The fraction of the working-age population that is in the labor force

Lesson 3

Question 1 5 / 5 points

The fraction of the working-age population that is in the labor force is called the __________.

Question options:

employment rate

unemployment rate

labor force participation rate

nonresponse rate

Question 2 5 / 5 points

Economists say that the economy is at "fullemployment" when the __________.

Question options:

structural unemployment rate is zero

total unemployment rate is zero

frictional unemployment rate is zero

cyclical unemployment rate is zero

Question 3 5 / 5 points

The value of a dollar __________.

Question options:

is its purchasing power

remains constant over time

is its face value

is set by the government

Question 4 5 / 5 points

What does the Consumer Price Index (CPI. measure?

Question options:

prices of durable goods

prices of non-durable goods

the cost of living over time

the cost of replacing lost items

Question 5 5 / 5 points

What are the two critical measures of a nation’s economic health?

Question options:

income and spending

sales and taxes

wages and raises

production and income

Question 6 5 / 5 points

The value of all final goods and services produced during a given time period measures a nation’s __________.

Question options:

gross domestic product

net national product

consumer price index

net exports

Question 7 5 / 5 points

Economists define the unemployed as individuals who are __________.

Question options:

not currently working

not currently working but are actively looking for work

working but looking for a different job

working less than their desired amount of time

Question 8 5 / 5 points

Which of the following would be a macroeconomic question?

Question options:

How have the retirement benefits in the auto industry changed over time?

How has inflation increased over time?

How has the price of gold increased over time?

How has the number of commercial airline flights decreased over time?

Question 9 5 / 5 points

If Sam does not have a job and is not looking for work, he is considered __________.

Question options:

unemployed and in the labor force

unemployed and not in the labor force

not in the labor force

unemployed

Question 10 5 / 5 points

If you negotiated a salary based on an anticipated inflation rate of 4 percent, and the actual inflation rate turned out to be 6 percent, __________.

Question options:

the purchasing power of your real wages would be more than you anticipated

your employer would have gained at your expense

your real wage will increase, but your nominal wage will decrease

the purchasing power of your wages will not change, since purchasing power is based on your nominal wage

Question 11 5 / 5 points

The labor supply and demand most directly affect the level of __________ in an economy.

Question options:

people attending colleges

people requiring retraining

employment

welfare benefits

Question 12 5 / 5 points

Macroeconomics __________.

Question options:

studies the behavior of individual consumers, firms, and markets

studies the behavior of the economy as a whole

involves the interaction between different countries in specific markets

studies how computer automation has changed economics

Question 13 5 / 5 points

The Consumer Price Index (CPI. differs from a chain-weighted price index in that the CPI __________.

Question options:

requires calculation of GDP, while the chain-weighted index does not

measures the costs of a typical fixed basket of goods over time, while the chain-weighted index does not

allows for the goods consumed in an economy to change over time, while the chain-weighted index does not

compares the prices of all goods in one year to the prices of all goods in other years

Question 14 5 / 5 points

The index most widely used by the government and the private sector to measure changes in the cost of living is the __________.

Question options:

Producer Price Index

Consumer Price Index

the GDP deflator

the chain-weighted price index

Question 15 5 / 5 points

Suppose the stock of capital remains constant. By adding more labor, perhaps a second work shift, output __________.

Question options:

decreases

increases

remains the same

becomes more costly

Question 16 5 / 5 points

Suppose that nominal GDP in year 1 is 200 and nominal GDP in year 2 is 242. Assume that inflation is 10 percent per year. How fast did the economy grow between these two years?

Question options:

10 percent

12 percent

21 percent

42 percent

Question 17 5 / 5 points

The circular flow is used to make the point that __________.

Question options:

rising prices never occur during times of unemployment

unemployment only occurs during a recession

production generates income

households purchase factors of production from firms

Question 18 5 / 5 points

The unemployment rate is the number of unemployed people __________.

Question options:

divided by the number of people who are working

divided by the total working-age population

divided by the sum of the number of people who are working and the number of people who are looking for work

and the number of people working fewer than their desired number of hours, divided by the number of people who are working or looking for work

Question 19 5 / 5 points

The largest component of GDP is __________.

Question options:

government spending

consumption expenditures

private investment expenditures

net exports

Question 20 5 / 5 points

We measure gross domestic product by multiplying the quantities of goods by their prices because it allows us to __________.

Question options:

express the values of products in a common unit of measurement

correct for inflation

directly compare the output of one economy to that of another

calculate the total number of units of goods produced in an economy