Question 1

Suppose the CPI last year is 121 and the CPI this year is 137. The correct method to calculate the inflation rate is

Accepted Answer

A)   137 × 121 = 258.
B)   (137 - 121) /100 = 0.16.
C)   (137/121)  × 100 = 113.2.
D)   [(137 - 121) /121] × 100 = 13.2.E) A) and B)
F) A) and C)

Question 2

Explain the difference between frictional and structural unemployment.

Accepted Answer

Frictional unemployment is more short te...

Question 3

Inflation is a problem when

Accepted Answer

A)   it causes resources to be diverted from productive uses.
B)   it is unpredictable.
C)   it causes the value of money to vary unpredictably.
D)   All of the above answers are correct.E) A) and C)
F) All of the above

Question 4

Suppose the population is 220 million people, the labor force is 150 million people, the number of people employed is 130 million and the working- age population is 175 million people. What is the unemployment rate?

Accepted Answer

The unemployment rat...

Question 5

Students who leave school in the spring and look for work are one source of .

Accepted Answer

A)   cyclical unemployment
B)   structural unemployment
C)   business- cycle fluctuation
D)   frictional unemploymentE) None of the above
F) All of the above

Question 6

-The above table shows answers given by people interviewed in a government survey of households. Which person is a discouraged worker?

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) A) and B)
F) None of the above

Question 7

An individual is structurally unemployed if

Accepted Answer

A)   there is a recession and the individual is laid off.
B)   the individual quits a job in order to search for a better one.
C)   the individual wants to work just during certain months of the year.
D)   the individual lacks marketable job skills because technology has changed.E) A) and D)
F) B) and C)

Question 8

The natural unemployment rate

Accepted Answer

A)   is the unemployment rate when there is no structural unemployment.
B)   is the unemployment rate when there is only cyclical unemployment.
C)   is the unemployment rate at full employment.
D)   occurs when the unemployment rate is 0 percent.E) All of the above
F) C) and D)

Question 9

When a woman reenters the labor force and looks for a job after spending time at home raising a child,

Accepted Answer

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

Question 10

-The CPI basket contains 400 oranges and 800 pens. In the base year, the price of an orange is $1.00 and the price of a pen is $0.75. This year, urban consumers each buy 300 oranges at $2.00 each and 850 pens at $1.00 each. The CPI this year is .

Accepted Answer

A)   62.5
B)   160
C)   1.60
D)   140E) A) and C)
F) A) and B)

Question 11

-Using the data in the above table, the labor force is

Accepted Answer

A)   135 million.
B)   140 million.
C)   137.5 million.
D)   142.5 million.E) A) and D)
F) B) and C)

Question 12

Suppose the economy is experiencing frictional unemployment of 1 percent, structural unemployment of 3 percent and cyclical unemployment of 4 percent. What is the natural unemployment rate?

Accepted Answer

A)   5 percent.
B)   7 percent.
C)   3 percent.
D)   4 percent.E) A) and B)
F) A) and C)

Question 13

How is the unemployment rate calculated? Include in your answer the process by which the U.S. Census Bureau classifies the data it collects in its Current Population Survey.

Accepted Answer

The U.S. Census Bureau conducts the Curr...

Question 14

Suppose that the number of jobs in the fishing industry decreases but the number of jobs in the travel industry increases. Initially, .

Accepted Answer

A)   the economy remains at full employment
B)   there is a shortage of workers in both sectors
C)   cyclical unemployment increases
D)   structural unemployment increasesE) A) and B)
F) B) and D)

Question 15

Suppose the natural unemployment rate equals 6 percent and the current unemployment rate is 8 percent. We can conclude that

Accepted Answer

A)   there is no cyclical unemployment.
B)   full employment is not occurring.
C)   there is no frictional unemployment.
D)   there is no structural unemployment.E) A) and C)
F) None of the above

Question 16

-In the above table, the labor force participation rate is

Accepted Answer

A)   55 percent.
B)   62 percent.
C)   69 percent.
D)   44 percent.E) None of the above
F) A) and B)

Question 17

Unpredictable changes in the value of money, which brings about gains and losses, are a consequence of unpredictable changes in

Accepted Answer

A)   productivity.
B)   real GDP.
C)   unemployment rate.
D)   inflation.E) B) and C)
F) A) and B)

Question 18

-In the table above, the unemployment rate is

Accepted Answer

A)   10 percent.
B)   5 percent.
C)   15 percent.
D)   50 percent.E) C) and D)
F) B) and C)

Question 19

The natural unemployment rate .

Accepted Answer

A)   is the unemployment rate when there is no cyclical unemployment
B)   is greater than the actual rate of unemployment
C)   is the same from year to year
D)   equals zeroE) A) and D)
F) A) and C)

Question 20

Mike has just been laid off from his construction job because consumers are not purchasing new homes because of the recession. Mike would be considered to be part of

Accepted Answer

A)   seasonal unemployment.
B)   frictional unemployment.
C)   structural unemployment.
D)   cyclical unemployment.E) A) and C)
F) None of the above

Exam 5: Monitoring Jobs and Inflation

-The CPI basket contains 400 oranges and 800 pens. In the base year, the price of an orange is $1.00 and the price of a pen is $0.75. This year, urban consumers each buy 300 oranges at $2.00 each and 850 pens at $1.00 each. The CPI this year is .

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Suppose the economy is experiencing frictional unemployment of 1 percent, structural unemployment of 3 percent and cyclical unemployment of 4 percent. What is the natural unemployment rate?

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-In the table above, the unemployment rate is

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-In the above table, the labor force participation rate is

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Inflation is a problem when

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The natural unemployment rate

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Explain the difference between frictional and structural unemployment.

Correct AnswerverifiedFrictional unemployment is more short te...View AnswerShow Answer

Suppose that the number of jobs in the fishing industry decreases but the number of jobs in the travel industry increases. Initially, .

Correct AnswerverifiedShow Answer

Suppose the natural unemployment rate equals 6 percent and the current unemployment rate is 8 percent. We can conclude that

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-The above table shows answers given by people interviewed in a government survey of households. Which person is a discouraged worker?

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-Using the data in the above table, the labor force is

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The natural unemployment rate .

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Suppose the CPI last year is 121 and the CPI this year is 137. The correct method to calculate the inflation rate is

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An individual is structurally unemployed if

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When a woman reenters the labor force and looks for a job after spending time at home raising a child,

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Students who leave school in the spring and look for work are one source of .

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Suppose the population is 220 million people, the labor force is 150 million people, the number of people employed is 130 million and the working- age population is 175 million people. What is the unemployment rate?

Correct AnswerverifiedThe unemployment rat...View AnswerShow Answer

Unpredictable changes in the value of money, which brings about gains and losses, are a consequence of unpredictable changes in

Correct AnswerverifiedShow Answer

How is the unemployment rate calculated? Include in your answer the process by which the U.S. Census Bureau classifies the data it collects in its Current Population Survey.

Correct AnswerverifiedThe U.S. Census Bureau conducts the Curr...View AnswerShow Answer

Mike has just been laid off from his construction job because consumers are not purchasing new homes because of the recession. Mike would be considered to be part of

Correct AnswerverifiedShow Answer

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Frictional unemployment is more short te...
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The unemployment rat...
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The U.S. Census Bureau conducts the Curr...
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