A)

government and the trade deficit.

B)

unemployment and the trade surplus.

C)

inflation and unemployment.

D)

inflation and the trade deficit.

2.

Which one of the following would NOT lead to higher prices?

A)

strong consumer demand

B)

higher gas prices

C)

an increase in the supply of money

D)

an increase in the supply of food

3.

Which of the following terms describes a situation in which there is a reduction in the rate of inflation from 4% to 3% per year?

A)

hyperinflation

B)

inflation

C)

deflation

D)

disinflation

4.

Which of the following statements does NOT describe a problem in measuring the consumer price index (CPI)?

A)

The CPI measures only private goods and services.

B)

The CPI uses a fixed market basket of goods determined by surveys that are three to five years old.

C)

Approximately 10% of the original market basket must be replaced each year by products that are improved or modified.

D)

The CPI  includes new products in its baskets.

5.

Which statement about chained consumer price index for urban consumers (C-CPI-U) is TRUE?

A)

It does a better job in approximating a cost-of-living index than the CPI.

B)

It takes less time to estimate than the CPI.

C)

It is generally higher than the CPI.

D)

It has no advantage over the CPI.

6.

The producer price index contains:

A)

a fluctuating bundle of consumer goods and services.

B)

prices for all goods and services in the economy.

C)

information from the consumer expenditure survey.

D)

aggregate measures of price changes, organized by stage of processing.

7.

The GDP deflator is an index that includes prices of all of the following EXCEPT:

A)

consumer goods.

B)

investment goods.

C)

imports.

D)

government goods and services.

8.

Arlina got a 5% raise while the rate of inflation was 6%. Arlina's standard of living:

A)

rose by 1%.

B)

rose by 2%.

C)

fell by 3%.

D)

fell by 1%.

9.

In the United States, our principal measure of inflation is:

A)

the consumer price index.

B)

gross domestic product.

C)

the producer price index.

D)

the Leading Economic Index.

10.

_____ is a reduction in the rate of inflation.

A)

Disinflation

B)

Deflation

C)

Hyperinflation

D)

The price level

11.

_____ is an overall decline in prices throughout the economy.

A)

Disinflation

B)

Deflation

C)

Hyperinflation

D)

The price level

12.

_____ is a measure of the change in average prices paid by urban consumers for a typical market basket of goods and services.

A)

The consumer price index

B)

The producer price index

C)

Personal consumption expenditure

D)

The GDP deflator

13.

_____ is a measure of the changes in the average prices received by domestic producers for their output.

A)

The consumer price index

B)

The producer price index

C)

Personal consumption expenditure

D)

The GDP deflator

14.

_____ is an index of the average prices for all goods and services in the economy and is the broadest measure of inflation.

A)

The consumer price index

B)

The producer price index

C)

Personal consumption expenditure

D)

The GDP deflator

15.

What is real GDP in 2014 dollars if nominal GDP in 2014 is $15,000 billion, the GDP deflator in 2014 is 110, and the GDP deflator in 2010 was 100?

A)

$9, 100 billion

B)

$13,636 billion

C)

$14,010 billion

D)

$16, 500 billion

16.

If nominal GDP in 2014 is $20,000 billion while real GDP is $16,000 billion, then the GDP deflator in 2014 is:

A)

80.

B)

110.

C)

125.

D)

150.

17.

Inflation is a:

A)

steady rise in the unemployment rate across all labor markets.

B)

general rise in interest rates.

C)

decline in confidence in prices.

D)

general rise in prices.

18.

Jennifer received news that she is getting a 5% raise. However, the Bureau of Labor Statistics just reported that prices are rising by 7%. Based on the given information, which of the following is true?

A)

Jennifer's purchasing power will rise by 2%.

B)

Jennifer is losing purchasing power by 2%.

C)

Inflation has no impact on purchasing power.

D)

Jennifer's purchasing power will rise by 7%.

19.

When an economy is going through disinflation:

A)

prices are falling.

B)

prices fall back to their original levels.

C)

prices have stopped rising.

D)

prices are rising at a slowing pace.

20.

If the rate of inflation decreases from 5% to 3%, the economy is undergoing:

A)

deflation.

B)

hyperinflation.

C)

disinflation.

D)

stagflation.

21.

The conversion formula for the current dollar value to the constant dollar value is:

A)

real × (base year index / current year index).

B)

nominal × (base year index / current year index).

C)

real / (base year / current year index).

D)

nominal / (base year / current year index).

22.

Suppose in 2010 the cost of purchasing a basket of goods was $100. That same basket cost $150 in 2011. If 2010 is the base year, the consumer price index for 2011 is:

A)

100.

B)

50.

C)

250.

D)

150.

23.

Which of the following is NOT true?

A)

The consumer price index does not account for product substitutions well.

B)

The consumer price index does not account for all goods and services consumed by households.

C)

The consumer price index is a cost-of-living index.

D)

The consumer price index measures inflation.

24.

Last year, the consumer price index (CPI) was 115 while the consumer price index for this year is 125. The rate of inflation is:

A)

8.7%.

B)

8%.

C)

9.2%.

D)

10.8%.

25.

Suppose three years ago a nation's inflation rate was 8%, two years ago it was 5%, and last year it was 2%. This nation is undergoing:

A)

deflation.

B)

hyperinflation.

C)

a drop in its price level.

D)

disinflation.

26.

From 1999 to 2002, the Japanese inflation rates were, respectively, –0.3%, –0.6%, –0.7%, and –0.7%. During this time, the Japanese economy underwent:

A)

inflation.

B)

hyperinflation.

C)

a rise in its price level.

D)

deflation.

27.

Measuring changes in a fixed basket of goods to assess changes in price is a _____ method.

A)

cost-of-goods index

B)

cost-of-living index

C)

cost-of-production

D)

utility maximization

28.

The broadest measure of inflation is:

A)

the consumer price index.

B)

the GDP deflator.

C)

the personal consumption expenditures index.

D)

the producer price index.

29.

Suppose the market basket of goods and services cost $3,500 in 1996 but today costs $4,250. Using 1996 as the base year, the consumer price index for today is:

A)

79.6.

B)

120.0.

C)

82.4.

D)

121.4.

30.

The consumer price index does NOT include:

A)

the price of a haircut.

B)

property taxes.

C)

apartment rental rates.

D)

the price of milk.

31.

When the Bureau of Labor Statistics calculates the consumer price index, it assumes that:

A)

each consumer maximizes his or her utility.

B)

consumers do not substitute cheaper goods for goods when prices have risen.

C)

consumers overspend.

D)

there is no unemployment.

32.

(Table) Suppose the Bureau of Labor Statistics collects the data presented in the following table:

If 2010 is the base year, then the consumer price index for 2012 is:

A)

100.

B)

114.

C)

115.

D)

125.

33.

Most economists believe that the consumer price index _____ the rate of inflation.

A)

understates

B)

overstates

C)

accurately states

D)

dis-inflates

34.

Which of the following assumptions is NOT a problem in using the consumer price index (CPI) to accurately state the rate of inflation?

A)

The CPI assumes that people do not substitute goods.

B)

The CPI does not account for quality changes.

C)

The CPI does not include new products.

D)

The CPI does not deal with producer prices.

35.

Which of the following statements represents a problem with accurately measuring the price of health care?

A)

Payments made by Medicaid and Medicare are not included.

B)

People with good health insurance policies overuse health facilities.

C)

Doctors sometimes charge excessive and inaccurate prices.

D)

Pharmaceutical prices are not market prices.

36.

Which of the following would be included in the consumer price index?

A)

a payment made to your doctor on your behalf by Medicare

B)

a payment made by you to your doctor

C)

a payment made to your doctor on your behalf by your employer-provided insurance company

D)

a payment made to your doctor on your behalf by Medicaid

37.

Which of the following statements describes a difference between the consumer price index (CPI) and the producer price index (PPI)?

A)

Only the CPI is associated with the problem of quality changes.

B)

Only the PPI is associated with the problem of products dropped from the basket.

C)

Only the PPI measures net revenues received by firms.

D)

Only the PPI has a fixed market basket.

38.

Core inflation is found by removing _____ from the consumer price index.

A)

housing

B)

medical care

C)

food and energy

D)

producer prices

39.

The price of feed corn would be included in the:

A)

consumer price index.

B)

personal consumption expenditures price index.

C)

producer price index.

D)

core consumer price index.

40.

Which of the following items is NOT included in the GDP deflator?

A)

bubble gum

B)

turbines

C)

fire engines

D)

imported mangoes

41.

(Table) According to the table, the GDP deflator for 2012 is:

A)

0.

B)

1.

C)

72.8.

D)

100.

42.

(Table) According to the table, nominal GDP for 2013 is approximately:

A)

$7,292 billion.

B)

$7,492 billion.

C)

$7,692 billion.

D)

$7,892 billion.

43.

(Table) According to the table, real GDP for 2014 is approximately:

A)

$7,540 billion.

B)

$7,894 billion.

C)

$8,106 billion.

D)

$8,488 billion.

44.

(Table) According to the table, the GDP deflator for 2012 is approximately:

A)

40.9.

B)

50.9.

C)

60.9.

D)

70.9.

45.

(Table) According to the table, nominal GDP for 2013 is approximately:

A)

$5,050 billion.

B)

$5,250 billion.

C)

$5,450 billion.

D)

$5,650 billion.

46.

(Table) According to the table, real GDP for 2014 is approximately:

A)

$6,552 billion.

B)

$7,052 billion.

C)

$7,552 billion.

D)

$8,052 billion.

47.

Which of the following is included in the consumer price index?

A)

price of bauxite

B)

price of a hotel room in Beirut, Lebanon

C)

price of crude oil

D)

price of gasoline

48.

If the cost of a typical market basket in 2019 is 400 and the cost of a typical market basket in 2020 is 390, then during this period the economy is undergoing:

A)

inflation.

B)

disinflation.

C)

deflation.

D)

hyperinflation.

49.

If the cost of a typical market basket is 400 in 2018, 410 in 2019, and 405 in 2020, then during this period the economy is undergoing:

A)

inflation.

B)

disinflation.

C)

deflation.

D)

hyperinflation.

50.

If the cost of a typical market basket is 400 in 2018, 450 in 2019, and 550 in 2020, then during this period the economy is undergoing:

A)

inflation.

B)

disinflation.

C)

deflation.

D)

hyperinflation.

51.

The current consumer price index is:

A)

a cost-of-goods index.

B)

a true cost-of-living measure.

C)

based on a changing bundle of goods and services from one period to the next.

D)

calculated by dividing the market basket's cost in the base period by its cost in the current period.

52.

Suppose a market basket of goods costs $10,000 in 2009, the  base period, and that same basket of goods now costs $11,200. What is the consumer price index for the current period?

A)

112.0

B)

120.0

C)

89.3

D)

132.0

53.

Suppose the market basket of goods costs $10,000 in 2009, the  base period, and that same basket of goods now costs $11,200. What has been the percentage change in the cost of goods between the base period and the current period?

A)

+20%

B)

+11.2%

C)

–10.7%

D)

–20%

54.

Prices from about _____ goods and services are collected each month by Bureau of Labor Statistics data collectors to be used in calculating the consumer price index.

A)

800

B)

8,000

C)

80,000

D)

800,000

55.

In 2009, a market basket of goods and services cost $100 in Merryland while the same basket cost $200 in Berryland. In 2010, the cost in Merryland was $150 and in Berryland, the cost was $225. Based on the given information, which of the following statements is true?

A)

Neither of the countries underwent inflation.

B)

Berryland has more inflation than Merryland.

C)

The countries have the same rate of inflation.

D)

The rate of inflation is four times as large in Merryland as in Berryland.

56.

Which of the following is NOT generally considered a problem with using the consumer price index to measure consumer prices?

A)

Only private goods are considered and public goods are excluded.

B)

Many federal benefits and income tax rates are indexed to the consumer price index.

C)

Quality improvements are difficult to account for.

D)

New products are often overlooked.

57.

Which of the following is a problem in measuring consumer prices?

A)

The consumer price index does not account for product substitution.

B)

The consumer price index is not easy to adjust to changes in the quality of products.

C)

It takes time to include new products in the consumer price index.

D)

All answer choices are correct.

58.

The GDP deflator shows that since the mid-1980s, the U.S. economy has had:

A)

deflation.

B)

hyperinflation.

C)

an increasing inflation rate.

D)

disinflation.

59.

If the current year's consumer price index is 214 and last year's consumer price index was 209, then the rate of inflation is:

A)

2.4%.

B)

5%.

C)

3%.

D)

2.8%.

60.

Dave brags to his dad that his $45,000 starting salary as a computer programmer is much higher than his dad's $28,000 starting salary some years ago. If the consumer price index the year Dave begins work is 180.5 while the consumer price index the year his dad started work was 110.8, Dave is:

A)

correct; adjusting for price changes, his salary is more than his dad's salary.

B)

correct; adjusting for quantity changes, his salary is more than his dad's salary.

C)

incorrect; adjusting for price changes, his salary is less than his dad's salary.

D)

incorrect; adjusting for quantity changes, his salary is less than his dad's salary.

61.

The GDP deflator for the base year is:

A)

less than 100.

B)

always equal to 100.

C)

greater than 100.

D)

dependent on the quantities of output and the prices at which outputs are sold in the base year.

62.

Nominal GDP in 2006 was $13,458.2 billion.  In 2006, the GDP deflator was 116.9. What was the real GDP for 2006 if the GDP deflator uses 2000 as the base year?

A)

$15,732.6 billion

B)

$15,746.1 billion

C)

$11,512.6 billion

D)

$11,522.5 billion

63.

Janet is receiving a 5% pay raise. If the rate of inflation is 2%, then Janet's purchasing power is:

A)

falling.

B)

rising.

C)

unaffected by either inflation or the pay raise, because they are expressed in nominal and not in real terms.

D)

It is impossible to tell what is happening to Janet's purchasing power without further information.

64.

What is your new salary if you earned $40,000 last year, the consumer price index increased from 120 to 125, and your salary is adjusted by the rate of inflation annually?

A)

$38,400

B)

$41,600

C)

$41,666.67

D)

$40,125

65.

If the nominal GDP is $13 trillion for a given year and the GDP deflator for that year is 115, then the real GDP is:

A)

$11.3 trillion.

B)

$14.95 trillion.

C)

$12.0 trillion.

D)

$13.0 trillion.

66.

Jill has an escalator clause in her labor contract that gives her a raise equal to the change in the consumer price index (CPI). Last year she earned $40,000 and the CPI was 100. If the CPI this year is 110, her new salary is:

A)

$40,110.

B)

$50,000.

C)

$40,100.

D)

$44,000.

67.

The inflation rate is 4%. If Social Security payments automatically rise by 4%, this adjustment is authorized by an:

A)

inflation rate.

B)

escalator clause.

C)

elevator clause.

D)

insanity clause.

68.

John expects to get a raise equal to the increase in the consumer price index (CPI). The CPI has gone from 160 to 164. If John's salary last year was $50,000, what salary does he expect to earn this year?

A)

$51,250

B)

$48,750

C)

$52,220

D)

$52,250

69.

GDP is $10 trillion in 2001. If the GDP deflator is 100 in 2000 and is 110 in 2001, what is real GDP?

A)

$10.0 trillion

B)

$11.1 trillion

C)

$9.09 trillion

D)

$110.0 trillion

70.

If your salary was $50,000 last year, and this year you receive a cost-of-living increase tied to the consumer price index (CPI), what will your salary be this year assuming the CPI has risen from 110 to 114?

A)

$49,114

B)

$50,114

C)

$50,300

D)

$51,818

71.

Suppose Robert has a wage contract subject to an escalator clause. He earned $22 per hour last year. In the same year, the consumer price index rose from 120.0 to 126.0. Based on the given information, what should his new wage be?

A)

$24 per hour

B)

$23.10 per hour

C)

$24.40 per hour

D)

$22.50 per hour

72.

In the first quarter of 2010, nominal GDP  was $14,592.3 billion and the GDP deflator was 110.2.  Real GDP for the first quarter of 2010, then, was equal to:

A)

$13,133.1 billion.

B)

$13,241.7 billion.

C)

$13,103.9 billion.

D)

$13,424.9 billion.

73.

Last year, Megan's salary was $65,000 while the consumer price index increased from 109 to 115. If Megan received a cost-of-living adjustment, what would her salary be?

A)

$61,553

B)

$61,320

C)

$67,564

D)

$68,578

74.

For your purchasing power to stay the same, your wages must:

A)

increase faster than the rate of inflation.

B)

increase at the same rate as inflation.

C)

decrease as the rate of inflation increases.

D)

increase more slowly than the rate of inflation.

75.

During periods of inflation, which of the following events does NOT occur?

A)

Mortgage lenders seek inflation adjustments.

B)

Workers seek escalator clauses.

C)

People on a fixed income have increased standards of living.

D)

People on a fixed income have decreased standards of living.

76.

Retirees and creditors:

A)

benefit from inflation because they are paid in cheaper dollars.

B)

benefit from inflation because interest rates rise.

C)

are hurt by inflation because their purchasing power is reduced.

D)

are hurt by inflation because taxes fall.

77.

All of the following are true for inflation EXCEPT:

A)

those on a fixed income lose purchasing power during inflationary periods.

B)

creditors do not receive the full amount of a loan because the principle and interest rates are fixed.

C)

debtors are hurt during inflationary times because the amount they pay creditors back increases.

D)

increased prices due to high inflation cause consumers to spend less money.

78.

Inflation has significant long-run effects on the economy because:

A)

it distorts the price signal and produces incentives for speculation.

B)

it can enhance the purchasing power of a fixed income.

C)

it can lead to an improvement in real values.

D)

creditors can gain from inflation.

79.

Suppose that anticipated inflation is 4% for the coming year, with loan contracts set at 7% with the expectation of a 3% return after inflation. If the actual inflation rate at the end of the year is 2%:

A)

creditors gain at the expense of debtors.

B)

people on a fixed income see the purchasing power of their incomes rising.

C)

debtors gain at the expense of creditors.

D)

there is a redistribution of income from creditors to debtors.

80.

Which of the following groups benefit from an unanticipated rise in the inflation rate?

A)

homeowners with fixed-rate mortgages

B)

elderly people living on a fixed income

C)

creditors or lenders

D)

workers on contracts without escalator clauses

81.

Which group is helped by inflation?

A)

senior citizens on a fixed income

B)

debtors

C)

restaurant owners who must reprint menus

D)

creditors

82.

Which of the following statements about stopping hyperinflation is NOT correct?

A)

The government must reduce the budget deficit.

B)

The growth of the money supply must decrease.

C)

Borrowing from foreign governments must take place.

D)

A change in government and a new currency are usually required.

83.

(Table) The associated table provides a hypothetical bundle of goods and their respective prices for three different years.  If 2014 is selected as the base year, the cost of the market basket in 2017 would be would be: 

A)

$520.50.

B)

$587.75.

C)

$640.50.

D)

$651.75.

84.

(Table) The associated table provides a hypothetical bundle of goods.  If 2014 is selected as the base year, the value of the CPI in 2017 would be:

A)

100.00.

B)

108.98.

C)

88.50.

D)

105.00.

85.

(Table) The associated table provides a hypothetical bundle of goods.  If 2014 is selected as the base year, the value of the GDP deflator in 2017 would be:

A)

100.00.

B)

108.90.

C)

88.50.

D)

105.00.

86.

(Table) The associated table provides a hypothetical bundle of goods.  If 2014 is selected as the base year, the value of nominal GDP in 2017 would be: 

A)

$565.00.

B)

$500.00.

C)

$709.75.

D)

$651.75.

87.

(Table) The associated table provides a hypothetical bundle of goods.  If 2014 is selected as the base year, the economy is experiencing _____ in 2017. 

A)

inflation

B)

disinflation

C)

deflation

D)

hyperinflation

88.

Lexie works Monday to Friday from 4 P.M. to 6 P.M. in the after-school program at a local elementary school. She began looking for a full-time job last week and has already scheduled three job interviews. According to the Bureau of Labor Statistics, Lexie is:

A)

a discouraged worker.

B)

unemployed.

C)

employed.

D)

not in the labor force.

89.

Jordan Meadows lost his job as an airline pilot and has not been able to find another job as a pilot. Since he is old enough to be eligible for his pension, he decides to retire and devote himself to caring for his elderly parents. According to the Bureau of Labor Statistics, Jordan is:

A)

employed.

B)

unemployed.

C)

a discouraged worker.

D)

not in the labor force.

90.

An economy has a population of 226,500,  of whom 12,500 are unemployed and actively seeking work, and 35,000 have given up looking for a job. Also, 28,000 people work part-time, and 151,000 people work full-time. This economy's unemployment rate is _____.

A)

7.0%

B)

21.0%

C)

5.5%

D)

21.1%

91.

Zach has been laid off from his job as an aircraft worker . He has been actively looking for a job but has had no luck for the past six weeks. According to the Bureau of Labor Statistics, Zach is:

A)

employed.

B)

unemployed.

C)

a discouraged worker.

D)

not in the labor force.

92.

Unemployment rates over the past 50 years have tended to hover between:

A)

1% to 2%.

B)

5% to 6%.

C)

10% to 11%.

D)

25% to 26%.

93.

In 2012, the group with the highest unemployment rate in the United States was:

A)

whites.

B)

African Americans.

C)

Hispanics.

D)

college graduates.

94.

In 2012, the group with the lowest unemployment rate in the United States was:

A)

high school graduates.

B)

college graduates.

C)

people with less than a bachelor's degree.

D)

people with less than a high school diploma.

95.

The main reason people were unemployed in the United States in 2012 was because they:

A)

were new entrants into the labor force.

B)

were reentrants into the labor force.

C)

lost their job.

D)

left their job.

96.

Which statement about the Weekly Jobs Report is NOT true?

A)

It is released by the Department of Labor.

B)

It contains an estimate of the total number of people receiving unemployment benefits.

C)

It is used as a way to estimate trends in layoffs.

D)

It is used as a way to estimate trends in hiring.

97.

Roughly half of unemployment normally consists of:

A)

people who lost their job.

B)

people who were job leavers.

C)

people reentering the job market.

D)

people who are new to the job market.

98.

People are considered employed if they are:

A)

unpaid family workers.

B)

on strike.

C)

on vacation.

D)

All of those listed are considered employed.

99.

In the United States, people are considered unemployed if and when they:

A)

have become discouraged and are no longer actively seeking work.

B)

do not have a job but are available for work and have been actively seeking work.

C)

are working at a job that does not fully utilize their skills.

D)

are on family leave.

100.

People who are considered unemployed include:

A)

those who are doing temporary work.

B)

those who are unpaid family workers.

C)

those who do not have a job and are not actively seeking employment.

D)

None of those listed is considered unemployed.

101.

(Table) According to the table, what is the labor force of this economy?

A)

50

B)

300

C)

350

D)

500

102.

(Table) According to the table, what is the unemployment rate of this economy?

A)

10%

B)

14.3%

C)

16.67%

D)

25%

103.

(Table) According to the table, if 50 discouraged workers suddenly decide to start actively seeking employment again, what will be the unemployment rate of this economy?

A)

10%

B)

14.3%

C)

16.67%

D)

25%

104.

Which of the following persons is considered to be unemployed?

A)

Ahmed, who is on vacation

B)

Sarah, who is on strike duty

C)

Tiffany, who is going on interviews, hoping to get her first job

D)

Carmen, who works three days a week at her father's business but is not paid

105.

Tom is living with his parents. He looks at the help wanted ads but has not replied to any in the past four weeks. Tom is:

A)

unemployed.

B)

not in the labor force.

C)

temporarily in the labor force.

D)

near-employed.

106.

The nation of Workovia has a population of 15 million, of whom, 10 million are in the labor force and 9 million are working. Workovia's unemployment rate is:

A)

27%.

B)

60%.

C)

33%.

D)

10%.

107.

The unemployment rate is defined as the _____ divided by the _____.

A)

number unemployed; population

B)

number unemployed; number working

C)

number unemployed; number in the labor force

D)

number passively looking for a job; number in the labor force

108.

The labor force is defined as:

A)

the total number of those with gainful employment.

B)

the total number of the employed and unemployed.

C)

the total population less the number unemployed.

D)

the number of workers seeking a paid job.

109.

Which of the following activities would NOT qualify a person as being in the labor force?

A)

going on interviews

B)

submitting applications through the Internet

C)

using social media to reach out to employers

D)

reading help wanted ads

110.

(Table) According to the table, the number of people in the labor force is:

A)

115.

B)

110.

C)

130.

D)

120.

111.

The unemployment rate is:

A)

100% minus the labor force participation rate.

B)

the number of unemployed divided by the total population.

C)

the number of employed divided by the labor force.

D)

the number of unemployed divided by the labor force.

112.

The key to being counted as unemployed by the Bureau of Labor Statistics is to be:

A)

out of a job.

B)

available for work.

C)

actively seeking work.

D)

passively seeking work.

113.

There are 15 million people living in Marketstan, of whom 9 million are working and 1 million are actively looking for work. What is the size of Marketstan's labor force?

A)

15 million

B)

10 million

C)

5 million

D)

16 million

114.

There are 15 million people living in Marketstan, of whom 9 million are working and 1 million are actively looking for work. What is Marketstan's unemployment rate?

A)

6.7%

B)

1%

C)

10%

D)

11.1%

115.

How many hours does a person have to work for pay to be counted as employed?

A)

1 hour a week

B)

1 hour a day

C)

20 hours a week

D)

40 hours a week

116.

Which of the following people would NOT be considered employed?

A)

a person working 10 hours a week for pay

B)

a unionized worker on strike

C)

an unpaid family employee working 10 hours a week

D)

a full-time worker on vacation last week

117.

A passive job search:

A)

entails merely talking to friends about jobs.

B)

means participating in productive activities, like sending off résumés.

C)

entails the scheduling of job interviews.

D)

includes contacting a private employment agency.

118.

Johnny is 17 and works in his father's bubble gum store 10 hours a week after school. His father pays him no money but buys video games for him. However, Johnny earns a spot on the high school football team and no longer works in his father's store. How is Johnny categorized in the unemployment figures?

A)

Johnny is considered unemployed.

B)

Johnny is considered employed because he works hard at his football career.

C)

Johnny is not part of the labor force.

D)

Johnny is considered underemployed.

119.

Robert lost his job and now takes care of his children while his wife works. Robert has decided he likes his daddy duties. Robert would take a job similar to the one he lost if it was offered, but he is not actively seeking work. How is Robert categorized in the unemployment figures?

A)

Robert is unemployed.

B)

Robert is employed because he is providing a useful service.

C)

Robert is not part of the labor force.

D)

Robert is underemployed.

120.

Hannah is not at work because she broke her leg, but she will return once it heals. She is:

A)

unemployed.

B)

in the labor force.

C)

temporarily unemployed.

D)

part-time employed.

121.

If the labor force is 20 million and the total employed is 18 million, what is the unemployment rate?