Question 1

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

Accepted Answer

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

Question 2

Minimum wage laws cause unemployment because the legal minimum wage is set

Accepted Answer

A) below the market wage,causing labor demand to be greater than labor supply. 
B) below the market wage,causing labor demand to be less than labor supply. 
C) above the market wage,causing labor demand to be greater than labor supply. 
D) above the market wage,causing labor demand to be less than labor supply. 
E) too low. 
A) below the market wage,causing labor demand to be greater than labor supply. 
B) below the market wage,causing labor demand to be less than labor supply. 
C) above the market wage,causing labor demand to be greater than labor supply. 
D) above the market wage,causing labor demand to be less than labor supply. 
E) too low.

Question 3

Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?

Accepted Answer

A) A firm signs a 3-year contract with a union based on a 2 percent anticipated rate of inflation per year,and the actual rate of inflation ends up being 7 percent per year. 
B) A worker receives a raise in salary that is less than the rate of inflation,because management under-predicted inflation. 
C) Firms have to hire an extra worker to change prices in its store because of inflation. 
D) A bank collects a lower amount of interest from a loan because inflation was under-predicted. 
A) A firm signs a 3-year contract with a union based on a 2 percent anticipated rate of inflation per year,and the actual rate of inflation ends up being 7 percent per year. 
B) A worker receives a raise in salary that is less than the rate of inflation,because management under-predicted inflation. 
C) Firms have to hire an extra worker to change prices in its store because of inflation. 
D) A bank collects a lower amount of interest from a loan because inflation was under-predicted.

Question 4

Table 13-10
   Salaries in major league baseball have soared over the last 30 to 40 years.Some of the salary increase is due to inflation.The table above reports the consumer price index and the median nominal salary of the New York Yankees for 1989 and 2009.
Source: USA Today Salaries Database,asp.usatoday.com/sports/baseball/salaries/default.aspx
-Refer to Table 13-10.Calculate the real median salary of the New York Yankees in both 1982-1984 dollars and 2009 dollars.Calculate the percentage increase in the median salary of the Yankees from 1989 to 2009 in both nominal terms and in real terms.

Accepted Answer

Real median salary = @#IMG-DLM& × 100.
Real median

Question 5

Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to overstate the true extent of joblessness?

Accepted Answer

A) inflation 
B) discouraged workers 
C) counting people as employed who are working part time,although they would prefer to be working full time 
D) unemployed persons falsely report themselves to be actively looking for a job 
A) inflation 
B) discouraged workers 
C) counting people as employed who are working part time,although they would prefer to be working full time 
D) unemployed persons falsely report themselves to be actively looking for a job

Question 6

According to the text,economists consider full employment to occur when

Accepted Answer

A) everyone who wants a job has a job. 
B) frictional unemployment equals zero. 
C) the sum of frictional unemployment and structural unemployment equals zero. 
D) the unemployment rate consists of only frictional and structural unemployment. 
A) everyone who wants a job has a job. 
B) frictional unemployment equals zero. 
C) the sum of frictional unemployment and structural unemployment equals zero. 
D) the unemployment rate consists of only frictional and structural unemployment.

Question 7

The economy has gone into a recession.You have majored in computer science and,because of the recession,have difficulty in finding a job.Should you go back to school and get a second major?

Accepted Answer

A) Yes,the recession will ensure that you will never find a job as a programmer. 
B) Yes,the recession will lower income in my field permanently. 
C) No,the recession will most likely be short-lived and I can get a job after it is over. 
D) No,the recession will have no impact on my ability to get a job or my future income. 
A) Yes,the recession will ensure that you will never find a job as a programmer. 
B) Yes,the recession will lower income in my field permanently. 
C) No,the recession will most likely be short-lived and I can get a job after it is over. 
D) No,the recession will have no impact on my ability to get a job or my future income.

Question 8

Most of the unemployment that occurred during the Great Depression was

Accepted Answer

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

Question 9

Most economists believe that labor unions significantly increase the overall unemployment rate in the United States.

Accepted Answer

A) True 
 B)False

Question 10

Table 13-8
   The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010.
-Refer to Table 13-8.The percentage change in real average earnings from 1965 to 2010 equals

Accepted Answer

A) 2.0 percent 
B) 19.7 percent. 
C) 24.5 percent. 
D) 80.3 percent. 
A) 2.0 percent 
B) 19.7 percent. 
C) 24.5 percent. 
D) 80.3 percent.

Question 11

Which of the following price indices comes closest to measuring the cost of living of the typical household?

Accepted Answer

A) GDP deflator 
B) producer price index 
C) consumer price index 
D) household price index 
A) GDP deflator 
B) producer price index 
C) consumer price index 
D) household price index

Question 12

When deflation occurs,

Accepted Answer

A) the real interest rate is greater than the nominal interest rate. 
B) the nominal interest rate is greater than the real interest rate. 
C) the nominal interest rate is equal to the real interest rate and inflation is negative. 
D) the nominal interest rate is equal to the real interest rate and inflation is positive. 
A) the real interest rate is greater than the nominal interest rate. 
B) the nominal interest rate is greater than the real interest rate. 
C) the nominal interest rate is equal to the real interest rate and inflation is negative. 
D) the nominal interest rate is equal to the real interest rate and inflation is positive.

Question 13

If your nominal wage rises faster than the price level,we can say your real wage has ________ and the purchasing power of your income 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 14

Table 13-5
  
-Refer to Table 13-5.Consider the following values of the consumer price index for 2010 and 2011.The inflation rate for 2011 was equal to

Accepted Answer

A) 215 percent. 
B) 21.5 percent. 
C) 8.0 percent. 
D) 3.9 percent. 
A) 215 percent. 
B) 21.5 percent. 
C) 8.0 percent. 
D) 3.9 percent.

Question 15

An increase in unemployment insurance payments would,in effect,________ the amount of time spent searching for a job,which would increase ________ unemployment.

Accepted Answer

A) increase;cyclical 
B) increase;frictional 
C) decrease;cyclical 
D) decrease;frictional 
A) increase;cyclical 
B) increase;frictional 
C) decrease;cyclical 
D) decrease;frictional

Question 16

Your grandfather tells you that he earned $7,000/year in his first job in 1961.You earn $35,000/year in your first job in 2011.You know that average prices have risen steadily since 1961.You earn

Accepted Answer

A) 5 times as much as your grandfather in terms of real income. 
B) more than 5 times as much as your grandfather in terms of real income. 
C) less than 5 times as much as your grandfather in terms of real income. 
D) less than 5 times as much as your grandfather in terms of nominal income. 
A) 5 times as much as your grandfather in terms of real income. 
B) more than 5 times as much as your grandfather in terms of real income. 
C) less than 5 times as much as your grandfather in terms of real income. 
D) less than 5 times as much as your grandfather in terms of nominal income.

Question 17

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 18

A student who just graduated from college but has not found a job would most likely be

Accepted Answer

A) frictionally unemployed. 
B) structurally unemployed. 
C) cyclically unemployed. 
D) seasonally unemployed. 
A) frictionally unemployed. 
B) structurally unemployed. 
C) cyclically unemployed. 
D) seasonally unemployed.

Question 19

Efficiency wage is another name for the minimum wage.

Accepted Answer

A) True 
 B)False

Question 20

Why does the substitution bias cause the consumer price index to overstate inflation and the cost of living? Why does the increase in quality bias cause the consumer price index to overstate inflation and the cost of living?

Accepted Answer

The substitution bias causes the CPI to

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

Minimum wage laws cause unemployment because the legal minimum wage is set

Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?

Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to overstate the true extent of joblessness?

According to the text,economists consider full employment to occur when

The economy has gone into a recession.You have majored in computer science and,because of the recession,have difficulty in finding a job.Should you go back to school and get a second major?

Most of the unemployment that occurred during the Great Depression was

Most economists believe that labor unions significantly increase the overall unemployment rate in the United States.

Table 13-8 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 13-8.The percentage change in real average earnings from 1965 to 2010 equals

Which of the following price indices comes closest to measuring the cost of living of the typical household?

When deflation occurs,

If your nominal wage rises faster than the price level,we can say your real wage has and the purchasing power of your income has .

Table 13-5 -Refer to Table 13-5.Consider the following values of the consumer price index for 2010 and 2011.The inflation rate for 2011 was equal to

An increase in unemployment insurance payments would,in effect, the amount of time spent searching for a job,which would increase unemployment.

Your grandfather tells you that he earned $7,000/year in his first job in 1961.You earn $35,000/year in your first job in 2011.You know that average prices have risen steadily since 1961.You earn

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?

A student who just graduated from college but has not found a job would most likely be

Efficiency wage is another name for the minimum wage.

Why does the substitution bias cause the consumer price index to overstate inflation and the cost of living? Why does the increase in quality bias cause the consumer price index to overstate inflation and the cost of living?

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 Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

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

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

Minimum wage laws cause unemployment because the legal minimum wage is set

Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?

Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to overstate the true extent of joblessness?

According to the text,economists consider full employment to occur when

The economy has gone into a recession.You have majored in computer science and,because of the recession,have difficulty in finding a job.Should you go back to school and get a second major?

Most of the unemployment that occurred during the Great Depression was

Most economists believe that labor unions significantly increase the overall unemployment rate in the United States.

Table 13-8 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 13-8.The percentage change in real average earnings from 1965 to 2010 equals

Which of the following price indices comes closest to measuring the cost of living of the typical household?

When deflation occurs,

If your nominal wage rises faster than the price level,we can say your real wage has ________ and the purchasing power of your income has ________.

Table 13-5 -Refer to Table 13-5.Consider the following values of the consumer price index for 2010 and 2011.The inflation rate for 2011 was equal to

An increase in unemployment insurance payments would,in effect,________ the amount of time spent searching for a job,which would increase ________ unemployment.

Your grandfather tells you that he earned $7,000/year in his first job in 1961.You earn $35,000/year in your first job in 2011.You know that average prices have risen steadily since 1961.You earn

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?

A student who just graduated from college but has not found a job would most likely be

Efficiency wage is another name for the minimum wage.

Why does the substitution bias cause the consumer price index to overstate inflation and the cost of living? Why does the increase in quality bias cause the consumer price index to overstate inflation and the cost of living?

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 Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

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

If your nominal wage rises faster than the price level,we can say your real wage has and the purchasing power of your income has .

An increase in unemployment insurance payments would,in effect, the amount of time spent searching for a job,which would increase unemployment.