Question 1

Which of the following is an example of seasonal unemployment?

Accepted Answer

Seasonal unemployment refers to jobs that are only available at a specific time of year and during the rest of the year, workers are unemployed. Tax preparation jobs are only in high demand during tax season, which ends on April 15th each year. Therefore, losing tax preparation jobs after April 15th is an example of seasonal unemployment.

Question 2

In 1999, the U.S. population 16 years old or older was 207.8 million, the number employed was 133.5 million, the number unemployed was 5.9 million, and the labor force was 139.4 million. The unemployment rate in 1999 was _______%.

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed by the labor force and multiplying by 100. In this case, the unemployment rate is (5.9 million / 139.4 million) * 100 = 4.2%.

Question 3

Recall Application 4, "The Introduction of Cell Phones and the Bias in the CPI," to answer the following questions:
-According to the application, the failure to include cell phones in the calculation of the CPI creates an upward bias on the telecommunications component of the CPI by 0.8 to 1.9 percent. The reason for this upward bias is most likely from

Accepted Answer

The failure to include cell phones in the CPI calculation means that the decrease in their price, which would lower the overall telecommunications costs, is not accounted for, leading to an upward bias.

Question 4

If the number of people classified as unemployed is 50,000 and the number of people classified as employed is 250,000, what is the unemployment rate?

Accepted Answer

The answer of If the number of people classified as...

Question 5

NEETS ARE THE NEW DISCOURAGED WORKERS IN JAPAN
Who are the new discouraged workers in Japan?
In Japan, there is growing concern about young people who are not joining the labor force. Young workers who have given
up looking for work and often receive support from their parents are known as NEETs—"not in education, employment, or
training." Because Japan has an aging population and does not encourage immigration, it is concerned about labor shortages
and has focused attention on the NEETs. Many in Japan are concerned over this phenomenon because it potentially signals a
change in the strong Japanese work ethic.
However, the number of individuals in this category is quite small, only 2 percent of Japan’s 33 million young people
between the ages of 15 and 34. Nonetheless, the fact that the Japanese decided to name this group suggests that it is socially
significant to them. In the United States, individuals not seeking work and supported by their parents would be out of the
labor force and possibly marginally attached workers.
-If a person classified as NEET enters the labor market but could not find a job, the labor force:

Accepted Answer

When a NEET enters the labor market and starts actively looking for a job, they are counted as part of the labor force, thus increasing its size.

Question 6

An increase in the labor force, without a corresponding increase in the number of employed workers will cause the:

Accepted Answer

An increase in the labor force without a corresponding increase in the number of employed workers indicates that more people are actively looking for work but are unable to find employment. This will lead to an increase in the number of unemployed individuals, which will, in turn, increase the unemployment rate.

Question 7

An economy is experiencing hyperinflation if the inflation rate exceeds:

Accepted Answer

Hyperinflation is typically defined as a situation where prices increase by 50% or more per month. Option A (25% per month) and B (50% per year) do not meet this criteria. Option D (100% per year) is also not as severe as Option C (50% per month).

Question 8

If the number of unemployed equals 20,000, the number of employed equals 60,000, and the total population 16 years of age and older is 90,000, the labor- force participation rate:

Accepted Answer

The answer of If the number of unemployed equals 20,000,...

Question 9

Cyclical unemployment is the:

Accepted Answer

Cyclical unemployment is the type of unemployment that occurs as a result of the business cycle, often peaking during recessions and depressions when there is a decrease in demand for goods and services, causing businesses to cut back on production and lay off workers.

Question 10

A "menu cost" is the cost associated with:

Accepted Answer

Menu cost refers to the cost incurred by a firm or an organization to change its prices. When there is inflation, the firm has to adjust its price lists to stay competitive in the market. This adjustment involves printing new price lists, updating the website, informing customers, and adjusting accounting systems. These activities involve tangible and intangible costs, which are collectively known as menu costs. Thus, changing price lists when there is inflation is the correct answer to this question.

Question 11

Which of the following individuals benefit when the economy experiences unanticipated inflation?

Accepted Answer

Borrowers benefit from unanticipated inflation because they are paying back loans with dollars that are worth less than when they borrowed them. Savers and fixed income earners are hurt by inflation because the value of their savings and income decreases. Lenders are also hurt by inflation because the money they are repaid is worth less than when they lent it out.

Question 12

Recall Application 4, "The Introduction of Cell Phones and the Bias in the CPI," to answer the following questions:
-According to the application, the failure to include cell phones in the calculation of the CPI creates an upward bias on the telecommunications component of the CPI by 0.8 to 1.9 percent. If the measured inflation for telecommunications was 3%, then the actual inflation was somewhere between:

Accepted Answer

The actual inflation is the measured inflation minus the bias. Since the bias is 0.8 to 1.9 percent, subtracting this from the measured inflation of 3% gives an actual inflation range of 1.1 to 2.2 percent.

Question 13

A man is fired from his job because he was late for work too many times. While taking a break from searching for another job he would be classified as:

Accepted Answer

The answer of A man is fired from his job...

Question 14

A "shoe- leather cost" is the cost associated with:

Accepted Answer

Shoe-leather costs refer to the increased costs of transactions caused by inflation, where people try to minimize their cash holdings to avoid the erosion of purchasing power, leading to more frequent trips to the bank or other financial institutions.

Question 15

What is the difference between the CPI and the GDP chain index?

Accepted Answer

The CPI focuses on consumer goods and services, including imports, while the GDP chain index covers all goods and services produced domestically, excluding imports and including capital goods.

Question 16

-Refer to Table 6.11. If 1999 is the base year, the price index in 2000 is:

Accepted Answer

The price index in a given year is calculated by dividing the price level in that year by the price level in the base year and then multiplying by 100. If 1999 is the base year, the price index for 2000 would be calculated based on the relative price change from 1999 to 2000. The given choice D (121.7) is likely the result of such a calculation.

Question 17

What are some of the problems associated with using the Consumer Price Index as a measure of changes in the cost of living?

Accepted Answer

The answer of What are some of the problems associated...

Question 18

Janie graduated from college a month ago and is now without work. She accepted a job that will start next month. Today, Janie is:

Accepted Answer

Janie is in the labor force because she has accepted a job that will start next month, indicating she is actively participating in the labor market.

Question 19

-Refer to Table 6.5. The labor- force participation rate is:

Accepted Answer

The labor-force participation rate is calculated as the labor force divided by the working-age population, then multiplied by 100. The given percentage, 81.81%, likely represents this calculation.

Question 20

When the inflation rate exceeds 50 percent per month, the economy is experiencing:

Accepted Answer

When the inflation rate exceeds 50 percent per month, the economy is experiencing hyperinflation. This is a situation where prices increase rapidly and uncontrollably, often leading to the collapse of a country's currency and economy.

Quiz 6: Unemployment and Inflation