Exam 5: Introduction to the Macroeconomy

A) Frictional unemployment will likely decrease to zero.
B) The natural rate of unemployment is likely to increase.
C) The natural rate of unemployment is likely to decrease.
D) The natural rate of unemployment is unlikely to change.

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A) by multiplying the current-year value of a market basket by the base-year value of the same market basket and dividing by 100
B) by dividing the current-year value of a market basket by the base-year value of the same market basket and multiplying by 100
C) by dividing the value of a market basket by the rate of inflation
D) by multiplying the value of a market basket by the rate of inflation

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A) an individual who quits their job to look for a better paying job
B) an individual who quits his job to raise a child
C) a discouraged worker
D) an individual who is not looking for a job because he works in the underground economy

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A) 11 percent
B) 14.4 percent
C) 16.8 percent
D) 20.2 percent

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A) using a basket of goods and services that includes every item included in the nation's GDP
B) using a basket of goods containing an assortment of raw materials, intermediate goods, and final goods
C) using a basket of goods and services purchased by a typical urban consumer
D) using a basket of intermediate goods purchased by a typical business to use in the production process

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A) 8 percent
B) 10.9 percent
C) 28 percent
D) 38 percent

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A) if worker wages are set by long-term contracts
B) if it is correctly anticipated and interest rates adjust accordingly
C) if worker wages increase at the same rate as real growth
D) if interest rates are not adjusted accordingly when inflation occurs

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A) People are underemployed when they first enter the job market.
B) People are underemployed if they lose their job because of a recession.
C) People are underemployed when they make less money than someone doing a similar job.
D) People are underemployed if their skills are greater than are necessary for their jobs.

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A) The CPI deals with a fixed market basket and doesn't capture the savings households enjoy when they take advantage of sales.
B) The CPI does not pick up the increase in economic welfare caused by new products entering the marketplace.
C) The CPI does not adequately deal with changes in the quantity of products purchased over time.
D) The CPI does not adequately reflect that different consumers have different tastes.

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A) Some individuals who want to work may become discouraged and cease actively looking for work.
B) Part-time employees are counted as unemployed.
C) Retired workers are considered unemployed.
D) Workers who are laid off from their jobs but looking for new ones are not counted among the unemployed.

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A) the price of the basket of goods and services in the given year divided by the price of the basket in the base year, then multiplied by 100
B) the price of the basket of goods and services in the base year divided by the price of the basket in the given year, then divided by 100
C) the price of the basket of goods and services in the given year multiplied by the price of the basket in the base year, then divided by 100
D) the price of the basket of goods and services in the base year divided by the price of the basket in the given year, then multiplied by 100

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A) unemployment caused by automation in the workplace
B) unemployment that is due to normal turnover in the labour market
C) unemployment caused by lack of training and education
D) unemployment that is due to the friction of competing ideological systems

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A) -20
B) 80
C) 100
D) 120

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A) A jobless person can claim to be looking for work even if he or she is not really interested in employment.
B) Involuntary part-time workers and discouraged workers are not included in unemployment statistics.
C) Labour unions may not cooperate fully in providing reliable unemployment information to Statistics Canada.
D) Workers temporarily laid off are included in the unemployment statistics.

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