Week 5 Quiz

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Question #1

With regard to the economy, the term negative inflation is synonymous with which of the following?

A deflation

B hyperinflation

C recession

D depression

Question #2

What distinguishes the real value of a statistic from the nominal value of a statistic?

A timing of announcement

B real interest rate

C adjusting for GDP deflator

D adjusting for inflation

Question #3

When Anders took out his first two-year membership with Maxima Gym in 2004, the fee was $540.00. He renewed his membership three times; in 2006 for $580.00, in 2008, for $600.00, and again in 2010, for $630.00. What is the overall rate of inflation for Anders’ gym membership?

A 8.6%

B 7.87%

C 16.66%

D 5.4%

Question #4

The GDP deflator is a price index that includes the following components of GDP:

A Consumption plus Investment but not Exports

B Consumption, Investment plus Exports minus Imports

C Consumption, Investment, Government plus Exports minus Imports

D Consumption

Question #5

The effects of inflation are seen in:

A services and wages only

B wages and income levels only

C goods, services, wages and income levels

D goods and services only

Question #6

The percentage change in the price level from one time period to the next, whether the price level is measured in terms of money or as a price index, will be the _____________.

A producer price Index

B consumer price index

C inflation rate

D price index rate

Question #7

Another term used to describe negative inflation is:

A deflation

B counter inflation

C hyperinflation

D GDP deflator

Question #8

In the 1970s and 1980s, labor unions commonly negotiated wage contracts that had _______________________ which guaranteed that their wages would keep up with inflation.

A wage protection clauses

B inflation protection plans

C inflation ceiling guarantees

D cost of living adjustments

Question #9

Nancy’s union has negotiated a three-year wage contract that provides for a 2.4% increase indexed to inflation. The rates of inflation are forecast to be 1.62%, 1.93% and 2.21% respectively. How will Nancy’s wage increase be expressed in the new contract?

A COLA plus 2.4%

B COLA plus 2.2%

C COLA plus 1.9%

D COLA plus 1.6%

Question #10

What name is given to the index based on the prices of exported or imported merchandise?

A International Trade Index

B International Price Index

C U.S. Producer Price Index

D U.S. Producer Trade Index

Question #11

The extent of _______________________ will depend on how easy it is for workers to learn about alternative jobs, which may reflect the ease of communications about job prospects in the economy.

A cyclical employment

B cyclical unemployment

C seasonal unemployment

D frictional unemployment

Question #12

Freelife, New Hampshire has a labor force of 78,567 persons and employment of 74,382. The unemployment rate for the city is:

A 7.1%

B 5.3%.

C 6.0%.

D 5.6%.

Question #13

The unemployment rate in a town in which 65,400 persons are employed and 11,000 are unemployed equals:

A 11%.

B 16.8%.

C 20.2 %.

D 14.4%.

Question #14

If the unemployment rate is 6 percent and the number of persons unemployed is 6 million, then the number of people employed is equal to:

A 6 million.

B 106 million.

C 94 million.

D 100 million.

Question #15

Insofar as government public policy is concerned, the best way to battle unemployment would be __________________.

A to maximize unemployment insurance duration

B to minimize labor unions

C to minimize recessions

D to maximize unemployment payments

Question #16

Each month the Census Bureau carries out the Current Population Survey (CPS) (which has been carried out every month since 1940). A total of __________ households are contacted every month.

A 6000

B 600

C 60,000

D 600,000

Question #17

Through good economic years and bad, many European economies had unemployment rates hovering near _________ since the 1970s.

A 10%

B 5%

C 1%

D 20%

Question #18

Karen chooses to go to university fulltime rather than to work. Karen:

A is part of the labor force and what economists call a discouraged worker.

B is not part of the labor force.

C is considered employed.

D is part of the labor force, but not actively seeking work.

Question #19

During the Great Depression of the 1930s, the unemployment rate reached more than _________ of the labor force.

A 25%

B 85%

C 65%

D 45%

Question #20

In November 2010 the labor force in Siouxtown, was 14,800. There were 14,483 persons employed. The local unemployment rate:

A was 1.2%.

B was 5.6%.

C was 2.1%.

D was 7.1%.

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