Question 1

The primary factor leading to cyclical unemployment is when

Accepted Answer

A)  businesses often discriminate in their hiring practices on the basis of age, sex, and race. 
B)  the level of overall economic activity fluctuates. 
C)  workers quit their jobs in order to look for higher paying employment. 
D)  some workers do not have marketable job skills.

Question 2

The labor force is defined as people

Accepted Answer

A)  who have a job or are looking for a job. 
B)  in the working-age population who have a job. 
C)  in the working-age population who have a full time job. 
D)  who are 16 years of age or older.

Question 3

Which of the following pieces of information do you need to calculate the labor force participation rate?
I.the number of employed persons
II.the number of unemployed persons
III.the population
IV.the working age population

Accepted Answer

A)  I and II 
B)  I and III 
C)  I, II and III 
D)  I, II and IV

Question 4

The unemployment rate measures the percentage of

Accepted Answer

A)  people who want full-time jobs, but can't find them. 
B)  the working-age population who can't find a job. 
C)  people in the labor force who can't find a job. 
D)  the working age population that can't find a full-time job.

Question 5

If this year the price level is 135 and last year it was 125, the inflation rate is

Accepted Answer

A)  8 percent. 
B)  10 percent. 
C)  12 percent. 
D)  none of the above.

Question 6

When a worker quits a job to look for a better job

Accepted Answer

A)  structural and cyclical unemployment increase. 
B)  structural unemployment decreases. 
C)  cyclical unemployment increases. 
D)  frictional unemployment increases.

Question 7

2012 2013
 
-In 2012, consumers in Dexter consumed only books and pens. The prices and quantities for 2012 and 2013 are listed in the table above. The reference base period for Dexter's CPI is 2012. What is the cost of the CPI basket in 2012?

Accepted Answer

A)  $430 
B)  $335 
C)  $320 
D)  $540

Question 8

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

Accepted Answer

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

Question 9

Explain how the labor force participation rate and the unemployment rate change in a recession.

Accepted Answer

The answer of Explain how the labor force participation rate...

Question 10

When an individual is frictionally unemployed, the unemployment arises in part from

Accepted Answer

A)  a short-term elimination of jobs because of a slowdown in business activity. 
B)  individuals searching for appropriate employment. 
C)  the permanent elimination of jobs because of a change in the structure of the economy. 
D)  a reduction in the overall demand for workers' skills.

Question 11

The unemployment rate equals

Accepted Answer

A)  the total number of people without jobs in a given period. 
B)  the percentage of the population not currently employed. 
C)  the rate of change in unemployment figures from one period to another. 
D)  the percentage of the labor force currently unemployed.

Question 12

Explain what type of unemployment changes with the business cycle and how it changes.

Accepted Answer

The answer of Explain what type of unemployment changes with...

Question 13

Andrew just lost his job as a corkscrew operator since his company has found a machine to perform his work tasks. Andrew did not have the skills needed to operate the machine. Andrew has searched for a new job for 6 months and continues to search. Therefore, Andrew is considered to be

Accepted Answer

A)  frictionally unemployed. 
B)  a discouraged worker. 
C)  cyclically unemployed. 
D)  structurally unemployed.

Question 14

To prevent frictional unemployment, we would have to

Accepted Answer

A)  eliminate recessions. 
B)  eliminate the business cycle. 
C)  prevent people from leaving their jobs. 
D)  make sure everyone goes to college.

Question 15

The working-age population can be divided into two groups

Accepted Answer

A)  people in the labor force and people looking for work. 
B)  people in the labor force and people with a job. 
C)  people looking for work and those in the armed forces. 
D)  people in the labor force and people who are not in the labor force.

Question 16

If the economy enters a recession

Accepted Answer

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

Question 17

Price indexes can overstate inflation because they

Accepted Answer

A)  omit some quality improvements. 
B)  do not contain the prices of any used goods. 
C)  do not contain the prices of foreign goods. 
D)  do not contain the prices of services.

Question 18

Assume that after you graduate, you move to a simple economy in which only three goods are produced and consumed: fish, fruit, and meat. Suppose that on January 1, fish sold for $2.50 per pound, meat was $3.00 per pound, and fruit was $1.50 per pound. At the end of the year, you discover that the catch was low and that fish prices had increased to $5.00 per pound, but fruit prices stayed at $1.50 per pound, and meat prices had actually fallen to $2.00. Can you say what happened to the overall CPI, in terms of whether it increased, decreased, or stayed the same? Do you have enough information to calculate the inflation rate? Note, this problem requires no calculation; just state and explain your answers.

Accepted Answer

The answer of Assume that after you graduate, you move...

Question 19

When an individual who has not been working but has been looking for work decides to terminate the search process, the official unemployment rate

Accepted Answer

A)  will fall. 
B)  will rise. 
C)  will remain unchanged. 
D)  may fall or rise depending on whether or not the individual resumes his education.

Question 20

In September 2014, 32 percent of unemployed workers had been unemployed for 6 months or more. This long-term unemployment is of particular concern because

Accepted Answer

A)  long-term unemployment is the most costly type of unemployment. 
B)  the U-3 unemployment rate no longer includes these workers in the measurement since they are long-term unemployed. 
C)  the employment-to-population ratio no longer includes these workers in the measurement since they are long-term unemployed. 
D)  the labor force participation rate no longer includes these workers in the measurement since they are long-term unemployed.

Exam 5: Monitoring Jobs and Inflation