Question 1

Refer to the information provided in Table 7.3 below to answer the questions that follow.
Table 7.3  
-Refer to Table 7.3. The labor force equals

Accepted Answer

A)  95,000 people. 
B)  100,000 people. 
C)  175,000 people. 
D)  180,000 people. 
A)  95,000 people. 
B)  100,000 people. 
C)  175,000 people. 
D)  180,000 people.

Question 2

If 2015 is the base year, the bundle price of goods in 2015 is $500, and the bundle price of goods in 2016 is $700, the 2016 price index is

Accepted Answer

A)  140.0. 
B)  128.6. 
C)  71.4. 
D)  60.0. 
A)  140.0. 
B)  128.6. 
C)  71.4. 
D)  60.0.

Question 3

Output can increase if the workweek is extended.

Accepted Answer

A) True 
 B)False

Question 4

During the Great Depression, the unemployment rate rose to about

Accepted Answer

A)  15%. 
B)  25%. 
C)  40%. 
D)  50%. 
A)  15%. 
B)  25%. 
C)  40%. 
D)  50%.

Question 5

Per capita means per person.

Accepted Answer

A) True 
 B)False

Question 6

The number of people classified as employed is 500,000 and the number of people in the labor force is 550,000. The total number of people classified as unemployed is

Accepted Answer

A)  11,000. 
B)  50,000. 
C)  500,000. 
D)  550,000. 
A)  11,000. 
B)  50,000. 
C)  500,000. 
D)  550,000.

Question 7

If labor markets were perfectly efficient, the unemployment rate would fall to zero.

Accepted Answer

A) True 
 B)False

Question 8

An increase in the overall price level that continues over a significant period of time is

Accepted Answer

A)  high inflation. 
B)  sustained recovery. 
C)  sustained inflation. 
D)  super inflation. 
A)  high inflation. 
B)  sustained recovery. 
C)  sustained inflation. 
D)  super inflation.

Question 9

Related to the Economics in Practice on p. 128: Compared to students who graduate college and obtain employment during a recession, students who graduate during an economic expansion often find that starting wages are ________ and wage growth is ________.

Accepted Answer

A)  lower; slower 
B)  lower; faster 
C)  higher; slower 
D)  higher; faster 
A)  lower; slower 
B)  lower; faster 
C)  higher; slower 
D)  higher; faster

Question 10

When the Fed slows the rate of growth of the money supply to slow down the economy, the unemployment type that will be directly affected is the

Accepted Answer

A)  frictional unemployment. 
B)  structural unemployment. 
C)  cyclical unemployment. 
D)  natural rate of unemployment. 
A)  frictional unemployment. 
B)  structural unemployment. 
C)  cyclical unemployment. 
D)  natural rate of unemployment.

Question 11

The CPI somewhat overstates changes in the cost of living because it does not allow for substitutions that consumers might make in response to price changes.

Accepted Answer

A) True 
 B)False

Question 12

If the labor-force participation rate is 82% and the total population 16 years of age or older is 1 million people, the labor force is

Accepted Answer

A)  910,000 people. 
B)  820,000 people. 
C)  740,000 people. 
D)  180,000 people. 
A)  910,000 people. 
B)  820,000 people. 
C)  740,000 people. 
D)  180,000 people.

Question 13

If 2015 is the base year and the inflation rate between 2015 and 2016 is -4.5, the price index in 2016 is

Accepted Answer

A)  104.5. 
B)  95.5. 
C)  -145.0. 
D)  cannot be determined from this information because the base year is not known 
A)  104.5. 
B)  95.5. 
C)  -145.0. 
D)  cannot be determined from this information because the base year is not known

Question 14

If the labor market becomes less efficient so that the unemployed are more slowly matched with jobs, then

Accepted Answer

A)  the natural rate of unemployment will increase. 
B)  the natural rate of unemployment will decrease. 
C)  the natural rate of unemployment will not change. 
D)  the natural rate of unemployment could either increase or decrease. 
A)  the natural rate of unemployment will increase. 
B)  the natural rate of unemployment will decrease. 
C)  the natural rate of unemployment will not change. 
D)  the natural rate of unemployment could either increase or decrease.

Question 15

If the CPI in 2015 was 104.5 and the CPI in 2016 was 110.5, then the rate of inflation between 2015 and 2016 was

Accepted Answer

A)  5.4%. 
B)  5.7%. 
C)  6.5%. 
D)  7.0%. 
A)  5.4%. 
B)  5.7%. 
C)  6.5%. 
D)  7.0%.

Question 16

Which of the following is a cost associated with recessions and unemployment?

Accepted Answer

A)  increased real output 
B)  the psychological harm done to the unemployed 
C)  increased output in the future 
D)  worsening of the nation's balance of payments 
A)  increased real output 
B)  the psychological harm done to the unemployed 
C)  increased output in the future 
D)  worsening of the nation's balance of payments

Question 17

Refer to the information provided in Table 7.5 below to answer the questions that follow.
Table 7.5  
-Refer to Table 7.5. If 2014 is the base year, the price index in 2015 is

Accepted Answer

A)  93.9. 
B)  94.2. 
C)  105.8. 
D)  106.1. 
A)  93.9. 
B)  94.2. 
C)  105.8. 
D)  106.1.

Question 18

If the CPI in 2015 was 114.7 and the CPI in 2016 was 124.5, then the rate of inflation between 2015 and 2016 was

Accepted Answer

A)  7.9%. 
B)  8.5%. 
C)  9.8%. 
D)  14.7%. 
A)  7.9%. 
B)  8.5%. 
C)  9.8%. 
D)  14.7%.

Question 19

Which of the following statements is true?

Accepted Answer

A)  Whether you gain or lose during a period of inflation depends on whether your income rises faster or slower than the prices of the things you buy. 
B)  Inflation that is higher than expected benefits creditors, and inflation that is lower than expected benefits debtors. 
C)  There are no costs or losses associated with anticipated inflation. 
D)  When unanticipated inflation occurs regularly, the degree of risk associated with investments in the economy decreases. 
A)  Whether you gain or lose during a period of inflation depends on whether your income rises faster or slower than the prices of the things you buy. 
B)  Inflation that is higher than expected benefits creditors, and inflation that is lower than expected benefits debtors. 
C)  There are no costs or losses associated with anticipated inflation. 
D)  When unanticipated inflation occurs regularly, the degree of risk associated with investments in the economy decreases.

Question 20

The only source of economic growth is technological advancement.

Accepted Answer

A) True 
 B)False

Exam 7: Unemployment, Inflation, and Long-Run Growth

Refer to the information provided in Table 7.3 below to answer the questions that follow. Table 7.3 -Refer to Table 7.3. The labor force equals

If 2015 is the base year, the bundle price of goods in 2015 is $500, and the bundle price of goods in 2016 is $700, the 2016 price index is

Output can increase if the workweek is extended.

During the Great Depression, the unemployment rate rose to about

Per capita means per person.

The number of people classified as employed is 500,000 and the number of people in the labor force is 550,000. The total number of people classified as unemployed is

If labor markets were perfectly efficient, the unemployment rate would fall to zero.

An increase in the overall price level that continues over a significant period of time is

Related to the Economics in Practice on p. 128: Compared to students who graduate college and obtain employment during a recession, students who graduate during an economic expansion often find that starting wages are ________ and wage growth is ________.

When the Fed slows the rate of growth of the money supply to slow down the economy, the unemployment type that will be directly affected is the

The CPI somewhat overstates changes in the cost of living because it does not allow for substitutions that consumers might make in response to price changes.

If the labor-force participation rate is 82% and the total population 16 years of age or older is 1 million people, the labor force is

If 2015 is the base year and the inflation rate between 2015 and 2016 is -4.5, the price index in 2016 is

If the labor market becomes less efficient so that the unemployed are more slowly matched with jobs, then

If the CPI in 2015 was 104.5 and the CPI in 2016 was 110.5, then the rate of inflation between 2015 and 2016 was

Which of the following is a cost associated with recessions and unemployment?

Refer to the information provided in Table 7.5 below to answer the questions that follow. Table 7.5 -Refer to Table 7.5. If 2014 is the base year, the price index in 2015 is

If the CPI in 2015 was 114.7 and the CPI in 2016 was 124.5, then the rate of inflation between 2015 and 2016 was

Which of the following statements is true?

The only source of economic growth is technological advancement.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

Related to the Economics in Practice on p. 128: Compared to students who graduate college and obtain employment during a recession, students who graduate during an economic expansion often find that starting wages are and wage growth is .