Question 1
0.1 / 0.1 pts
In November 2010 the labor force in Siouxtown, was 14,800. There were 14,483 persons employed. The local unemployment rate:
was 1.2%.
Correct!
was 2.1%.
was 5.6%.
was 7.1%.

Question 2
0.1 / 0.1 pts
On Coral Island in 2012, the labor force is 12,000, the unemployment rate is 10 percent, and the labor force participation rate is 60 percent. During 2013, 200 unemployed people found jobs and the working-age population increased by 1,000. The total number of people in the labor force did not change.

The working-age population at the end of 2013 was _______.

The unemployment rate at the end of 2013 was ________. Round up to the second decimal.

The labor force participation rate at the end of 2013 was _________. Round up to the second decimal.

Correct!
21,000; 8.33; 57.14
21,000; 5.68; 67.54
21,200; 8.33; 54.15
none of the above

Question 3
0.1 / 0.1 pts
Suppose that everyone who has looked for a job for more than six months gave up in despair and stopped looking. What would happen to the unemployment rate?
It would increase.
Correct!
It would fall.
It would not change.
It would change, but the effect cannot be predicted.

Question 4
0.1 / 0.1 pts
The unemployment rate may overestimate the true extent of unemployment if:
many part-time employees would like to work fulltime, but are unable to get the additional work.
many people who claim to be unemployed actually work in the underground economy.
people falsely claim that they are actively seeking work in order to receive unemployment benefits.
Correct!
either B) or C) occurs.

Question 5
0.1 / 0.1 pts
A forestry worker who is out of work because of the temporarily low demand for wood products associated with a recession is defined as:
Correct!
cyclically unemployed.
underemployed.
frictionally unemployed.
naturally unemployed.

Question 6
0.1 / 0.1 pts
The unemployment rate fluctuates around the natural unemployment rate because​ _______ during a recession and​ ___________ during an expansion.

frictional unemployment​ increases; decreases
Correct!
cyclical unemployment​ increases; decreases
structural unemployment​ increases; decreases
cyclical unemployment​ decreases; increases
frictional unemployment​ decreases; increases

Question 7
0.1 / 0.1 pts
When the unemployment rate​ ______ the natural unemployment​ rate, real GDP​ ______ potential GDP.
equals; is less than
is less than; is less than
Correct!
equals​; equals
equals; is greater than

Question 8
0 / 0.1 pts
The people on Coral Island buy only berries and fish. The CPI basket contains the quantities bought in 2008.

The average household spent $50 on berries and $70 on fish in 2008 when the price of berries was $5 a pound, and the price of fish was $10 a pound.

In the current​ year, 2009, berries are still $5 a pound and fish is $8 a pound.

CPI in 2009 was ______. Round up your answer to a full number. The inflation rate in 2009 was ______ percent. Round up your answer to a full number.

You Answered
130; 30
88; 12
Correct Answer
88; -12
188; 8.8
First find the quantities in the basket in the base year. Second, use those same quantities (since the basket is fixed) to find the spending for each item in the following year. Third, use the CPI formula to find the value of the CPI. Use the inflation formula to find the value of inflation, and keep in mind that the CPI for the base year equals 100.

Question 9
0 / 0.1 pts
The table below shows the CPI in the U.S.

Year

CPI

2005

195.3

2006

201.6

2007

207.3

2008

215.3

2009

214.5

2010

218.1

2011

224.9

2012

229.6

2013

233.0

2014

236.7

2015

237.0

Source: Bureau of Labor Statistics

After performing all the needed calculations fill in the blanks:

The price level ________ in 2009 in comparison with 2008. The inflation rate ___________in 2009 in comparison with 2008.

You Answered
rose; increased
fell; increased
rose; decreased
Correct Answer
fell; decreased

Question 10
0 / 0.1 pts
The table below shows the CPI in the U.S.

Year

CPI

1986

109.6

1987

113.6

1988

118.3

1989

124.0

1990

130.7

1991

136.2

1992

140.3

1993

144.5

1994

148.2

1995

152.4

1996

156.9

1997

160.5

1998

163.0

1999

166.6

2000

172.2

2001

177.1

2002

179.9

2003

184.0

2004

188.9

2005

195.3

2006

201.6

2007

207.3

2008

215.3

2009

214.5

2010

218.1

2011

224.9

2012

229.6

2013

233.0

2014

236.7

2015

237.0

Source: Bureau of Labor Statistics

Calculate the inflation rates in 2011 and 2014.

Inflation rate in 2011 was ______. Inflation rate in 2014 was ______.

3.6; 1.62
0.36; 0.12
Correct Answer
3.16; 1.62
You Answered
-0.36; 0.12

Question 11
0.1 / 0.1 pts
The reference base period is a period for which the​ _____ is defined to equal​ _____. Currently, the reference base period is​ 1982-1984.

Correct!
CPI; 100
inflation rate; 1 percent
interest rate; 1 percent
PPI; 110

Question 12
0.1 / 0.1 pts
Look at the following chart summarizing NGDP and RGDP for the U.S. in billions of dollars.

Year

NGDP

RGDP

2000

10,284.8

12,559.7

2001

10,621.8

12,682.2

2002

10,977.5

12,908.8

2003

11,510.7

13,271.1

2004

12,274.9

13,773.5

2005

13,093.7

14,234.2

2006

13,855.9

14,613.8

2007

14,477.6

14,873.7

2008

14,718.6

14,830.4

2009

14,418.7

14,418.7

2010

14,964.4

14,783.8

2011

15,517.9

15,020.6

2012

16,155.3

15,354.6

2013

16,663.2

15,583.3

2014

17,348.1

15,961.7

2015

17,942.9

16,345.0

Source: Bureau of Economic Analysis

In 2013 the GDP deflator was ________. Round up your answer to a full number. It ________ in comparison with the GDP deflator in 2012.

Correct!
107; increased
110; decreased
112; increased
107; stayed the same
GDP Deflator = 100*NGDP/RGDP. Use this formula for both years in order to compare the two numbers for the second part of the question.

Question 13
0.06 / 0.06 pts
Suppose that the base year is 2009. Real GDP in 2009 was​ $10 trillion​ (in 2009 dollars). The GDP deflator in 2013 was​ 112, and real GDP in 2013 was​ $11 trillion​ (in 2009 dollars). What was the percentage increase in RGDP between 2009 and​ 2013? By what percentage did the cost of living (as measured from GDP Deflator) rise between 2009 and​ 2013?

NGDP in 2013 was _____trillion. Round up your answer to the second decimal. The percentage increase in production (RGDP) between 2009 and 2013 is _____ percent. The cost of living (as measured from GDP Deflator) between 2009 and​ 2013 rose by ______ percent.

Correct!
12.32; 10; 12
12.32; 1; 1.2
1.23; 10; 1.2
12.32; 10; 1.2
Well done! (1) GDP Deflator = 100*NGDP/RGDP. Use this formula to find NGDP in 2013. (2) Use the growth rate formula to calculate the percentage change in production (X1 = RGDP in 2009, and X2 = RGDP in 2013). (3) Keep in mind that GDP Deflator in 2009 = 100, because the base year is 2009. Use the growth rate formula for the GDP Deflator to find the percentage increase in the cost of living (X1 = GDP Deflator in 2009, and X2 = GDP Deflator in 2013).

Question 14
0.01 / 0.01 pts
An economics professor is discussing a measure of inflation over time based on a basket of goods comprised of all the components of GDP. Which measure is it?
Consumer Price Index
GNP Price Index
Consumer GDP
Correct!
GDP Deflator

Question 15
0.01 / 0.01 pts
You deposit​ $200 in a savings account on January​ 1, and the bank pays you interest of​ $10 at the end of the year. During the​ year, the average price level rises by 2 percent. The real interest rate on your savings account is​ ______ percent.

Correct!
3
5
8
none of the above

Question 16
0.01 / 0.01 pts
XYZ company agreed to pay its workers $40 an hour in 1999 and $43 an hour in 2001. The CPI in 1999 was 166 and in 2001 was 180.

Calculate the real wage rate in each year​ (to the nearest​ cent). Did these workers really get a pay raise between 1999 and​ 2001? Round up your answer to the second decimal.

The real wage rate in 1999 was $ _____. The real wage rate in 2001 was $ _____.

24.10; 24; did not
24.10; 25.00; did
24.10; 25.00; did not
Correct!
24.10; 23.89; did not
First find the real wage for each year using the formula: real wage = (100*nominal wage)/CPI. Then compare the two real wages to find out if workers indeed got a pay raise (i.e., if the real wage increased in 2001 compared to 1999).

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