5.1 Employment and Unemployment, Review Test: Chapter 5-A,
The higher than normal unemployment at a business cycle trough and the lower than normal unemployment at a business cycle peak is ______ unemployment.
cyclical
When cyclical unemployment increases and other things remain the same, ______.
the natural unemployment rate does not change
The CPI tells us ______.
the price level in a given period expressed as a percentage of the price level in the base period, which is by definition equal to 100
An economy is at full employment when ______.
the unemployment rate equals the natural unemployment rate
If we count marginally attached workers as unemployed ______
the unemployment rate rises.
An economy is at full employment when ______.
there is no cyclical unemployment
The CPI basket consists of items that urban households buy. The CPI places more weight on _______ than on _______.
transportation; medical care
Choose the statements concerning neoclassical growth theory that are true. 1. Technological change results from the choices people make in the pursuit of profit. nothing 2. Neoclassical growth theory is the proposition that real GDP per person grows because technological change induces a level of saving and investment that makes capital per hour of labor grow.a level of saving and investment that makes capital per hour of labor grow. 3. The rate of technological change influences the economic growth rate but economic growth does not influence the pace of technological change.the pace of technological change. 4..Neoclassical growth theory states that growth in real GDP per person can persist indefinitely. nothing
#2 and 3
The personal consumption expenditure deflator is calculated as _______.
(Nominal C divided by ÷Real C) times ×100
The CPI in 2013 is 150 and the CPI in 2014 is 163.5. The inflation rate in 2014 is _____ percent The inflation rate in 2014 ______.
9.0 D. might be higher, lower, or the same as in 2013
Choose the statement that is incorrect. A. The chained CPI overcomes the sources of bias in the CPI. B. The CPI is just one of many alternative price level index numbers. C. The bias in the CPI distorts private contracts and increases government outlays. .D. A bias in the CPI gives workers with wage contracts linked to the CPI less real income than the firm intended.
A bias in the CPI gives workers with wage contracts linked to the CPI less real income than the firm intended.
Who in the following statements is a discouraged worker?
Dan is available to work but has not looked for a job in the past eight weeks because of repeated applications but no single offer.
An economy is at full employment when ______.
all unemployment is frictional and structural
An increase in discouraged workers ______ the official unemployment rate and ______ U-4.
decreases; does not change
When the unemployment rate ______ the natural unemployment rate, real GDP ______ potential GDP.
equals; equals
3. How will the unemployment rate change if Sarah quits and starts to search for a full-time job? The unemployment rate will _____ if Sarah quits and starts to search for a full-time job.
rise
An unemployed person ______.
wants work, has made specific efforts to find a job within the previous four weeks, or is waiting to be called back to a job from which he or she has been laid off, or is waiting to start a new job within 30 days
Once a month, the Bureau of ______ Statistics calculates the Consumer Price Index, which is a measure of the ______ consumers for a fixed basket of consumer goods and services.
Labor; average of the prices paid by urban
An increase in the population ______ potential GDP and ______ potential GDP per hour of labor.
increases; decreases
Choose the statement that is incorrect. A. The labor force participation rate and the employment-to-population ratio fluctuate with the business cycle. B. The employment-to-population ratio falls during a recession and increases during an expansion. C. The trend in the labor force participation rate and the employment-to-population ratio is upward before 2000 and downward after 2000. D. The employment-to-population ratio fluctuates less than the labor force participation rate.
D. The employment-to-population ratio fluctuates less than the labor force participation rate.
The BLS reported that in July 2012, employment decreased by 195,000 to 142,220,000 and the unemployment rate increased from 8.2 percent to 8.3 percent. About 3.4 million people were marginally attached workers and 0.9 million of them were discouraged. Calculate the change in unemployment in July 2012.
In July 2012, the number of unemployed changed by 151528
Choose the statements concerning neoclassical growth theory that are true. 1. Technological change results from chance. 2. .Technological change results from the choices people make in the pursuit of profit. 3.Neoclassical growth theory was developed in the late 19th century. 4. Economic growth will stop if technology stops advancing.
Statements 1 and 4 are correct.
The Bureau of Labor Statistics reports six alternative measures of the unemployment rate. Choose the correct statements. a. U-5 measures the job losers. b. U-3 is the official unemployment rate. c. U-1 measures those who are unemployed for 15 weeks or more. d. U-3 adds discouraged workers to the official unemployment rate.
Statements b and c are correct.
Choose the statement that is incorrect. A. The unemployment rate was lower during the recession in 1982 than it was during the recession of 1990-1991. Your answer is correct.B. Before the 2008-2009 recession, the peak unemployment rate during a recession was on a downward trend. C. The unemployment rate increases in a recession, peaks after the recession ends, and decreases in an expansion. D. The average unemployment rate from 1980 to 2014 was 6.5 percent.
A. The unemployment rate was lower during the recession in 1982 than it was during the recession of 1990-1991.
Choose the statement that is incorrect. A. An unexpected inflation or deflation has no effect on the economy. B. An unexpected inflation or deflation diverts resources from production. C. An unexpected inflation or deflation brings lower real GDP and employment. D. An unexpected inflation or deflation redistributes income and wealth.
An unexpected inflation or deflation has no effect on the economy.
Choose the statement that is incorrect. A. Unemployment results in lost production and lost incomes. B. In the United States in 2009, 22 million fewer people had jobs than in 1989. Your answer is correct.C. Unemployment results in lost human capital. D. In recent years, population growth has outstripped jobs growth, resulting in a serious unemployment problem.
B. In the United States in 2009, 22 million fewer people had jobs than in 1989.
Shrinking U.S. Labor Force Keeps Unemployment Rate From Rising An exodus of discouraged workers from the job market kept the unemployment rate from climbing above 10 percent. Had the labor force not decreased by 661,000, the unemployment rate would have been 10.4 percent. The number of discouraged workers rose to 929,000 last month. A discouraged worker ______.
B. has stopped looking for a job because of repeated failure to find one
A person is in the labor force if any one of the following statements is true except that he or she is ______.
aged 16 and over and not in jail, hospital, or some other form of institutional care A person who is aged 16 and over and not in jail, hospital, or some other form of institutional care is a member of the working-age population but not necessarily a member of the labor force.
In the United States, the CPI basket consists of items that ______ . ______ has the greatest weight in the CPI basket.
an average urban household buys; Housing
A marginally attached worker is a person who does not have a job, is _____ and _____ to work, has _____ specific efforts to find a job within the previous _____ weeks, but has looked for work sometime in the recent past.
available; willing; not made; four
The reference base period for the CPI is 1982-1984. In June 2014, the CPI was 238.3. This number tells us that the ______ of the prices paid by urban consumers for a fixed basket of consumer goods and services was ______ .
average; 138.3 percent higher in June 2014 than the average of 1982-1984
Students who leave school in the spring and look for work are one source of ______.
frictional unemployment
Question facts 1. 72 million people had full-time jobs 2. 12 million people had part-time jobs 3. 6 million people were without work but were available for work and had made specific efforts to find a job within the past four weeks or were waiting to be recalled from a layoff or had a new job to start within the next 30 days 4. 7 million part-time workers were looking for full-time jobs 5. 33 million people of working age did not have jobs and did not want jobs The Population Survey in Blogsville for the past month is given in the table: In Blogsville last month, ______ million people were in the labor force and ______ million people were in the working-age population.
90; 123
How will the labor force change if the following events occur? 1. Sarah starts a second job 2. Pat finds a good job and is hired. 3. Mary takes a job at McDonald's while she waits to start her new job.
Events 1, 2, and 3 will not change the labor force.
The Current Population Survey reported the following situations in July 2014: Sarah works 10 hours a week at McDonald's. She is available to work more hours but hasn't looked for extra work. Kevin spent the first six months of 2014 actively searching for a job but he didn't get hired. He believes there are no jobs, so he has given up looking. Pat quit the job he had for the past two years and is actively looking for a better paying job. He is available to work and is still searching for a job. Mary is a new graduate who was hired while she was a student to start a job in August. Johnnie quit his band in June, has no job in July, and is not looking for work. 1. Who does the BLS classify as being unemployed, a part-time worker, an employed person, a discouraged worker, and not in the labor force? Explain your classification. ______ are unemployed, ______ is a part-time worker, _____ is a discouraged worker, and _____ is not in the labor force.
Pat and Mary; Sarah; Kevin; Johnie
The Bureau of Labor Statistics reports six alternative measures of the unemployment rate. Choose the correct statements. a. U-1 adds the economic part-time workers to the official unemployment rate. b. U-6 measures those who are unemployed for 15 weeks or more. c. U-3 is the official unemployment rate. d. U-5 adds all marginally attached workers to the official unemployment rate.
Statements c and d are correct.
The people who live on Second Life Island consume only juice and cloth. Last year, which was the CPI base year, the price of juice was $44 a bottle, the price of cloth was $55 a length, and the average urban household spent $20 on juice and $45 on cloth. This year, the price of juice is $88 a bottle and the price of cloth is $66 a length. What is the CPI in the current year?
The CPI in the current year is 144.6.
Choose the statement that is incorrect. A. The United States and Great Britain were the only countries who suffered the Great Depression. B. The Great Depression began in October 1929. C. 1933, 25 percent of the labor force was unemployed. D. 1930s were and remain the longest and worst period of high unemployment in history.
The United States and Great Britain were the only countries who suffered the Great Depression.
Choose the statement that is incorrect. A.Many private agreements, such as wage contracts, are linked to the CPI. B.The bias in the CPI decreases government outlays.outlays. C.The chained CPI overcomes the sources of bias in the CPI. D. The CPI is just one of many alternative price level index numbers.
The bias in the CPI decreases government outlays.outlays.
Choose the statement that is incorrect. A. The unemployment rate includes all underutilized labor. B. A discouraged worker is a marginally attached worker who has stopped looking for a job because of repeated failure to find one. C. U-1 is the unemployment rate of those unemployed for 15 weeks or more. D. A marginally attached worker is a person who currently is neither working nor looking for work but has indicated that he or she wants and is available for a job and has looked for work sometime in the recent past.
The unemployment rate includes all underutilized labor.
The table provides some data on real GDP and the population of Iberia in 20102010 and 20112011. If the growth rates of 20112011 are maintained in future years, real GDP per person in Iberia will ______.
double by 2025
The unemployment that arises from normal labor turnover—from people entering and leaving the labor force— and from the ongoing creation and destruction of jobs is ______ unemployment.
frictional
When the unemployment rate is less than the natural unemployment rate, real GDP is ______ than potential GDP and the output gap is ______.
greater; positive
With 3.4 million marginally attached workers and 0.9 million of them discouraged workers, what are the characteristics of the other 2.5 million marginally attached workers? The other 2.5 million marginally attached workers _______.
have stopped looking for work for reasons other than their inability to find a job
If the only change that occurred was that people gave up job searching, then the labor force would _______ and unemployment would _______.
have decreased; have decreased
A person is not in the labor force if they are ______.
in the working-age population but neither employed nor unemployed
In March 2007, the U.S. unemployment rate was 4.4 percent. In August 2008, the unemployment rate was 6.1 percent. Assuming that the labor force remained constant between March 2007 and August 2008, then the number unemployed _______.
increased
In October 2009, the U.S. unemployment rate was 10.0 percent. In October 2011, the unemployment rate was 8.9 percent. Assuming that unemployment remained constant between October 2009 and October 2011, then the labor force ______.
increased
When the unemployment rate ______ the natural unemployment rate, real GDP ______ potential GDP.
is greater than; is less than
When the unemployment rate ______ the natural unemployment rate, real GDP ______ potential GDP.
is less than; is greater than
The natural unemployment rate _______.
is the unemployment rate at full employment
The natural unemployment rate _______.
is the unemployment rate when there is no cyclical unemployment
The unemployment rate is the percentage of the people in the _____ who are unemployed.
labor force
The unemployment rate is supposed to ______. It is an imperfect measure because ______.
measure underutilized labor; it does not include marginally attached workers and part-time workers who want full-time jobs
The main sources of bias in the CPI are ______. The bias in the CPI is a problem because ______ .
new goods bias, quality change bias, commodity substitution bias, and outlet substitution bias it distorts wage agreements linked to the CPI
If we count marginally attached workers as unemployed ______.
no change occurs in the employment-to-population ratio
Jobs Report: Hiring Up, Unemployment Down The Labor Department reported that hiring accelerated in November, and the unemployment rate fell to 8.6 percent from 9 percent in October. Two reasons for the fall are that more Americans got jobs, but even more people gave up on their job searches altogether. If the only change that occurred was that all the newly hired people had been unemployed in October, then the labor force would ______ and unemployment would _______.
not have changed; have decreased
The labor force is the number of people employed plus the _____.
number unemployed
If the CPI rises from 120 to 126, then ______.
on average, the price paid by urban consumers for a fixed basket of consumer goods and services rises by 5 percent
The working-age population is the total number of _____ aged _____ years and over who are not in jail, hospital, or some other form of institutional care or in the U.S. Armed Forces.
people; 16
4. How will the labor force participation rate change if Kevin starts creating football apps in his garage and they turn out to be very popular? The labor force participation will _____ Kevin starts creating football apps in his garage and they turn out to be very popular.
rise
The natural unemployment rate _______.
s the unemployment rate at full employment
the unemployment that arises when changes in technology or international competition change the skills needed to perform jobs or change the location of jobs is ______ unemployment.
structural
fishing industry decreases travel industry increases
structural unemployment increases
If we count marginally attached workers as unemployed ______.
the labor force participation rate rises
The labor force participation rate is the percentage of the _____ who are members of the labor force.
working-age population