Question 1

An increase in the price level is defined as

Accepted Answer

A)  a recession. 
B)  a growth boom. 
C)  inflation. 
D)  an expansion.

Question 2

Which of the following most likely would decrease frictional unemployment?

Accepted Answer

A)  an increase in the number of high school and college graduates 
B)  effective Internet-based employment services and job registries 
C)  an expansion of unemployment compensation benefits 
D)  All of the above would decrease frictional unemployment.

Question 3

Suppose the country of Tiny Town decided to open its borders to free trade. As a result, a number of its workers lost their jobs to international competition and can't find new jobs because their skills don't match what is required for job openings. The workers who lost their jobs and searched for new ones are best be considered part of

Accepted Answer

A)  frictional unemployment. 
B)  structural unemployment 
C)  cyclical unemployment. 
D)  discouraged workers.

Question 4

In a country with a working-age population of 100 million, 70 million workers are employed and 5 million workers are unemployed. What is the labor force participation rate?

Accepted Answer

A)  70 percent 
B)  5 percent 
C)  75 percent 
D)  7 percent

Question 5

-In the above table, the employment-to-population ratio is

Accepted Answer

A)  51 percent. 
B)  42 percent. 
C)  62 percent. 
D)  44 percent.

Question 6

Frictional unemployment

Accepted Answer

A)  includes discouraged workers. 
B)  is voluntary part-time unemployment. 
C)  is unemployment associated normal labor turnover. 
D)  is unemployment associated with declining industries.

Question 7

Based on the following data for the country of Tiny Town, the employment-to-population ratio equals ________ multiplied by 100.
Population = 200
Working age population = 100
Labor Force = 90
Number of employed persons = 75

Accepted Answer

A)  90/100. 
B)  75/200 
C)  90/200. 
D)  75/100.

Question 8

Full employment occurs

Accepted Answer

A)  only if the unemployment rate is zero. 
B)  only if the unemployment rate is equal to the natural unemployment rate. 
C)  only if unemployment is equal to structural unemployment plus cyclical unemployment. 
D)  None of the above answers are correct.

Question 9

-The labor force participation rate is the ratio of

Accepted Answer

A)  (the labor force divided by the working-age population) multiplied by 100. 
B)  (the number of unemployed divided by the working-age population) multiplied by 100. 
C)  (the labor force divided by the total population) multiplied by 100. 
D)  (the number of unemployed divided by the labor force) multiplied by 100.

Question 10

If the people who take early retirement are not counted in the working-age population, then

Accepted Answer

A)  the unemployment rate would be lower. 
B)  the labor force participation rate would be less. 
C)  the unemployment rate would be higher. 
D)  the labor force participation rate would be higher.

Question 11

The table below shows data regarding Germany's labor market.

The data show that Germany's labor force participation rate is ________ in 2007.

Accepted Answer

A)  80 percent 
B)  47.5 percent 
C)  67 percent 
D)  78 percent

Question 12

The biases in the CPI include the

Accepted Answer

A)  old goods, unemployment, and inflation biases. 
B)  new goods, quality change, and substitution biases. 
C)  old goods, new goods, and quality change biases. 
D)  substitution, new goods, and old goods biases.

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

As currently calculated, the CPI tends to overstate the true inflation rate because

Accepted Answer

A)  we cannot know what the true inflation rate is. 
B)  it fails to correctly measure quality changes for some products. 
C)  the market basket selected is inappropriate. 
D)  the market basket fails to weigh housing costs sufficiently.

Question 15

The unemployment rate is defined as the

Accepted Answer

A)  number of people not working. 
B)  percentage of the population not working. 
C)  percentage of the labor force not working. 
D)  percentage of the working-age population not working.

Question 16

The unemployment rate measures the percentage of people in the labor force who can't find a job.

Accepted Answer

A) True 
 B)False

Question 17

In a country with a working-age population of 150 million, 120 million workers are employed and 10 million workers are unemployed. What is the size of the labor force?

Accepted Answer

A)  150 million 
B)  130 million 
C)  120 million 
D)  10 million

Question 18

List and define the three types of unemployment.

Accepted Answer

The answer of List and define the three types of...

Question 19

If the CPI this year is 175.2 and next year the CPI is 176.1, what was the inflation rate over the year?

Accepted Answer

The answer of If the CPI this year is 175.2...

Question 20

A person quits her job in order to spend time looking for a better-paying job. This type of unemployment is an example of

Accepted Answer

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

Exam 5: Monitoring Jobs and Inflation