Question 1 of 20
Economists define the labor force to include __________.
A. only people who are working full time
B. people who are working
C. people who are not working but are actively looking for a job, and people who are working
D. all individuals of working age, regardless of whether they are working or looking for a job
Question 2 of 20
If Sam does not have a job and is not looking for work, he is considered __________.
A. unemployed and in the labor force
B. unemployed and not in the labor force
C. not in the labor force
D. unemployed
Question 3 of 20
Economists believe that the CPI overstates actual price changes by as much as __________ to __________ percent each year.
A. 1; 2
B. 2; 3
C. 0.5; 1
D. 0.5; 1.5
Question 4 of 20
Macroeconomics __________.
A. studies the behavior of individual consumers, firms, and markets
B. studies the behavior of the economy as a whole
C. involves the interaction between different countries in specific markets
D. studies how computer automation has changed economics
Question 5 of 20
The labor supply and demand most directly affect the level of __________ in an economy.
A. people attending colleges
B. people requiring retraining
C. employment
D. welfare benefits
Question 6 of 20
The value of all final goods and services produced during a given time period measures a nation's __________.
A. gross domestic product
B. net national product
C. consumer price index
D. net exports
Question 7 of 20
Which one of the following statements is true of the Consumer Price Index?
A. It does not take account of the price of imported goods and services.
B. It measures changes in prices of a fixed basket of goods.
C. It does not take into account the price of used goods.
D. It understates the true rate of inflation.
Question 8 of 20
The Consumer Price Index (CPI. differs from a chain-weighted price index in that the CPI __________.
A. requires calculation of GDP, while the chain-weighted index does not
B. measures the costs of a typical fixed basket of goods over time, while the chain-weighted index does not
C. allows for the goods consumed in an economy to change over time, while the chain-weighted index does not
D. compares the prices of all goods in one year to the prices of all goods in other years
Question 9 of 20
Suppose that nominal GDP in year 1 is 200 and nominal GDP in year 2 is 242. Assume that inflation is 10 percent per year. How fast did the economy grow between these two years?
A. 10 percent
B. 12 percent??
C. 21 percent
D. 42 percent
Question 10 of 20
Economists define the unemployed as individuals who are __________.
A. not currently working
B. not currently working but are actively looking for work
C. working but looking for a different job
D. working less than their desired amount of time
Question 11 of 20
Economists say that the economy is at "full employment" when the __________.
A. structural unemployment rate is zero
B. total unemployment rate is zero
C. frictional unemployment rate is zero
D. cyclical unemployment rate is zero
Question 12 of 20
The unemployment rate is the number of unemployed people __________.
A. divided by the number of people who are working
B. divided by the total working-age population
C. divided by the sum of the number of people who are working and the number of people who are looking for work
D. and the number of people working fewer than their desired number of hours, divided by the number of people who are working or looking for work
Question 13 of 20
When there are sustained increases in real GDP over time, we say that the economy is undergoing __________. Answer: C
A. economic stagnation
B. a recession
C. economic growth
D. massive changes in productive capacity
Question 14 of 20
For the purpose of GDP accounting, consumption expenditures include __________.
A. only nondurable goods
B. only durable goods
C. both nondurable goods and services
D. durable goods, nondurable goods, and services
Question 15 of 20
The index most widely used by the government and the private sector to measure changes in the cost of living is the __________.
A. Producer Price Index
B. Consumer Price Index
C. the GDP deflator
D. the chain-weighted price index
Question 16 of 20
Suppose the stock of capital remains constant. By adding more labor, perhaps a second work shift, output __________.
A. decreases
B. increases
C. remains the same
D. becomes more costly
Question 17 of 20
The circular flow is used to make the point that __________.
A. rising prices never occur during times of unemployment
B. unemployment only occurs during a recession
C. production generates income
D. households purchase factors of production from firms
Question 18 of 20
If you take out a bank loan prior to unanticipated inflation, __________.
A. it will be harder for you to repay the loan because of the inflated dollar
B. you will gain at the expense of your bank
C. your bank will gain at your expense
D. neither you nor your bank will be affected, because the loan was made prior to the inflation
Question 19 of 20
Which of the following would be a macroeconomic question?
A. How have the retirement benefits in the auto industry changed over time?
B. How has inflation increased over time?
C. How has the price of gold increased over time?
D. How has the number of commercial airline flights decreased over time?
Question 20 of 20
If you negotiated a salary based on an anticipated inflation rate of 4 percent, and the actual inflation rate turned out to be 6 percent, __________.
A. the purchasing power of your real wages would be more than you anticipated
B. your employer would have gained at your expense
C. your real wage will increase, but your nominal wage will decrease
D. the purchasing power of your wages will not change, since purchasing power is based on your nominal wage
Macroeconomics Set-1
