Explain how the unemployment rate is calculated

1. 10%

1. 18.75%

1. 7.15%

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20%*

30%

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6.4.0.3 What is the formula with which to calculate the official unemployment rate?

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  The number in the labor force divided by the population
  
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  The number of unemployed workers divided by the sum of employed and unemployed workers*
  
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  The number of discouraged workers divided by the number of civilian workers
  
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  The number of people seeking work divided by the number quitting their jobs
  

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  out of the labor force.*
  
• 
  unemployed.
  
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  employed in the underground economy.
  
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  underemployed.
  

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  32%
  

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  25%*
  
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  20%
  
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  8%
  

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  Percent of the adult population in the labor force who are unemployed.*
  
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  Percent of the adult population who are unemployed.
  
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  Percent of the adult population not in the labor force.
  

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  8 percent of the population is unemployed.
  
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  8 percent of the labor force is unemployed.*
  
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  the number of unemployed persons equals 8 percent of the employed persons.
  

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  a depression*
  
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  a prolonged war
  
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  competition*
  

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overlooking people who are working in the informal (underground) economy.

not capturing instances when skills are underutilized by the workplace.*

considering discouraged workers to be out of the labor force.*

including people who are working in the informal (underground) economy.

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6.4.a.3 Complete the following sentence. Calculations of the official unemployment rate exclude:

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  labor force
  
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  employed
  
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  discouraged workers*
  
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  unemployed, but seeking work
  

Cyclical unemployment*

Seasonal unemployment

Frictional unemployment

Structural unemployment

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  Cyclical
  
• 
  Seasonal
  
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  Frictional
  
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  Structural*
  

potential real GDP is less than current real GDP.

current real GDP Is less than potential real GDP.*

wages cannot adjust downward quickly and easily.*

wages respond instantaneously to labor market shifts.

// Content Page – Reading: Changes in Unemployment Over the Long Run

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6.5.0.3 A contraction in the business cycle is likely to result in which form of unemployment increasing?

frictional

cyclical*

seasonal

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6.5.0.4 Which form of unemployment suggests workers need to seek education and training and to update their skill sets?

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  Functional
  
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  Cyclical
  
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  Structural*
  
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  Seasonal
  

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  falls : rises*
  
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  rises : falls
  
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  rises : rises
  

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sticky prices.*

market prices.

market structure prices.

// Content page - Reading: Changes in Unemployment over the Short Run
6.5.0.7 Which types of unemployment exist at all times, and determine the natural rate of unemployment? I. frictional unemployment II. structural unemployment III. cyclical unemployment
1. I & II*
1. II & III
1. I & III

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6.5.0.7 Which types of unemployment exist at all times and determine the natural rate of unemployment?

Frictional unemployment and structural unemployment.*

Structural unemployment and cyclical unemployment.

Frictional unemployment and cyclical unemployment.

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  time*
  
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  money
  
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  resources
  

efficiency-wage theory.*

optimal-wage theory.

equilibrium-wage theory.

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frictionally unemployed.*

underemployed.

cyclically unemployed.

structurally unemployed.

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the natural rate of unemployment is likely to increase.*

the natural rate of unemployment is likely to decrease.

the natural rate of unemployment is unlikely to change

frictional unemployment will likely decrease to zero.

// Content page - Reading: Changes in Unemployment over the Long Run

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  cyclical unemployment *
  
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  the natural rate of unemployment
  
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  seasonal unemployment*
  
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  frictional unemployment
  

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structural unemployment.

frictional unemployment.*

cyclical unemployment.

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6.6.0.0 Explain the concept of a price index and explain how price indices are derived

Short Title: Price Indexes
6.6.0.1 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’s gym membership?

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  8.6%
  
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  5.4%
  
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  7.87%
  
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  16.66%*
  

the inflation rate was less than 200%.

the inflation rate was over 200%.

prices doubled.

prices tripled.*

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6.6.0.2 Inflation can be calculated in terms of how the overall cost of ___________________ changes over time.

all goods

a basket of goods *

all goods and services

all services

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substitution (quality/new product) bias.*

preferential bias.

complementary product bias.

consumer behavior bias.

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6.6.0.4 If you have $100 cash and the price level rises two percent, then which of the following statements is true?

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  The value of $100 is more in terms of what it can purchase.
  
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  The value of $100 is less in terms of what it can purchase.*
  
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  The value of $100 is the same in terms of what it can purchase.
  

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more, in terms of purchasing, than what she borrowed

less, in terms of purchasing power, that what she borrowed

the same, in terms of purchasing power, as what she borrowed.*

// Content Page – Readings: Price Indexes; Reading: The CPI and the PCE

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  inflation rate*
  
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  price index rate
  
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  consumer price index
  
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  producer price Index
  

apparel

housing*

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  consumers
  
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  producers of goods and services*
  
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  government
  
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  the small business sector
  

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  Producer Price Index *
  
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  Consumer Price Index
  
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  Employment Cost Index
  
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  Processing Price Index
  

3%

30%

Less than 3%*

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Decreased.

did not change.*

increased.

// Content Page – Reading: Computing the Level of Inflation ; Reading: Tracking Inflation

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  96.00%*
  
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  38.58%
  
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  151.48%
  
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  70.61%
  

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  1985: $67,750; 2005: $92,563; 2015: $139,200
  
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  1985: $106,641; 2005: $159,750; 2015: $278,850
  
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  1985: $280, 2005: $485, 2015: $670*
  
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  1985: $1235, 2005: $1576; 2015: $2,178
  
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  1985: $130, 2005: $185, 2015: $270
  

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  2005: 137, 2015: 138
  
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  2005:137, 2015: 176
  
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  2005: 128, 2015: 176 *
  
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  2005: 128, 2015: 138
  
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  2005: 142, 2015: 208
  
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  2005: 142, 2015: 146
  

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