question
_______ is the percentage of the working-age population in the labor force
answer
The labor force participation rate
question
As of August 2015, which of the following demographic groups has the highest unemployment rate?
answer
African Americans
question
Why is the unemployment rate, as measured by the Bureau of Labor Statistics, an imperfect measure of the extent of joblessness in the economy?
answer
All of the above
(-It does not account of inaccurate responses to the Current Population Survey
-Underemployed people are considered employed
-It fails to account for illegal activities
-Discouraged workers are not considered unemployed)
(-It does not account of inaccurate responses to the Current Population Survey
-Underemployed people are considered employed
-It fails to account for illegal activities
-Discouraged workers are not considered unemployed)
question
Which of the following formulas does the Bureau of Labor Statistics use to calculate the unemployment rate?
answer
(# of unemployed/ # in labor force) x 100
question
The unemployment rate
answer
shows the percentage of the labor force that is considered unemployed
question
How would it affect the unemployment rate if the Bureau of Labor Statistics counted as unemployed both (1) discouraged workers and (2) people who work part-time but would prefer to work full-time?
answer
The unemployment rate would increase
question
The Bureau of Labor Statistics would categorize a retiree who is not working as
answer
out of the labor force
question
The labor force equals the number of people
answer
employed plus unemployed
question
Total Population -20,000
Working−Age Population - 15,000
Employment - 1,000
Unemployment - 100
Consider the data in the table above for a simple economy. The unemployment rate for this simple economy equals
Working−Age Population - 15,000
Employment - 1,000
Unemployment - 100
Consider the data in the table above for a simple economy. The unemployment rate for this simple economy equals
answer
(100/1100) x 100
question
Unemployment arising from a persistent mismatch between the skills and characteristics of workers and the requirements of jobs is called
answer
structural unemployment
question
Workers who lose their jobs because of a recession are experiencing
answer
cyclical unemployment
question
When the economy is at full employment, which types of unemployment remain?
answer
frictional and structural
question
The "normal" underlying level of unemployment in the economy is
answer
All of the above
(-the full employment rate of unemployment
-the sum of structural unemployment and frictional unemployment
-the natural rate of unemployment)
(-the full employment rate of unemployment
-the sum of structural unemployment and frictional unemployment
-the natural rate of unemployment)
question
What index is used to measure the average prices paid by a typical family?
An average of the prices of the goods and services purchased by a typical family is the:
An average of the prices of the goods and services purchased by a typical family is the:
answer
consumer price index (CPI)
question
The BLS surveys 30,000 households on their spending habits. The results are used to construct a market basket of goods and services purchased by the typical urban family of four. The chart on the right shows these goods and services grouped into eight broad categories for December
20142014.
The percentages represent the expenditure shares of the categories within the market basket.
Which of the following categories make up about three-quarters of the market basket?
20142014.
The percentages represent the expenditure shares of the categories within the market basket.
Which of the following categories make up about three-quarters of the market basket?
answer
housing, transportation, and food
question
During which period did the country experience zero inflation?
During which period did the country experience an increasing rate of inflation?
During which period did the country experience a slow down in inflation, although the inflation rate remained positive? (This situation is called "disinflation.")
During which period did the country experience an increasing rate of inflation?
During which period did the country experience a slow down in inflation, although the inflation rate remained positive? (This situation is called "disinflation.")
answer
2000 to 2005.
1990 to 1995.
1995 to 2000.
2005 to 2010.
1990 to 1995.
1995 to 2000.
2005 to 2010.
question
Which of the following price indices comes closest to measuring the cost of living of the typical household?
answer
consumer price index
question
Assume the market basket for the consumer price index has two products, bread and milk, with the following values in 2011 and 2016 for price and quantity:
The Consumer Price Index for 2016 equals
The Consumer Price Index for 2016 equals
answer
116
question
Assume the market basket for the consumer price index has three products, Cokes, hamburgers, and CDs, with the following values in 2011 and 2016 for price and quantity
The Consumer Price Index for 2016 equals
The Consumer Price Index for 2016 equals
answer
121
question
Assume the average annual CPI values for 2015 and 2016 were 207.3 and 215.3, respectively. What was the percent increase in the CPI between these two years?
answer
3.86
question
Consider the following values of the consumer price index for 2015 and 2016
The inflation rate for 2016 was equal to
The inflation rate for 2016 was equal to
answer
3.9 percent
question
Your grandfather tells you that he earned $7,000/year in his first job in 1961. You earn 35,000/year in your first job in 2016. You know that average prices have risen steadily since 1961.
answer
less than 5 times as much as your grandfather in terms of real income
question
The broadest measure of the price level that includes all final goods and services is
answer
the GDP deflator
question
The most widely used measure of inflation is based on which of the following price indices?
answer
the consumer price index
question
Monthly expenditures for a family of 4 in 2015 averaged $1,400. In 2016, the cost of the same purchases was $1,500. If 2015 is the base year, what was the CPI in 2016?
answer
107
question
If a 3-month Treasury bill pays 5.5% and the change in the consumer price index (CPI) is 4.7%, what is the real interest rate (the true return to lending)?
answer
0.8%
question
The real interest rate
answer
is equal to the nominal interest rate minus the inflation rate
question
The nominal interest rate equal the real interest rate ___________ the inflation rate.
answer
plus
question
The stated interest rate on a loan is the
answer
nominal interest rate
question
If the nominal rate of interest is 6.5% and the inflation rate is 3.0%, what is the real rate of interest?
answer
3.5%
question
Imagine that you borrow $5,000 for one year and at the end of the year you repay the $5,000 plus $600 of interest. If the inflation rate was 4%, what was the real interest rate you paid?
answer
8 percent
question
If the nominal interest rate is 6% and the inflation rate is 9%, then the real interest rate is
answer
-3%
question
Suppose that the economy enters into a recession and that, as a result, Rusty Z. Wrench loses his job as a delivery truck mechanic and remains unemployed. When the economy recovers, Rusty's previous employer rehires him. What is the best classification for his time as an unemployed truck mechanic?
answer
Cyclical Unemployment
question
When the economy is at full employment,
answer
All of the above
(-all remaining unemployment is either frictional or structural
-the natural rate of unemployment prevails
-the unemployment rate is greater than zero)
(-all remaining unemployment is either frictional or structural
-the natural rate of unemployment prevails
-the unemployment rate is greater than zero)
question
Which of the following can give an early warning of future increases in the price level?
answer
Producer price index (PPI)
question
Which of the following would be the best measure of the cost of living?
answer
consumer price index
question
The CPI is also referred to as
answer
the cost of living index
question
Suppose an economy has only three goods and the typical family purchases the amounts given in the table above. If 2011 is the base year, then what is the CPI for 2016?
answer
87.5
question
Suppose an economy has only three goods and the typical family purchases the amounts given in the table above. If 2011 is the base year, then what is the CPI for 2016?
answer
208
question
Imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest. If the inflation rate was 7%, what was the real interest rate you paid?
answer
3 percent
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