Question 1

Suppose it costs a family $20,000 to live in 1987 and costs $50,000 to live today.If 1987 was the base year,how much is the CPI today?

Accepted Answer

A)  100
B)  200
C)  250
D)  500
E)  750

Question 2

The CPI is calculated by

Accepted Answer

A)  summing the prices of all consumption goods in the economy.
B)  multiplying the rate of inflation in the economy times the unemployment rate.
C)  surveying a group of consumers and asking them about their monthly expenditures on necessities.
D)  pricing a basket of goods and services purchased by a typical urban householD.

Question 3

Demand-pull inflation is often summed up as

Accepted Answer

A)  too many dollars chasing too few goods.
B)  the wage-price spiral.
C)  profit-push inflation.
D)  supply-side cost shock inflation.

Question 4

The prosperity phase of a three-phase cycle sets in after the _____ phase.

Accepted Answer

The answer of The prosperity phase of a three-phase cycle...

Question 5

There were/was _____ recession(s) in the 1990s.

Accepted Answer

A)  no
B)  one
C)  two
D)  three
E)  four

Question 6

The Phillips curve shows the relationship between various rates of unemployment and

Accepted Answer

A)  interest rates.
B)  real wage rates.
C)  inflation.
D)  the money supply.
E)  investment demand.

Question 7

Because of discouraged workers,the unemployment rate

Accepted Answer

A)  tends to behave very erratically.
B)  overstates the unemployment problem.
C)  understates the unemployment problem.
D)  None of the choices are correct.

Question 8

Which statement is true?

Accepted Answer

A)  People collecting unemployment benefits are not counted as unemployed.
B)  The Bureau of Labor Statistics compiles the unemployment rate from the data they collect from the unemployment insurance officers.
C)  The unemployment rate is calculated by dividing the number of unemployed by the number of employed.
D)  None of the statements are true.

Question 9

Label the graph below with respect to inflation,disinflation,and deflation.

Accepted Answer

The answer of Label the graph below with respect to...

Question 10

Frictional unemployment describes

Accepted Answer

A)  recent entrants,re-entrants,and voluntary quits who require only a short time to find new employment.
B)  the growing number of job seekers whose absence of skills makes them unemployable in any line of work except unskilled,dead-end jobs.
C)  the loss of jobs resulting from periods of recession.
D)  extended periods of unemployment during which retraining for new jobs occurs.
E)  seasonal layoffs and periods without work,such as construction and public school teaching.

Question 11

Suppose that on average each dollar in 1988 would buy what could have been purchased for 25 cents in 1967 (which you assume is the base year for the CPI) .What is the CPI in 1988?

Accepted Answer

A)  100
B)  200
C)  400
D)  500
E)  ¼

Question 12

The term recession refers to

Accepted Answer

A)  a period of decline in real GDP for two business quarters.
B)  a fall in the general level of real wages.
C)  a fall in the CPI.
D)  a fall in the rate of increase of real per capita GDP.
E)  a prolonged period of falling prices.

Question 13

After a business cycle peak a recession follows

Accepted Answer

A)  all of the time.
B)  most of the time.
C)  some of the time.
D)  none of the time.

Question 14

Suppose there are 8 million unemployed workers seeking jobs.After a period of time,2 million of them become discouraged over their job prospects and cease to look for work.As a result of this,the official unemployment rate would

Accepted Answer

A)  increase in the short run but eventually decline.
B)  increase.
C)  decline.
D)  be unchangeD.

Question 15

Use the following choices regarding the various types of unemployment to describe the following situation.After staying home for 23 years raising her four children,Susan has reentered the labor force looking for full-time employment.

Accepted Answer

A)  Frictional unemployment
B)  Structural unemployment
C)  Natural unemployment
D)  Cyclical unemployment

Question 16

The government agency that computes the CPI is the ____.

Accepted Answer

Bureau of ...

Question 17

A discouraged worker is one who

Accepted Answer

A)  is unhappy with his job.
B)  quits his job to attend college.
C)  leaves the labor force after an unsuccessful job search.
D)  None of the choices are true of a discouraged worker.

Question 18

Statement I: It is possible for the unemployment rate to decline while the total employment declines.
Statement II: It is possible for the unemployment rate to decline while the number of unemployed people stays the same.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.

Question 19

The recession of 2001 was caused by

Accepted Answer

A)  endogenous factors.
B)  exogenous factors.
C)  equally by endogenous and exogenous factors.
D)  neither endogenous and exogenous factors.

Question 20

The U.S.Department of Labor calculates the unemployment rate by

Accepted Answer

A)  totaling the number of households receiving unemployment compensation.
B)  analyzing federal income tax returns.
C)  surveying households.
D)  surveying businesses to determine patterns of hiring and layoffs.

Exam 10: Economic Fluctuations, unemployment, and Inflation

Demand-pull inflation is often summed up as

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Use the following choices regarding the various types of unemployment to describe the following situation.After staying home for 23 years raising her four children,Susan has reentered the labor force looking for full-time employment.

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Because of discouraged workers,the unemployment rate

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Frictional unemployment describes

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A discouraged worker is one who

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There were/was _____ recession(s) in the 1990s.

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The government agency that computes the CPI is the ____.

Correct AnswerverifiedBureau of ...View AnswerShow Answer

After a business cycle peak a recession follows

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The prosperity phase of a three-phase cycle sets in after the _____ phase.

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Suppose that on average each dollar in 1988 would buy what could have been purchased for 25 cents in 1967 (which you assume is the base year for the CPI) .What is the CPI in 1988?

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The CPI is calculated by

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Suppose it costs a family $20,000 to live in 1987 and costs $50,000 to live today.If 1987 was the base year,how much is the CPI today?

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The Phillips curve shows the relationship between various rates of unemployment and

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The U.S.Department of Labor calculates the unemployment rate by

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The term recession refers to

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The recession of 2001 was caused by

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Statement I: It is possible for the unemployment rate to decline while the total employment declines. Statement II: It is possible for the unemployment rate to decline while the number of unemployed people stays the same.

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Label the graph below with respect to inflation,disinflation,and deflation.

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Which statement is true?

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Suppose there are 8 million unemployed workers seeking jobs.After a period of time,2 million of them become discouraged over their job prospects and cease to look for work.As a result of this,the official unemployment rate would

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Bureau of ...
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