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-The information in the table above gives the 2008 reference base period CPI basket and prices used to construct the CPI for a small nation. It also has the 2009 prices. What is the value of the CPI for 2009? A) 140 B) 75 C) 100 D) 133 -The information in the table above gives the 2008 reference base period CPI basket and prices used to construct the CPI for a small nation. It also has the 2009 prices. What is the value of the CPI for 2009?


A) 140
B) 75
C) 100
D) 133

E) B) and C)
F) A) and D)

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In a country with a working- age population of 300 million, 230 million workers are employed and 40 million workers are unemployed. What is the labor force participation rate?


A) 90 percent
B) 65 percent
C) 5 percent
D) 100 percent

E) A) and D)
F) A) and C)

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Which of the following is NOT considered to be in the labor force?


A) a person who is waiting to start a new job in the next 30 days
B) a person who is not working but who has tried to find a job in the past week
C) a student who works part- time
D) a person who is not working and who has not tried to find a job

E) None of the above
F) A) and D)

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To calculate the unemployment rate, which of the following are necessary pieces of information? I. the number of unemployed persons II. the population III. the number of people in the labor force IV. the working age population


A) I and III
B) I and IV
C) I, II III and IV
D) I and II

E) B) and D)
F) B) and C)

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The biases in the CPI include the


A) old goods, new goods, and quality change biases.
B) substitution, new goods, and old goods biases.
C) old goods, unemployment, and inflation biases.
D) new goods, quality change, and substitution biases.

E) C) and D)
F) All of the above

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-In the above table, the inflation rate between 2007 and 2008 is approximately A) 100 percent. B) 10 percent. C) 9 percent. D) 110 percent. -In the above table, the inflation rate between 2007 and 2008 is approximately


A) 100 percent.
B) 10 percent.
C) 9 percent.
D) 110 percent.

E) A) and B)
F) B) and C)

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Unemployment caused by the normal labor turnover is called unemployment.


A) part- time
B) involuntary
C) cyclical
D) frictional

E) B) and C)
F) A) and D)

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Of the following sequences of price levels, which correctly represents a 5 percent inflation rate?


A) 100, 105, 105, 105
B) 100, 100, 100, 100
C) 100, 105, 110.25, 115.76
D) 100, 105, 110, 115

E) A) and D)
F) All of the above

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Define the GDP deflator and demonstrate how the GDP deflator is calculated.

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The GDP deflator reveals the average cha...

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In an economy, 42 million people are in the labor force, 38 million are employed, and 47 million are of working age. How many people are not in the labor force?


A) 4 million
B) 9 million
C) 5 million
D) 19 percent

E) B) and C)
F) A) and D)

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C

During a recession, the .


A) number of discouraged workers increases
B) unemployment rate decreases
C) employment- to- population ratio increases
D) number of aggregate hours worked increases

E) A) and B)
F) C) and D)

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If the number of people unemployed is 100, the number of people employed is 1000, and the working- age population is 1400, then the unemployment rate is


A) 10 percent.
B) 7.1 percent.
C) 6.6 percent.
D) 9.1 percent.

E) None of the above
F) A) and B)

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The unemployment rate equals [(the number of people unemployed)/(the population)] × 100.

A) True
B) False

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False

This type of unemployment reflects the normal amount of unemployed workers who possess skills that will enable them to find another job.


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

E) A) and B)
F) A) and C)

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The table below shows the price index for Zimbabwe starting in 2000. The table below shows the price index for Zimbabwe starting in 2000. .econstats.com The data show that A) the inflation rate between 2005 and 2006 was 319.2 percent. B) new goods bias and quality change bias are responsible for most of Zimbabwe's inflation. C) the inflation rate between the base year and 2001 is 73.4 percent. D) while Zimbabwe experienced a high price level, it did not experience high inflation. .econstats.com The data show that


A) the inflation rate between 2005 and 2006 was 319.2 percent.
B) new goods bias and quality change bias are responsible for most of Zimbabwe's inflation.
C) the inflation rate between the base year and 2001 is 73.4 percent.
D) while Zimbabwe experienced a high price level, it did not experience high inflation.

E) B) and C)
F) C) and D)

Correct Answer

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A person quits her job in order to spend time looking for a better- paying job. This is an example of


A) frictional unemployment.
B) cyclical unemployment.
C) structural unemployment.
D) seasonal unemployment.

E) All of the above
F) A) and B)

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Suppose the labor force in Tiny Town is 100 people. If the in Tiny Town is 150 people, the labor force participation rate equals _ multiplied by 100.


A) working age population; 100/150
B) number of employed persons; 100/250
C) number of employed persons; 100/150
D) working age population; 100/250

E) A) and D)
F) B) and D)

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Explain the different labor market flows.

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The number employed decreases due to job leavers, job losers, and retirees. The number of employed increases due to hires, recalls, and entrants and reentrants. As long they don't withdraw, those who leave employment are unemployed. All who aren't employed but are not actively searching for a job are out of the labor force.

-The table above gives the CPI basket for 2007 and 2008. Suppose that 2007 is the reference base period. a) What is the cost of the CPI basket in 2007? b) What is the cost of the CPI basket in 2008? c) What is the CPI for 2007? d) What is the CPI for 2008? -The table above gives the CPI basket for 2007 and 2008. Suppose that 2007 is the reference base period. a) What is the cost of the CPI basket in 2007? b) What is the cost of the CPI basket in 2008? c) What is the CPI for 2007? d) What is the CPI for 2008?

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a) The cost of the CPI basket in 2007 is...

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At the end of last year, the CPI equaled 120. At the end of this year, the CPI equals 132. What is the inflation rate over this year?


A) 10 percent
B) 6 percent
C) 12 percent
D) None of the above answers are correct because more information is needed to calculate the inflation rate.

E) B) and C)
F) C) and D)

Correct Answer

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