Question 1

Full employment is not considered to be zero unemployment,because

Accepted Answer

A) some cyclical unemployment always exists. 
B) some people do not want a job. 
C) there are not enough jobs for everyone who wants one. 
D) people do not find jobs instantaneously. 
A) some cyclical unemployment always exists. 
B) some people do not want a job. 
C) there are not enough jobs for everyone who wants one. 
D) people do not find jobs instantaneously.

Question 2

Table 9-20
   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 2015.
Source: USA Today Salaries Database,http://www.usatoday.com/sports/mlb/yankees/salaries/2015/team/all/
-Refer to Table 9-20.Calculate the real median salary of the New York Yankees in both 1982-1984 dollars and 2015 dollars.Calculate the percentage increase in the median salary of the Yankees from 1989 to 2015 in both nominal terms and in real terms.

Accepted Answer

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

Question 3

There are no costs to inflation if it is fully anticipated.

Accepted Answer

A) True 
 B)False

Question 4

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2016,then the value of your grandfather's salary in 2016 dollars is approximately

Accepted Answer

A) $84,775. 
B) $63,830. 
C) $37,200. 
D) $26,280. 
A) $84,775. 
B) $63,830. 
C) $37,200. 
D) $26,280.

Question 5

Table 9-1
   Consider the data above for a simple economy.
-Refer to Table 9-1.The unemployment rate for this simple economy equals

Accepted Answer

A) (100/1,000)× 100. 
B) (100/1,100)× 100. 
C) (100/15,000)× 100. 
D) (100/20,000)× 100. 
A) (100/1,000)× 100. 
B) (100/1,100)× 100. 
C) (100/15,000)× 100. 
D) (100/20,000)× 100.

Question 6

Figure 9-1  
-Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage of $8 per hour is imposed,which of the following will result?

Accepted Answer

A) The quantity of labor demanded by firms will rise. 
B) The quantity of labor demanded by firms will fall. 
C) The unemployment rate will fall. 
D) Both A and C will occur. 
A) The quantity of labor demanded by firms will rise. 
B) The quantity of labor demanded by firms will fall. 
C) The unemployment rate will fall. 
D) Both A and C will occur.

Question 7

Which of the following would be the best measure of the cost of living?

Accepted Answer

A) real GDP 
B) real GDP per person 
C) GDP deflator 
D) consumer price index 
A) real GDP 
B) real GDP per person 
C) GDP deflator 
D) consumer price index

Question 8

Most economists believe that the biases in the consumer price index cause the CPI to overstate the true inflation rate by about

Accepted Answer

A) one-half to one percentage point. 
B) one to two percentage points. 
C) one quarter percentage point. 
D) one and one-half percentage points. 
A) one-half to one percentage point. 
B) one to two percentage points. 
C) one quarter percentage point. 
D) one and one-half percentage points.

Question 9

What does the PPI measure?

Accepted Answer

A) the average change in the prices paid for all goods produced in the economy over a given year 
B) the average of the prices received by producers of goods and services at all stages of the production process 
C) the level of production of goods and services generated in the economy in a given year 
D) the difference between the prices consumers pay for goods and services and the prices producers pay for goods and services 
A) the average change in the prices paid for all goods produced in the economy over a given year 
B) the average of the prices received by producers of goods and services at all stages of the production process 
C) the level of production of goods and services generated in the economy in a given year 
D) the difference between the prices consumers pay for goods and services and the prices producers pay for goods and services

Question 10

Table 9-22
  
-Refer to Table 9-22.Using the above table,calculate real average hourly earnings for 2014,2015,and 2016.Calculate the rate of growth of real average hourly earnings from 2015 to 2016.

Accepted Answer

Real average hourly earnings in 2014 are

Question 11

The inflation rate measures the percentage increase in the price level from one year to the next.

Accepted Answer

A) True 
 B)False

Question 12

Suppose 180,000 people are employed,20,000 people are unemployed,and 50,000 people are out of the labor force.Calculate the labor force participation rate.

Accepted Answer

The labor force participation rate is ca

Question 13

Which of the following is not a cost posed by inflation?

Accepted Answer

A) Inflation reduces the affordability of goods and services to the average consumer. 
B) The money that consumers and firms hold loses its purchasing power. 
C) Firms must pay for changing prices on products and printing new catalogs. 
D) Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation. 
A) Inflation reduces the affordability of goods and services to the average consumer. 
B) The money that consumers and firms hold loses its purchasing power. 
C) Firms must pay for changing prices on products and printing new catalogs. 
D) Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation.

Question 14

The consumer price index implicitly assumes that the demand curve for each good and service in the representative market basket is

Accepted Answer

A) positively sloped. 
B) negatively sloped. 
C) vertical. 
D) horizontal. 
A) positively sloped. 
B) negatively sloped. 
C) vertical. 
D) horizontal.

Question 15

Jack lost his job six months ago,and he's been actively looking for a new job ever since.The Bureau of Labor Statistics would classify Jack as

Accepted Answer

A) unemployed. 
B) out of the labor force. 
C) a discouraged worker. 
D) all of the above. 
A) unemployed. 
B) out of the labor force. 
C) a discouraged worker. 
D) all of the above.

Question 16

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 17

Table 9-2
Base Year (2011)2016
  
-Refer to Table 9-2.Assume the market basket for the consumer price index has two products - bread and milk - with the following values in 2011 and 2016 for price and quantity: The Consumer Price Index for 2016 equals

Accepted Answer

A) 118. 
B) 116. 
C) 86. 
D) 85. 
A) 118. 
B) 116. 
C) 86. 
D) 85.

Question 18

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 19

Table 9-21
   Source: Energy Information Administration
-Refer to Table 9-21.The table above reports the consumer price index and the average U.S.retail price for unleaded regular gasoline for four different periods since 1976.Note that the gasoline prices are in cents per gallon.
Calculate the real average retail price of unleaded regular gasoline in 1982-1984 dollars.In which period were gasoline prices the highest in real terms? Also,calculate the real average retail price of unleaded regular gasoline in 2011 dollars.

Accepted Answer

Real gasoline price in 1982-1984 dollars

Question 20

Nominal income is equal to real income if the CPI is less than 100.

Accepted Answer

A) True 
 B)False

Full employment is not considered to be zero unemployment,because

There are no costs to inflation if it is fully anticipated.

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2016,then the value of your grandfather's salary in 2016 dollars is approximately

Table 9-1 Consider the data above for a simple economy. -Refer to Table 9-1.The unemployment rate for this simple economy equals

Figure 9-1 -Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage of $8 per hour is imposed,which of the following will result?

Which of the following would be the best measure of the cost of living?

Most economists believe that the biases in the consumer price index cause the CPI to overstate the true inflation rate by about

What does the PPI measure?

Table 9-22 -Refer to Table 9-22.Using the above table,calculate real average hourly earnings for 2014,2015,and 2016.Calculate the rate of growth of real average hourly earnings from 2015 to 2016.

The inflation rate measures the percentage increase in the price level from one year to the next.

Suppose 180,000 people are employed,20,000 people are unemployed,and 50,000 people are out of the labor force.Calculate the labor force participation rate.

Which of the following is not a cost posed by inflation?

The consumer price index implicitly assumes that the demand curve for each good and service in the representative market basket is

Jack lost his job six months ago,and he's been actively looking for a new job ever since.The Bureau of Labor Statistics would classify Jack as

An increase in cyclical unemployment will result in

Table 9-2 Base Year (2011)2016 -Refer to Table 9-2.Assume the market basket for the consumer price index has two products - bread and milk - with the following values in 2011 and 2016 for price and quantity: The Consumer Price Index for 2016 equals

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

Nominal income is equal to real income if the CPI is less than 100.

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

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

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Exam 9: Unemployment and Inflation

Full employment is not considered to be zero unemployment,because

There are no costs to inflation if it is fully anticipated.

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2016,then the value of your grandfather's salary in 2016 dollars is approximately

Table 9-1 Consider the data above for a simple economy. -Refer to Table 9-1.The unemployment rate for this simple economy equals

Figure 9-1 -Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage of $8 per hour is imposed,which of the following will result?

Which of the following would be the best measure of the cost of living?

Most economists believe that the biases in the consumer price index cause the CPI to overstate the true inflation rate by about

What does the PPI measure?

Table 9-22 -Refer to Table 9-22.Using the above table,calculate real average hourly earnings for 2014,2015,and 2016.Calculate the rate of growth of real average hourly earnings from 2015 to 2016.

The inflation rate measures the percentage increase in the price level from one year to the next.

Suppose 180,000 people are employed,20,000 people are unemployed,and 50,000 people are out of the labor force.Calculate the labor force participation rate.

Which of the following is not a cost posed by inflation?

The consumer price index implicitly assumes that the demand curve for each good and service in the representative market basket is

Jack lost his job six months ago,and he's been actively looking for a new job ever since.The Bureau of Labor Statistics would classify Jack as

An increase in cyclical unemployment will result in

Table 9-2 Base Year (2011)2016 -Refer to Table 9-2.Assume the market basket for the consumer price index has two products - bread and milk - with the following values in 2011 and 2016 for price and quantity: The Consumer Price Index for 2016 equals

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

Nominal income is equal to real income if the CPI is less than 100.

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

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