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ECO201 Chapter 6 Exam Solution

ECO201 Chapter 6 Exam Solution • Question 1 0 out of 1 points For all practical purposes, a discouraged worker is an unemployed person... [Show More] because a discouraged worker is not working. Selected Answer: True Answers: True False • Question 2 0 out of 1 points Suppose that 1982 is the base year for the Consumer Price Index (CPI) and in 2014 the CPI was 190. What does this "190" mean? Selected Answer: a. What cost $100 in 1982 on average cost 0.19 times as much in 2014 (that is, it cost $19 in 2014). Answers: a. What cost $100 in 1982 on average cost 0.19 times as much in 2014 (that is, it cost $19 in 2014). b. What cost $100 in 1982 on average cost 190 times as much in 2014. c. What cost $100 in 1982 on average cost $19 more in 2014. d. What cost $100 in 1982 on average cost $190 in 2014. • Question 3 1 out of 1 points Exhibit 6-2 Civilian Civilian Employed Noninstitutional Labor Force Persons Year Population (millions) (millions) (millions) 1 250 200 175 2 400 300 200 3 500 400 350 4 1000 800 720 Refer to Exhibit 6-2. The labor force participation rate in year 4 is Selected Answer: a. 80 percent. Answers: a. 80 percent. b. 12 1/2 percent. c. 72 percent. d. 30 percent. e. 87 1/2 percent. • Question 4 1 out of 1 points If the CPI is 100 in the base year and 108 in the current year, how much did prices rise between the base year and the current year? Selected Answer: d. 8 percent Answers: a. 80 percent b. 108 percent c. 1.08 percent d. 8 percent e. 0.08 percent • Question 5 1 out of 1 points A plumber who quits his job in Indianapolis and moves to Orlando where additional plumbers are needed is said to be ___________________ unemployed Selected Answer: c. frictionally Answers: a. underemployed b. cyclically c. frictionally d. structurally • Question 6 0 out of 1 points Suppose the market basket consists of 100X, 200Y, and 300Z. Current-year prices are $5 for each unit of X, $2 for each unit of Y, and $3 for each unit of Z. Base-year prices are $2 for each unit of X, Y, and Z. What is the approximate CPI in the current year? Selected Answer: b. 70.20 Answers: a. 150 b. 70.20 c. 15 d. 1,200 • Question 7 1 out of 1 points Exhibit 6-2 Civilian Civilian Employed Noninstitutional Labor Force Persons Year Population (millions) (millions) (millions) 1 250 200 175 2 400 300 200 3 500 400 350 4 1000 800 720 Refer to Exhibit 6-2. How many unemployed persons are there in year 1? Selected Answer: d. 25 million Answers: a. 200 million b. 75 million c. 175 million d. 25 million e. 50 million • Question 8 1 out of 1 points The cyclical unemployment rate is defined as the __________ unemployment rates. Selected Answer: a. difference between the existing (actual) and the natural Answers: a. difference between the existing (actual) and the natural b. sum of the natural and the frictional c. sum of the structural and the frictional d. difference between the structural and the frictional • Question 9 1 out of 1 points Jones lost his job in industry A, but he has skills that can be transferred to industry B (which is currently hiring). Smith lost a job in industry C, but his skills cannot be transferred to industry B or to any other industry. Jones is __________ unemployed and Smith is __________ unemployed. Selected Answer: d. frictionally; structurally Answers: a. structurally; structurally b. structurally; frictionally c. frictionally; frictionally d. frictionally; structurally • Question 10 1 out of 1 points A person in the civilian labor force falls into one of two categories: Selected Answer: b. unemployed or employed. Answers: a. disemployed or unemployed. b. unemployed or employed. c. a self-employed worker or a non-self-employed worker. d. a person who works in a service industry or a person who works in a manufacturing industry. • Question 11 1 out of 1 points If the Bureau of Labor Statistics considers Jessica to be a discouraged worker, then she is not counted as unemployed for purposes of computing the official unemployment rate. Selected Answer: True Answers: True False • Question 12 1 out of 1 points Discouraged workers are not counted as unemployed because they are working. Selected Answer: False Answers: True False • Question 13 1 out of 1 points In year 1 the CPI is 181, and in year 2 the CPI is 195. If Dennis's salary was $95,000 in year 1, what is the minimum salary he must earn in year 2 to "keep up with inflation"? Selected Answer: a. $102,348 Answers: a. $102,348 b. $112,500 c. $105,750 d. $88,180 • Question 14 0 out of 1 points Which of the following statements is false? Selected Answer: b. Cultural differences may help to explain why some men have difficulty finding jobs in some sectors of the modern economy. Answers: a. Changes in technology can lead to changes in the ways in which people are employed. b. Cultural differences may help to explain why some men have difficulty finding jobs in some sectors of the modern economy. c. In recent years, the demand for workers in the manufacturing sector has grown dramatically compared to the demand for workers in the service sector. d. Some people may be at a loss as to what skills are required of them in the current labor market. • Question 15 0 out of 1 points Exhibit 6-2 Civilian Civilian Employed Noninstitutional Labor Force Persons Year Population (millions) (millions) (millions) 1 250 200 175 2 400 300 200 3 500 400 350 4 1000 800 720 Refer to Exhibit 6-2. The labor force participation rate in year 1 is Selected Answer: c. 87 1/2 percent. Answers: a. 12 1/2 percent. b. 70 percent. c. 87 1/2 percent. d. 80 percent. e. 10 percent. • Question 16 1 out of 1 points Suppose there are 200 million persons in the population, 120 million persons in the civilian labor force, and 90 million persons are employed. The number of persons unemployed is _______ million and the unemployment rate is ___________ percent. Selected Answer: b. 30; 25 Answers: a. 30; 33 b. 30; 25 c. 30; 5 d. 80; 40 • Question 17 1 out of 1 points Suppose there are five goods in the economy, A-E. The current-year quantity of each is 10A, 20B, 30C, 40D, and 50E. Current-year prices are $1 for each unit of A, $2 for each unit of B, $3 for each unit of C, $4 for each unit of D, and $5 for each unit of E. Base-year prices are $1 for each good. Real GDP in the current year equals Selected Answer: a. $150. Answers: a. $150. b. $550. c. $100. d. $130. e. $180. • Question 18 1 out of 1 points Assume that Ms. Sawyer's salary is $42,000, up from $40,000 last year, while the CPI is 157.5 this year, up from 150 last year. This means that Ms. Sawyer's real income has Selected Answer: c. stayed the same. Answers: a. It depends on which year is the base year. b. decreased. c. stayed the same. d. increased. • Question 19 1 out of 1 points Exhibit 6-2 Civilian Civilian Employed Noninstitutional Labor Force Persons Year Population (millions) (millions) (millions) 1 250 200 175 2 400 300 200 3 500 400 350 4 1000 800 720 Refer to Exhibit 6-2. The employment rate in year 3 is Selected Answer: a. 70 percent. Answers: a. 70 percent. b. 12 1/2 percent. c. 33 1/3 percent. d. 66 2/3 percent. e. 25 percent. • Question 20 1 out of 1 points If a person did any work as a paid employee during the Bureau of Labor Statistics survey reference week, how is she classified? Selected Answer: e. a and d Answers: a. as an employed person b. as not in the labor force c. as an unemployed person d. as part of the labor force e. a and d • Question 21 1 out of 1 points Look at the following data: The frictional unemployment rate is 2 percent, the structural unemployment rate is 3.5 percent, and the actual unemployment rate is 9.5 percent. The natural unemployment rate is ____________ percent and the cyclical unemployment rate is __________ percent. Selected Answer: d. 5.5; 4 Answers: a. 6; 15 b. 1.5; 6 c. 1.5; 4 d. 5.5; 4 • Question 22 1 out of 1 points Exhibit 6-2 Civilian Civilian Employed Noninstitutional Labor Force Persons Year Population (millions) (millions) (millions) 1 250 200 175 2 400 300 200 3 500 400 350 4 1000 800 720 Refer to Exhibit 6-2. How many persons are not in the labor force in year 2? Selected Answer: a. 100 million Answers: a. 100 million b. 200 million c. 75 million d. 50 million e. 175 million • Question 23 1 out of 1 points Exhibit 6-2 Civilian Civilian Employed Noninstitutional Labor Force Persons Year Population (millions) (millions) (millions) 1 250 200 175 2 400 300 200 3 500 400 350 4 1000 800 720 Refer to Exhibit 6-2. The unemployment rate in year 3 is Selected Answer: e. 12 1/2 percent. Answers: a. 33 1/3 percent. b. 50 percent. c. 66 2/3 percent. d. 25 percent. e. 12 1/2 percent. • Question 24 1 out of 1 points Structural unemployment results primarily from automation and long-lasting changes in demand. Selected Answer: True Answers: True False • Question 25 1 out of 1 points The cyclical unemployment rate can never be negative. Selected Answer: False Answers: True False [Show Less]

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