Question 1

\[\begin{array} { | c | l | } 
\hline \text { Person A } & \begin{array} { l } 
\text { This person has just graduated from high school and is } \
\text { working at a part-time job but wants a full-time job. }
\end{array} \
\hline \text { Person B } & \begin{array} { l } 
\text { At the age of 45, this person was laid off from the } \
\text { automobile industry when new equipment wasinstalled } \
\text { and the person did not have the skills necessary to use } \
\text { the equipment. This person now is searching to find a } \
\text { new job. }
\end{array} \
\hline \text { Person C } & \begin{array} { l } 
\text { As a result of this person's spouse being transferred to a } \
\text { job in a new city, this person is looking for a new job. }
\end{array} \
\hline \text { Person D } & \begin{array} { l } 
\text { This person just graduated from college and is looking } \
\text { for an engineering job. In the meantime, this person is } \
\text { working full-time waiting tables. }
\end{array} \
\hline
\end{array}\]
-The above table shows answers given by people interviewed in the Current Population Survey. Which people are structurally unemployed?

Accepted Answer

A)  A, B, and D 
B)  A, B, and C 
C)  B and C. 
D)  A, B, C, and D

Question 2

The first step in measuring the CPI is to

Accepted Answer

A)  select the market basket. 
B)  interview businesses. 
C)  collect prices for the basket of goods and services. 
D)  conduct a monthly survey.

Question 3

The________ is the total number of people aged 16 years and older and not in jail, hospital or institutional care) while the________ is the number of people employed and the unemployed.

Accepted Answer

A)  labor force; working-age population 
B)  working-age population; labor force participation rate 
C)  labor force participation rate; labor force 
D)  working-age population; labor force

Question 4

If the population is 300 million, with 70 million under the age of 16 and institutionalized, another 70 million not in the labor force, 10 million unemployed, and 150 million employed, the employment-to-population rate is

Accepted Answer

A)  53.3 percent. 
B)  65.2 percent. 
C)  87.5 percent. 
D)  46.7 percent.

Question 5

The CPI is the average price of all goods and services produced within the economy.

Accepted Answer

A) True 
 B)False

Question 6

Inflation in Vietnam rose to 27 percent in July 2008- the highest inflation rate in Asia. ʺSqueezed on all sides, people are cutting back on food, limiting travel, looking for second jobs, delaying major purchases and waiting for the cost of a wedding to go down before marrying...Given this slowdown, Vietnam... is scaling back its plans for growth and economic development. Some are
Losing confidence in the ability of the government to manage the economy. And rumors of price increases have caused panic buying of fuel and rice.ʺ
The story provides an example of how inflation

Accepted Answer

A)  redistributes income. 
B)  leads to increases in the consumer price index. 
C)  can lead to changes in the CPI market basket. 
D)  diverts resources from production.

Question 7

If a worker is temporarily laid off because the economy is in a recession, frictional unemployment increases.

Accepted Answer

A) True 
 B)False

Question 8

The unemployment rate is the________ who are unemployed.

Accepted Answer

A)  number of people in the labor force 
B)  percentage of the working-age population 
C)  percentage of people in the country 
D)  percentage of people in the labor force

Question 9

The three types of unemployment are

Accepted Answer

A)  frictional, structural, and cyclical. 
B)  frictional, part-time, and involuntary. 
C)  voluntary, involuntary, and structural. 
D)  voluntary, part-time, and cyclical.

Question 10

If the economy is at full employment,

Accepted Answer

A)  the only unemployment is frictional unemployment plus discouraged workers. 
B)  the entire population is employed. 
C)  the entire labor force is employed. 
D)  real GDP equals potential GDP.

Question 11

The unemployment rate measures the percentage of

Accepted Answer

A)  the working age population that canʹt find a full -time job. 
B)  people who want full-time jobs, but canʹt find them. 
C)  people in the labor force who canʹt find a job. 
D)  the working-age population who canʹt find a job.

Question 12

Which labor market statistic tends rise during recessions and fall during expansions?

Accepted Answer

A)  the employment-to-population ratio 
B)  the unemployment rate 
C)  the labor-force participation rate 
D)  aggregate hours

Question 13

What, if any, is the impact of the CPI bias on government spending?

Accepted Answer

The answer of What, if any, is the impact of...

Question 14

What is a ʺmarginally attached workerʺ?

Accepted Answer

The answer of What is a ʺmarginally attached workerʺ?...

Question 15

The natural unemployment rate

Accepted Answer

A)  is attained whenever the unemployment rate is less than 5 percent because 95 percent employment is considered full employment. 
B)  has been estimated to range between 4 percent and 6 percent in the United States in recent years. 
C)  estimated to be close to 9 percent in recent years in the United States. 
D)  occurs when 100 percent of the labor force is employed.

Question 16

If the economy enters a recession,

Accepted Answer

A)  frictional unemployment increases. 
B)  structural unemployment decreases. 
C)  the number of workers on layoff decreases. 
D)  cyclical unemployment increases.

Question 17

$\begin{array}{|l|l|}
\hline \text { Category } & \begin{array}{l}
\text { Number } \
\text { (millions) }
\end{array} \\hline \text { Discouraged workers } & 15 \
\hline \text { Unemployed workers } & 40 \
\hline \text { Employed workers } & 100 \
\hline \text { Population (16 years and over) } & 225 \
\hline
\end{array}$
-In the above table, the number of marginally attached workers is

Accepted Answer

A)  40 million. 
B)  15 million. 
C)  100 million. 
D)  55 million.

Question 18

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

Question 19

The currently used method for calculating the CPI

Accepted Answer

A)  has no effect on government expenditures. 
B)  accounts for people increasing consumption of a good that falls in relative price. 
C)  probably overstates inflation by about 1 percentage point. 
D)  None of the above answers are correct.

Question 20

Suppose the price level this year is 150 and the price level last year was 125. The inflation rate between last year and this year was

Accepted Answer

A)  20 percent. 
B)  16.6 percent. 
C)  1.6 percent. 
D)  2 percent.

Exam 5: Monitoring Jobs and Inflation