Deck 6: Macroeconomic Measurements, part I: Prices and Unemployment

Question 1

In order to be classified as unemployed,a person must be not working,

A)have been actively looking for work within the past four weeks,and currently be available for work.
B)and currently be available for work,regardless of whether one is actively looking for work or not.
C)and be waiting to be called back to work from a temporary layoff.
D)and actively looking for work within the past year.
E)​a or c

Answer 1

E

Question 2

If the CPI is 100 in the base year and 108 in the current year,how much did prices rise between the base year and the current year?

A)8 percent
B)108 percent
C)1.08 percent
D)0.08 percent
E)​80 percent

Answer 2

A

Question 3

In year 1 the CPI is 181,and in year 2 the CPI is 195.If Dennis's salary was $95,000 in year 1,what is the minimum salary he must earn in year 2 to "keep up with inflation"?

A)$112,500
B)$102,348
C)$105,750
D)$88,180

Answer 3

B

Question 4

The civilian non-institutional population can be broken down into two groups:

A)employed persons and unemployed persons.
B)persons working and persons not working.
C)persons working in service jobs and persons working in manufacturing jobs.
D)persons not in the labor force and persons in the labor force.

Question 5

In year 1 the CPI is 140,and in year 2 the CPI is 160.From year 1 to year 2,Chiang's salary rises from $42,000 to $49,000,and Marta's salary rises from $55,000 to $60,000.Who is "more than keeping up with inflation"?

A)Marta
B)Chiang
C)both Marta and Chiang
D)neither Marta nor Chiang

Question 6

Persons who are retired or engaged in own-home housework are considered to be in which of the following categories?

A)in the civilian labor force
B)not in the labor force
C)employed
D)unemployed

Question 7

In year 1 the CPI is 174,and in year 2 the CPI is 190.If Sarah's salary was $49,800 in year 1,what salary in year 2 would cause her to exactly "keep up with inflation"?

A)$34,004
B)$42,942
C)$40,508
D)$54,379

Question 8

The base year is the year

A)in which prices are unstable.
B)in which prices are lowest.
C)in which prices are highest.
D)that serves as a reference point or benchmark.
E)in which nominal output is largest.

Question 9

Suppose that 1982 is the base year for the Consumer Price Index (CPI)and in 2014 the CPI was 190.What does this "190" mean?

A)What cost $100 in 1982 on average cost 190 times as much in 2014.
B)What cost $100 in 1982 on average cost $190 in 2014.
C)What cost $100 in 1982 on average cost 0.19 times as much in 2014 (that is,it cost $19 in 2014).
D)What cost $100 in 1982 on average cost $19 more in 2014.

Question 10

Suppose that 1983 is the base year for the Consumer Price Index (CPI)and in 2015 the CPI was 226.What does this "226" mean?

A)What cost $100 in 1983 on average cost 226 times as much in 2015.
B)What cost $100 in 1983 on average cost $226 more in 2015.
C)What cost $100 in 1983 on average cost 100/226 (or 0.44)times as much in 2015 (that is,it will cost $22 in 2015).
D)What cost $100 in 1983 on average cost $126 more in 2015.

Question 11

Suppose the market basket consists of 100X,200Y,and 300Z.Current-year prices are $5 for each unit of X,$2 for each unit of Y,and $3 for each unit of Z.Base-year prices are $2 for each unit of X,Y,and Z.What is the approximate CPI in the current year?

A)15
B)70.20
C)1,200
D)150

Question 12

A person in the civilian labor force falls into one of two categories:

A)a person who works in a service industry or a person who works in a manufacturing industry.
B)unemployed or employed.
C)disemployed or unemployed.
D)a self-employed worker or a non-self-employed worker.

Question 13

One measure of the inflation rate is the

A)sum of the CPIs of adjacent years.
B)percentage change in the CPI of adjacent years.
C)percentage change in the Real GDP of adjacent years.
D)GDP minus the Real GDP in a year.

Question 14

If a person is waiting to be called back to a job from which she has been laid off,how is she classified by the Bureau of Labor Statistics?

A)as not in the labor force
B)as an unemployed person
C)as an employed person
D)as a discouraged worker

Question 15

The CPI was 238 in one year and 244 the following year.How much did prices rise between these two years?

A)2.46 percent
B)5.50 percent
C)2.52 percent
D)0.03 percent

Question 16

If a person worked at least 15 hours per week as an "unpaid" worker in a restaurant owned by her family,how is she classified by the Bureau of Labor Statistics?

A)as not in the labor force
B)as an unemployed person
C)as an employed person
D)as a discouraged worker

Question 17

Suppose that 1983 is the base year for the Consumer Price Index (CPI)and in 2014 the CPI was 220.What does this "220" mean?

A)What cost $100 in 1983 on average cost 2.20 times as much in 2014.
B)What cost $100 in 1983 on average cost $220 more in 2014.
C)What cost $100 in 1983 on average cost 0.22 times as much in 2014 (that is,it cost $22 in 2014).
D)What cost $100 in 1983 on average cost $22 more in 2014.

Question 18

The civilian non-institutional population consists of everyone in the population who is

A)at least 16 years of age,in the armed forces,or institutionalized.
B)at least 16 years of age.
C)not in the armed forces.
D)not institutionalized.
E)b,c,and d

Question 19

The unemployment rate equals the

A)number of employed persons divided by the number of unemployed persons.
B)number of unemployed persons divided by the civilian non-institutional population.
C)number of unemployed persons divided by the civilian labor force.
D)sum of unemployed persons and discouraged workers divided by the civilian labor force.

Question 20

If a person did any work as a paid employee during the Bureau of Labor Statistics survey reference week,how is she classified?

A)as an employed person
B)as not in the labor force
C)as an unemployed person
D)as part of the labor force
E)​a and d

Question 21

If the CPI is 230 in year 1 and 249 in year 2,what is the approximate percentage change in prices between the two years?

A)7.6 percent
B)8.3 percent
C)15.7 percent
D)11.4 percent
E)6.0 percent

Question 22

The movie "Return of the Jedi" earned $264 million in 1983 when it was released.The CPI in 1983 was 97.8 and the CPI in 2012 was 226.665.Approximately how much did the movie earn in 2012 dollars?

A)$590 million
B)$612 million
C)$2.12 million
D)$123 million
E)$150 million

Question 23

Smith's income was $50,000 in year 1 and $55,600 in year 2.The CPI was 114 in year 1 and 124 in year 2.What was the approximate percentage change in Smith's real income between the two years?

A)-2.2 percent
B)+3.4 percent
C)-1.7 percent
D)+5.6 percent
E)+2.2 percent

Question 24

A movie star was paid $1 million in 1960 to do a movie.The CPI was 29.3 in 1960 and the CPI in 2014 was 240.Approximately how much did the movie star earn in 2014 dollars?

A)$0.87 million
B)$8.66 million
C)$6.44 million
D)$7.74 million
E)​$8.19 million

Question 25

The unemployment due to changes in the types of skills employers require is called __________ unemployment.

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

Question 26

The cyclical unemployment rate is defined as the __________ unemployment rates.

A)sum of the structural and the frictional
B)difference between the structural and the frictional
C)difference between the existing (actual)and the natural
D)sum of the natural and the frictional

Question 27

In an economy with a population of 100 million persons,40 million hold civilian jobs and 9 million are not working but are looking for jobs.The number counted as unemployed is

A)91 million.
B)9 million.
C)51 million.
D)40 million.
E)49 million.

Question 28

In an economy with a population of 100 million persons,44 million hold civilian jobs and 6 million are not working but are looking for jobs.The unemployment rate is

A)6.0 percent.
B)13.6 percent.
C)7.3 percent.
D)9.4 percent.
E)12.0 percent.

Question 29

In an economy with a population of 100 million persons,50 million hold civilian jobs and 20 million are not working but are looking for a job.The number of persons in the civilian labor force is

A)50 million.
B)70 million.
C)170 million.
D)180 million..

Question 30

The employment rate equals the number of

A)employed persons divided by the number of unemployed persons.
B)unemployed persons divided by the civilian non-institutional population.
C)employed persons divided by the civilian labor force.
D)employed persons divided by the civilian non-institutional population.
E)none of the above

Question 31

Suppose the civilian non-institutional population equals 250,000;there are 132,500 employed persons and 10,000 unemployed persons.How many persons are not in the labor force?

A)122,500
B)77,500
C)63,500
D)107,500

Question 32

"Full employment" is said to exist when the unemployment rate equals

A)zero.
B)the cyclical unemployment rate.
C)the structural unemployment rate.
D)the natural unemployment rate.

Question 33

A market basket is made up of three goods,10X,12Y,and 18Z.The prices in the base year are $1.20,$2.10,and $3.25,respectively.The prices in the current year are $1.44,$2.23,and $3.88.What is the approximate consumer price index in the current year?

A)103
B)111
C)116
D)110
E)96

Question 34

In an economy with a population of 100 million persons,50 million hold civilian jobs and 20 million are not working but are looking for a job.The unemployment rate is

A)28.6%.
B)20%
C)25%
D)13.33%
E)There is not enough information to answer this question.

Question 35

In an economy with 100 million people,70 million hold civilian jobs and 19 million are not working but are looking for jobs.The unemployment rate is

A)12.86%
B)21.35%.
C)9.19%.
D)27.14%.
E)2.87%

Question 36

Which of the following statements is true?

A)Base year prices are necessarily higher than current year prices.
B)The CPI in the base year is always 100.
C)If the CPI is 112 in year 1 and 123 in year 2,prices have risen by approximately 9.8 percent between the two years.
D)b and c
E)a,b,and c

Question 37

Suppose the civilian non-institutional population equals 100,000 persons;the civilian labor force equals 75,000 persons;there are 70,000 employed persons and 5,000 unemployed persons.If 5,000 persons who are currently "not in the labor force" decide to join the civilian labor force,and 3,000 of them are unemployed,then

A)both the unemployment and the employment rate rise.
B)both the unemployment and the employment rate fall.
C)the unemployment rate rises and the employment rate falls.
D)the unemployment rate falls and the employment rate rises.

Question 38

Assume that Ms.Sawyer's salary is $42,000,up from $40,000 last year,while the CPI is 157.5 this year,up from 150 last year.This means that Ms.Sawyer's real income has

A)increased.
B)decreased.
C)stayed the same.
D)It depends on which year is the base year.

Question 39

In many large retail stores,price markdowns are now determined by computer.The "middle managers" who used to make these decisions personally became __________ unemployed.

A)frictionally
B)structurally
C)naturally
D)cyclically

Question 40

Unemployment that arises as a result of the time it takes for unemployed people to locate a job utilizing their transferable skills is called __________ unemployment.

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

Question 41

If we subtract the number of persons not in the labor force from the civilian noninstitutional population,we get the number of people in the

A)ranks of the unemployed.
B)civilian labor force.
C)ranks of the employed.
D)ranks of discouraged workers.
E)none of the above

Question 42

Suppose that the price index in 1999 was 170 and your salary was $44,000.Suppose in 2016 the consumer price index will be 290.What salary will you have to earn in 2016 in order to equal your 1999 real income?

A)$66,000
B)$77,647
C)$75,059
D)$83,209

Question 43

Jones lost his job in industry A,but he has skills that can be transferred to industry B (which is currently hiring).Smith lost a job in industry C,but his skills cannot be transferred to industry B or to any other industry.Jones is __________ unemployed and Smith is __________ unemployed.

A)structurally;frictionally
B)structurally;structurally
C)frictionally;frictionally
D)frictionally;structurally

Question 44

Look at the following data: Employed persons = 110 million;civilian labor force = 135 million persons;civilian noninstitutional population = 190 million.The unemployment rate is __________ percent and the employment rate is __________ percent.

A)10;69
B)8;57.9
C)18.5;57.9
D)18.5;81.5
E)12;88

Question 45

The answer is "a person employed in the civilian labor force who quits his or her job." The question is:

A)Who is a job loser?
B)Who is an entrant?
C)Who is a reentrant?
D)Who is a job leaver?
E)Who is a discouraged worker?

Question 46

Which of the following statements is true?

A)If the actual unemployment rate is currently 5% and the natural unemployment rate is 5%,then the economy is operating at full-employment.
B)The labor force participation rate is equal to the civilian noninstitutional population divided by the civilian labor force.
C)A discouraged worker is counted as an unemployed worker.
D)a and c
E)a,b,and c

Question 47

The number of employed persons plus the number of unemployed persons equals the number of persons

A)in the total population.
B)in the civilian noninstitutional population.
C)in the civilian labor force.
D)not in the labor force.
E)none of the above

Question 48

A(n)__________ is a person who was previously employed,hasn't worked for some time,and is currently reentering the labor force.

A)discouraged worker
B)entrant
C)reentrant
D)job loser
E)job leaver

Question 49

If there are 10 job losers,12 job leavers,13 reentrants,and 12 new entrants,then there are __________ unemployed persons.

A)35
B)47
C)25
D)37
E)There is not enough information to answer the question.

Question 50

Is it possible for the economy to be at full employment and still have some people who are unemployed?

A)No,full employment means that no one is unemployed.
B)Yes,since full employment exists if the economy is operating at the natural unemployment rate and there is always some natural unemployment.
C)Yes,since full employment exists if the economy is operating at the frictional unemployment rate and there is always some frictional unemployment.
D)Yes,since full employment equals the sum of the cyclical unemployment rate and the natural unemployment rate,and there is always some cyclical unemployment.
E)none of the above

Question 51

Juan lost his job as a nuclear physicist working for a defense contractor.He can not find a job because no firms in the defense industry or any other industry are hiring people with his skills.Juan is ______________ unemployed.

A)frictionally
B)cyclically
C)structurally
D)naturally

Question 52

If the cyclical unemployment rate is negative,then the

A)natural unemployment rate is less than the actual unemployment rate in the economy.
B)natural unemployment rate is greater than the actual unemployment rate in the economy.
C)structural unemployment rate is greater than the frictional unemployment rate.
D)structural unemployment rate is less than the frictional unemployment rate.
E)a and d

Question 53

A __________ is a person who was employed in the civilian labor force and was either fired or laid off.

A)new entrant
B)reentrant
C)job leaver
D)job fixer
E)none of the above

Question 54

If the CPI was 196.5 in 2005 and 172.2 in 2000,by what percentage did prices rise during the period 2000-2005?

A)0.10 percent
B)6.43 percent
C)10 percent
D)14.1 percent

Question 55

Which of the following statements is false?

A)A discouraged worker is counted as an unemployed worker.
B)The frictional unemployment rate is greater than the natural unemployment rate.
C)The natural unemployment rate is greater than the structural unemployment rate.
D)The natural unemployment rate is equal to the sum of the frictional unemployment rate and the structural unemployment rate.
E)a and b

Question 56

Look at the following data: Total population = 230 million;employed persons = 80 million;unemployed persons = 8 million.The unemployment rate is approximately __________ and the employment rate __________.

A)9.1 percent;cannot be determined
B)10 percent;is 90 percent
C)8.2 percent;is 34 percent
D)11 percent;is 38 percent
E)9.1 percent;90.9 percent

Question 57

Of all the categories of unemployment,most unemployed persons fall into the category of

A)reentrant.
B)new entrant.
C)job leaver.
D)job loser.
E)none of the above

Question 58

Look at the following data: The frictional unemployment rate is 3 percent,the natural unemployment rate is 6.5 percent,and the cyclical unemployment rate is 2.4 percent.The structural unemployment rate is __________ percent and the actual unemployment rate (in this economy)is __________ percent.

A)3;8.9
B)3.5;8.9
C)3.5;9.5
D)5.4;2.4
E)none of the above

Question 59

Which of the following statements is false?

A)The sum of the unemployment rate and the employment rate always equals 100 percent.
B)The sum of the number of employed persons and the number of unemployed persons equals the civilian non-institutional population.
C)The labor force participation rate equals the number of persons in the civilian labor force divided by the number of persons in the total population.
D)a,b,and c

Question 60

Good X sold for $40 in 1957.The CPI in 1957 was 27.6 and the CPI in 2014 was 244.537.What was the price of good X in 2014 dollars?

A)$514.60
B)$270.92
C)$1,201.60
D)$310.92
E)​$354.40

Question 61

Suppose there are 50 million persons in the population,25 million persons in the civilian labor force,and 20 million persons are employed.The number of persons unemployed is _______ million and the unemployment rate is ___________ percent.

A)25;50
B)5;10
C)5;20
D)10;10

Question 62

Look at the following data: The frictional unemployment rate is 2 percent,the structural unemployment rate is 3.5 percent,and the actual unemployment rate is 9.5 percent.The natural unemployment rate is ____________ percent and the cyclical unemployment rate is __________ percent.

A)1.5;4
B)5.5;4
C)1.5;6
D)6;15

Question 63

Discouraged workers are not counted as unemployed because they are working.

Question 64

Look at the following data: The frictional unemployment rate is 1.5 percent,the natural unemployment rate is 4.5 percent,and the cyclical unemployment rate is -1 percent.The structural unemployment rate is _________ percent and the actual unemployment rate (in this economy)is ___________ percent.

A)6;3.5
B)3;5.5
C)3;3.5
D)6;5.5

Question 65

A plumber who quits his job in Indianapolis and moves to Orlando where additional plumbers are needed is said to be ___________________ unemployed

A)frictionally
B)structurally
C)cyclically
D)underemployed

Question 66

At the time of Elise's 20 year high school reunion she was earning $50,000 and the CPI was 80.Now that it is time for her to attend her 25 year high school reunion,Elise's income has risen to $80,000 and the CPI is 150.At her 25 year reunion,can Elise rightfully brag that her real income has risen since the last time she saw her former classmates five years ago?

A)Yes,Elise's real income rose during that 5 year period.
B)No,Elise's real income fell during that 5 year period.
C)No,Elise's real income remained constant during that 5 year period.
D)It is impossible to determine what happened to Elise's real income.

Question 67

Look at the following data: The structural unemployment rate is 4 percent,the natural unemployment rate is 5 percent,and the cyclical unemployment rate is 3 percent.The frictional unemployment rate is ____________ percent and the actual unemployment rate is __________ percent.

A)2;7
B)2;8
C)1;7
D)1;8

Question 68

If the CPI is 220 and nominal income is $37,000,approximately what does real income equal?

A)$81,400
B)$16,818
C)$76,500
D)$44,118

Question 69

A common measure of inflation is the percentage change in the CPI of adjacent years.

Question 70

At the time of Kelsey's 20 year high school reunion she was earning $50,000 and the CPI was 120.Now that it is time for her to attend her 30 year high school reunion,Kelsey's income has risen to $97,000 and the CPI is 230.At her 30 year reunion,can Kelsey rightfully brag that her real income has risen since the last time she saw her former classmates ten years ago?

A)Yes,Kelsey's real income rose during that 10 year period.
B)No,Kelsey's real income fell during that 10 year period.
C)No,Kelsey's real income remained constant during that 10 year period.
D)It is impossible to determine what happened to Kelsey's real income.

Question 71

"Full employment" is said to exist when the actual unemployment rate is zero.

Question 72

The labor force participation rate (LFPR)equals the number of

A)employed persons divided by the number of unemployed persons.
B)unemployed persons divided by the civilian noninstitutional population.
C)employed persons divided by the civilian labor force.
D)employed persons divided by the civilian noninstitutional population.
E)none of the above

Question 73

Every ____________ the U.S.government surveys ______________ of households to gather information about the number of Americans unemployed.

A)month;millions
B)week;millions
C)week;thousands
D)month;thousands

Question 74

The sum of the unemployment rate and the employment rate always equals 100 percent.

Question 75

The value of the consumer price index (CPI)is always equal to ______________ in the base year.

A)1
B)10
C)100
D)1,000
E)There is not enough information given to answer this question.

Question 76

Which of the following statements is false?

A)Changes in technology can lead to changes in the ways in which people are employed.
B)Cultural differences may help to explain why some men have difficulty finding jobs in some sectors of the modern economy.
C)In recent years,the demand for workers in the manufacturing sector has grown dramatically compared to the demand for workers in the service sector.
D)Some people may be at a loss as to what skills are required of them in the current labor market.

Question 77

Suppose there are 200 million persons in the population,120 million persons in the civilian labor force,and 90 million persons are employed.The number of persons unemployed is _______ million and the unemployment rate is ___________ percent.

A)30;25
B)30;33
C)30;5
D)80;40

Question 78

In year 1 the CPI is 180,and in year 2 the CPI is 192.From year 1 to year 2,Javier's salary rises from $40,000 to $42,000,and Tom's salary rises from $55,000 to $57,000.Who is "more than keeping up with inflation"?

A)Javier
B)Tom
C)both Tom and Javier
D)neither Tom nor Javier

Question 79

At the time of Carol's 10 year high school reunion she was earning $30,000 and the CPI was 90.Now that it is time for her to attend her 20 year high school reunion,Carol's income has risen to $65,000 and the CPI is 200.At her 20 year reunion,can Carol rightfully brag that her real income has risen since the last time she saw her former classmates ten years ago?

A)Yes,Carol's real income rose during that 10 year period.
B)No,Carol's real income fell during that 10 year period.
C)No,Carol's real income remained constant during that 10 year period.
D)It is impossible to determine what happened to Carol's real income.

Question 80

Suppose there are 65 million employed persons,5 million unemployed persons,and 35 million persons not in the labor force.What does the civilian noninstitutional population equal?

A)70 million
B)110 million
C)65 million
D)105 million