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Exam 5: Monitoring Jobs and Inflation

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Question 191

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Recessions and expansions affect most strongly which type of unemployment?

A) frictional unemployment
B) structural unemployment
C) cyclical unemployment
D) seasonal unemployment

E) B) and D)
F) B) and C)

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Question 192

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In August 2012,40 percent of unemployed workers had been unemployed for 6 months or more.This long-term unemployment is of particular concern because

A) long-term unemployment is the most costly type of unemployment.
B) the U-3 unemployment rate no longer includes these workers in the measurement since they are long-term unemployed.
C) the employment-to-population ratio no longer includes these workers in the measurement since they are long-term unemployed.
D) the labor force participation rate no longer includes these workers in the measurement since they are long-term unemployed.

E) B) and C)
F) A) and C)

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Question 193

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In August 2012,the official U-3 unemployment rate dropped from 8.3 percent to 8.1 percent. This change could have been caused by

A major characteristic of structural unemployment that differentiates it from frictional unemployment is that structural unemployment

Frictional unemployment is

If the economy enters an expansion,

If the basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year,the CPI for the latter year equals

If the CPI at the end of last year was 100 and the CPI at the end of this year was 115,the inflation rate was

Unlike cyclical unemployment,both frictional and structural unemployment rise during recessions and fall during expansions.

2012 2013 $\begin{array} { | l | c | c | c | c | } \hline \text { Item } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \\\hline \text { Books } & 10 & \$ 30 & 8 & \$ 50 \\\hline \text { Pens } & 20 & \$ 1 & 15 & \$ 2 \\\hline\end{array}$ -In 2012,consumers in Dexter consumed only books and pens.The prices and quantities for 2012 and 2013 are listed in the table above.The reference base period for Dexter's CPI is 2012.What is the CPI in 2013?

The cost of inflation to society includes I. the opportunity costs of resources used by people to protect themselves against inflation. II) the diversion of productive resources to forecasting inflation.

Inflation in Vietnam rose to 27 percent in July 2008- the highest inflation rate in Asia. "Squeezed on all sides,people are cutting back on food,limiting travel,looking for second jobs,delaying major purchases and waiting for the cost of a wedding to go down before marrying...Given this slowdown,Vietnam...is scaling back its plans for growth and economic development....Some are losing confidence in the ability of the government to manage the economy.And rumors of price increases have caused panic buying of fuel and rice." www.nytimes.com,8/23/2008 The story provides an example of how inflation

Explain what type of unemployment changes with the business cycle and how it changes.

The labor force is defined as the

2012 2013 $\begin{array} { | l | c | c | c | c | } \hline \text { Item } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \\\hline \text { Books } & 10 & \$ 30 & 8 & \$ 50 \\\hline \text { Pens } & 20 & \$ 1 & 15 & \$ 2 \\\hline\end{array}$ -In 2012,consumers in Dexter consumed only books and pens.The prices and quantities for 2012 and 2013 are listed in the table above.The reference base period for Dexter's CPI is 2012.What is the CPI in 2012?

$\begin{array}{c}\begin{array}{|l|}\hline \text {Person A }\\\\\\\hline \text {Person \( \mathrm{B} \) }\\\\\hline \text {Person C}\\\\\\\hline \text {Person D}\\\\\\\\\\\\\hline\end{array}\begin{array}{l|}\hline \text {Now that the kids are in school for a full day,this}\\\text { person is looking for work and has interviewed for }\\\text {three jobs during the past two weeks.}\\\hline \text {This person has been laid off from a job but expects}\\\text { to be called back as soon as the economy improves.}\\\hline \text {This person has just graduated from college and}\\\text { will start a new job in three weeks. In the meantime }\\\text {this person will tour the great American beaches.}\\ \hline \text {This person was laid off last year when new}\\ \text {equipment was installed at the plant, reducing the}\\ \text { number of workers needed. Shortly after being laid}\\ \text { off, this person looked for a new job, was unable to}\\ \text { find one and then stopped looking, even though this }\\ \text {person still wants a job and is available for work.}\\\hline \end{array}\end{array}$ -The above table shows answers given by people interviewed in a government survey of households.Which individuals are considered to be a part of the labor force?

Which of the following means that the CPI overstates the actual inflation rate?

When economists speak of full employment,they refer to the case in which the sum of frictional and structural unemployment is

Of the following sequences of price levels,which correctly represents a 5 percent inflation rate?

The employment-to-population ratio is