in the last three months,but he's just started looking for work again.Because Mike started looking for a new job

If your nominal wage rises more slowly than the price level,we can say your real wage has ________ and the purchasing power of a dollar has ________.

An increase in cyclical unemployment will result in

Most economists believe that biases cause changes in the CPI to overstate the inflation rate by ________ percentage points.

Suppose you obtain a fixed rate mortgage during a period of relatively high inflation.During the next ten years,inflation falls.Are you a winner or a loser due to inflation? Explain why.

The Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill.

Eliminating frictional unemployment would be good for the economy.

Discouraged workers are classified by the BLS as

Assume the average annual CPI values for 2015 and 2016 were 207.3 and 215.3,respectively.What was the percent increase in the CPI between these two years?

Table 20-19 Year Nominal Average Hourly Earnings CPI (=) 2014 \ 10 100 2015 10 105 2016 12 110 -Refer to Table 20-19.Looking at the table above,what is the rate of growth of the average price level from 2014 to 2015?

If the CPI rises from 206.7 to 212.7 between two consecutive years,by how much has the cost of living changed between these two years?

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

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

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

If your nominal wage rises more slowly than the price level,we can say your real wage has and the purchasing power of a dollar has .