Practice Quiz 2 (2015-17)

Quiz: Practice Quiz 2 (2015-17)

# Correct Answers: 15 # Incorrect Answers: 10 # Blank Answers:0 Points Awarded: 14

QNo Question1 Economists define the unemployed as individuals who are

0 I do not want to answer this Question

1 not currently working.

2 not currently working but are actively looking for work.

3 working but looking for different job.

4 working less than their desired amount of time.

5 none of the above.

Correct Answer: 2 Your Answer: 4 Points Awarded: -0.1

2 The unemployment rate is the number of unemployed people


1 divided by the number of people who are working.

2 divided by the total working-age population.

3 divided by the sum of the number of people who are working and the number of people who are looking for work.

4 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.



3 People who are only working part-time, but want to be working full-time, are classified officially as


1 unemployed and in the labor force.

2 unemployed and out of the labor force.

3 employed and in the labor force.

4 employed and out of the labor force.

5 none of the above

Correct Answer: 3 Your Answer: 3 Points Awarded: 1

4 For the purpose of statistically reporting the unemployment rate, "discouraged workers," are


1 counted.

2 not counted.

3 offered other jobs.

4 trained to do different work.

5 none of the above


5 People who want to work but have stopped looking for work because they could not find jobs after actively searching are called


1 employed.

2 unemployed.

3 discouraged workers.

4 empowered.

5 none of the above


6 In December 2008, the U.S. labour force consisted of 154,447,000 employed and 11, 100, 000 unemployed. The U.S. unemployment rate for December 2008 was about


1 6.1 per cent

2 6.3 per cent

3 7.2 per cent

4 8.4 per cent

5 none of the above


7 The unemployment rate


1 rises during booms and falls during recessions.

2 rises during recessions and falls during booms.

3 rises during times of rapid economic growth and falls during times of slow economic growth.

4 tends to remain the same in books and recessions.

5 none of the above


8 Customer service representatives who have lost their jobs as a result of call centers being out-sourced to India are an example of


1 structural unemployment.

2 cyclical unemployment.

3 frictional unemployment.

4 voluntary unemployment.

5 none of the above


9 _ unemployment occurs due to a mismatch between the jobs that are available and the skills of workers seeking jobs.


1 Structural

2 Cyclical

3 Frictional

4 Voluntary

5 None of the above


10 When displaced workers require retraining before entering the labour force again, it is the result of _ unemployment.


1 cyclical

2 frictional

3 structural

4 seasonal

5 voluntary


11 In periods when GDP fails to grow at its normal rate, the actual unemployment rate will be __ than the natural rate of unemployment.


1 lower

2 higher

3 the same

4 failing faster

5 none of the above


12 Actual unemployment can exceed the natural rate of unemployment due to


1

2

3

4

5


13 The consumer Price Index (CPI) relies on the calculation of


1 prices of a fixex basket of goods that does not change often.

2 prices of a variable basket of goods that changes frequently.

3 the components of GDP that change annually.

4 the components of GDP that do not change frequently.

5 none of the above


14 Cost-of-living adjustments are


1 automatic wage changes based n the CPI which are included in some union contracts.

2 changes in the basket of goods used in calculating the CPI.

3 averages of neighbouring years' base prices used in constructing the CPI.

4 quality measuements included in the calculation of the CPI.



15 According to this application (Application 4, Using the CPI to Adjust Social Security Benefits) if we are overcompensating the elderly for price changes with their social security payments, then this would


1 increase their benefits in real terms.

2 decrease their benefits in real terms.

3 not change their benefits in real terms.

4 decrease their benefits in nominal terms.



16 Union contracts with built-in cost-of-living adjustments and home mortgages that vary with the rate of inflation are:


1 inappropriate ways of combating inflation.

2 examples of bracket creep.

3 means of implementing fiscal policy.

4 steps that can be taken to decrease the adverse impacts of inflation.

5 examples of failed discarded policies of the 1970s.


17 Price indexes like the CPI are calculated using a base year. The term base year refers to:


1 the first year that price data are available.

2 any year in which inflation was higher than 5 percent.

3 the most recent year in which the business cycle hit the trough.

4 an arbitrarily chosen reference year.



18 Suppose the consumer price index (CPI) stands at 250 this year. If the inflation rate is 10 per cent, then next year's CPI will equal:


1 250.

2 260.

3 275.

4 500.



19 Consider an economy with only two goods: bread and wine. In 1982, the typical family bought 4 loaves of bread at 50c per loaf and 2 bottles of wine for $9 per bottle. In Year X, bread cost 75c per loaf and wine cost $10 per bottle. The CPI for Year X (using a 1982 base year) is:


1 100.

2 115.

3 126.

4 130

5 none of the above


20 Which of the following statements is true?


1 Deflation is an increase in the general level of prices.

2 The consumer price index (CPI) measurs changes in the average prices of consumer goods and services.

3 disinflation is an increase in the rate of inflatin.

4 real income is the actual number of dollars received over a period of time.

5 The real interest rate equals the nominal rate of interest plus the inflation rate.


21 Suppose we shopped for a basket of goods in Year 1 and it cost $350. Suppose the same basket of goods adds up to $385 in year 2. If we use Year 1 as a base year, what would be the Year 2 CPI.


1 35.

2 90.

3 100.

4 110.

5 135.


22 Deflation:


1 was prevalent during the oil shocks of the 1970s.

2 unde the current trends will cause consumers' purchasing power to shrink.

3 has been persistent in the U.S. economy since the Great Depression.

4 all of the above.

5 none of the above


23 Disinflation means a decrease in:


1 the rate of inflation.

2 the general level of prices in the economy.

3 the prices of all products in the economy.

4 the circulation flow.



24 Which of the following statements would come from someone classified as unemployed?


1 I'm not working because I'm going to Jamaica with my buddy.

2 I haven't had a job in a year, and I stopped looking for a job nine months ago.

3 I'm a full-time student at the University of Illinois who doesn't have time to work.

4 I can't stand my current job as a telemarketer. I used to be a nuclear engineer.

5 I'm not working. I had three interviews this week, and I'm trying to find a job.


25 Brian Vargo, an auto repair mechanic who remains unemployed because he refuses to work for less than $1,000 an hour, is:


1 counted as part of the labour force.

2 considered frictionally unemployed.

3 an underemployed worker.

4 not counted as part of the labour force.

5 considered as productively active.


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Practice Quiz 2 (2015-17)