Question 1
6.25 / 6.25 pts
Freelife, New Hampshire has a labor force of 78,567 persons and employment of 74,382. The unemployment rate for the city is:
5.3%
5.6%
6.0%
7.1%

Question 2
6.25 / 6.25 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%.
was 2.1%.
was 5.6%.
was 7.1%.

Question 3
6.25 / 6.25 pts
A university student who is enrolled in school fulltime and not seeking employment is considered:
out of the labor force.
unemployable, and not counted in official statistics.
employed in leisure.
underemployed.

IncorrectQuestion 4
0 / 6.25 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.
either B) or C) occurs.

Question 5
6.25 / 6.25 pts
Read the following article excerpts:

Band of America cutbacks may hit 40,000 (Source: The Wall Street Journal, Sept 9, 2011) Bank of America officials have discussed eliminating about 40,000 positions during the first wave of arestructuring, as it closes branches in response to the growth of online banking.

Postal Service targets 220,000 job cuts (Source: The Wall Street Journal, Aug 12, 2011) The U.S. Postal Service plans to reduce its workforce by 220,000 jobs to remedy its dire financial situation. The Postal Service, financed mostly by postage, has been struggling as a result of the economic slowdown.

Answer the following question. The cut in employment at Bank of America results in ______ unemployment. The cut in employment at the U.S. Postal Service results in ______ unemployment.

frictional; frictional
structural; structural
cyclical; structural
cyclical; cyclical
structural; cyclical

Question 6
6.25 / 6.25 pts
The natural unemployment rate is not zero because natural unemployment includes​ _______.
frictional and structural unemployment
discouraged workers
frictional and cyclical unemployment
cyclical unemployment
cyclical and structural unemployment

Question 7
6.25 / 6.25 pts
When the unemployment rate​ ______ the natural unemployment​ rate, real GDP​ ______ potential GDP.
equals; is less than
is less than; is less than
equals​; equals
equals; is greater than

IncorrectQuestion 8
0 / 6.25 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.

130; 30
88; 12
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
6.25 / 6.25 pts
In​ Canada, the reference base period for the CPI is 2002. By​ 2012, prices had risen by 21.6 percent since the base period. The inflation rate in Canada in 2013 was 1.1 percent. Calculate the CPI in Canada in 2013.

Hint: Use the information that “prices had risen by 21.6 percent since the base period” to find the CPI in 2012. Use the inflation rate formula (inflation is the growth rate of the CPI) to find CPI in 2013, knowing the CPI in 2012 and the inflation rate.

The CPI in Canada in 2013 is _____. Round up your answer to the first decimal.

122.9
130.7
119.6
110.5

Question 10
6.25 / 6.25 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
3.16; 1.62
-0.36; 0.12

Question 11
6.25 / 6.25 pts
The reference base period is a period for which the​ _____ is defined to equal​ _____. Currently, the reference base period is​ 1982-1984.

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

Question 12
6.25 / 6.25 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.

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
6.25 / 6.25 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.

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
6.25 / 6.25 pts
The core inflation rate is​ ______.

unrelated to the Personal Consumption Expenditure deflator
greater than the total PCE inflation rate
the rate of increase in the Personal Consumption Expenditure deflator excluding the prices of food and​ fuel, which the Fed attempts to keep at zero percent a year
the annual percentage change in the Personal Consumption Expenditure deflator excluding the prices of food and fuel

Question 15
6.25 / 6.25 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.

3
5
8
none of the above

Question 16
6.25 / 6.25 pts
XYZ company agreed to pay its workers $41 an hour in 1999 and $45 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; 25; did not
24.70; 25.00; did not
24.70; 25.00; did
24.00; 25.00; did
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).