Question 1

The labor force is defined as the

Accepted Answer

A)   number of people over 16 years of age.
B)   number of people who are working.
C)   number of people in blue- collar jobs.
D)   sum of employed and unemployed people.

Question 2

The nation's structural unemployment will increase when

Accepted Answer

A)   there is an increase in post- Christmas layoffs of workers.
B)   an increase in textile imports displaces older textile workers who do not have the skills necessary to find new jobs.
C)   there is influx into the labor market of new college graduates.
D)   bad economic policies send the economy into a recession.

Question 3

In an economy, 43 million people are employed, 3 million are unemployed, and 4 million are not in the labor force. What is the employment- to- population ratio?

Accepted Answer

A)   86 percent
B)   93 percent
C)   6.5 percent
D)   92 percent

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

-In 2008, consumers in Dexter consumed only books and pens. The prices and quantities for 2008 and 2009 are listed in the table above. The reference base period for Dexter's CPI is 2008. What is the CPI in 2009?

Accepted Answer

A)   59
B)   102
C)   129
D)   169

Question 6

If the economy enters an expansion,

Accepted Answer

A)   cyclical unemployment decreases.
B)   structural unemployment increases.
C)   structural unemployment decreases.
D)   cyclical unemployment increases.

Question 7

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 8

Ms. Krupsky has shorthand and typing skills and still finds herself unemployed. In today's economy, Ms. Krupsky is an example of what type of unemployment?

Accepted Answer

A)   cyclical unemployment
B)   structural unemployment
C)   frictional unemployment
D)   None of the above answers is correct.

Question 9

Most unemployed people are unemployed because they are

Accepted Answer

A)   new entrants into the labor force.
B)   job leavers.
C)   job losers.
D)   reentrants into the labor force.

Question 10

"The new goods bias puts a downward bias into the CPI and its measure of the inflation rate." Is the previous sentence correct or not? Explain your answer.

Accepted Answer

The sentence is false because the new go...

Question 11

The unemployment rate is at the natural unemployment rate when

Accepted Answer

A)   frictional unemployment equals zero.
B)   cyclical unemployment equals zero.
C)   structural unemployment equals zero.
D)   all types of unemployment equal zero.

Question 12

Which of the following is TRUE regarding the labor force participation rate?
I. The labor force participation rate has risen since 1961.
II. Adding the labor force participation rate plus the unemployment rate equals the employment- to- population ratio.

Accepted Answer

A)   I only
B)   II only
C)   both I and II
D)   neither I nor II

Question 13

Auto and steel workers commonly experience this type of unemployment in a recession.

Accepted Answer

A)   structural unemployment
B)   frictional unemployment
C)   cyclical unemployment
D)   natural unemployment rate

Question 14

The table below shows data regarding Germany's labor market.  The data show that Germany's unemployment rate in 2007 was

Accepted Answer

A)   More information is needed to answer this question.
B)   9.8 percent.
C)   5.6 percent
D)   8.4 percent

Question 15

If the base year CPI basket costs $250 and next year the CPI basket costs $275, what is next year's CPI?

Accepted Answer

The CPI eq...

Question 16

The best example of a cyclically unemployed individual is

Accepted Answer

A)   Bob who has just graduated from college and is entering the labor market.
B)   Alice who quit her job to enter college.
C)   Mary who lost her job in the textile industry following a decrease in the tariff on textiles.
D)   Charles who lost his job as a real estate salesperson when the housing market went soft because of a recession.

Question 17

If the CPI was 121.5 at the end of last year and 138.3 at the end of this year, the inflation rate over these two years was

Accepted Answer

A)   10.2 percent.
B)   12.2 percent.
C)   16.8 percent.
D)   13.8 percent.

Question 18

Structural unemployment is

Accepted Answer

A)   associated with changes in technology that change required job skills.
B)   associated with general downturns in the economy.
C)   associated with the changing of jobs in a dynamic economy.
D)   very short- term unemployment.

Question 19

When a student finishes college and begins looking for work,

Accepted Answer

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

Question 20

The bias in the CPI typically

Accepted Answer

A)   cannot be measured or estimated.
B)   overstates inflation.
C)   understates inflation.
D)   about half the time overstates and about half the time understates the inflation rate.

Exam 5: Monitoring Jobs and Inflation

The bias in the CPI typically

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The best example of a cyclically unemployed individual is

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Auto and steel workers commonly experience this type of unemployment in a recession.

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When a student finishes college and begins looking for work,

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The nation's structural unemployment will increase when

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The labor force is defined as the

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Structural unemployment is

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The unemployment rate is at the natural unemployment rate when

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Which of the following is TRUE regarding the labor force participation rate? I. The labor force participation rate has risen since 1961. II. Adding the labor force participation rate plus the unemployment rate equals the employment- to- population ratio.

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The table below shows data regarding Germany's labor market. The data show that Germany's unemployment rate in 2007 was

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In an economy, 43 million people are employed, 3 million are unemployed, and 4 million are not in the labor force. What is the employment- to- population ratio?

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-In 2008, consumers in Dexter consumed only books and pens. The prices and quantities for 2008 and 2009 are listed in the table above. The reference base period for Dexter's CPI is 2008. What is the CPI in 2009?

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Ms. Krupsky has shorthand and typing skills and still finds herself unemployed. In today's economy, Ms. Krupsky is an example of what type of unemployment?

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

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If the economy enters an expansion,

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

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"The new goods bias puts a downward bias into the CPI and its measure of the inflation rate." Is the previous sentence correct or not? Explain your answer.

Correct AnswerverifiedThe sentence is false because the new go...View AnswerShow Answer

Most unemployed people are unemployed because they are

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If the base year CPI basket costs $250 and next year the CPI basket costs $275, what is next year's CPI?

Correct AnswerverifiedThe CPI eq...View AnswerShow Answer

If the CPI was 121.5 at the end of last year and 138.3 at the end of this year, the inflation rate over these two years was

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The sentence is false because the new go...
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The CPI eq...
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