Question 1

If the CPI is 230 in year 1 and 249 in year 2,what is the approximate percentage change in prices between the two years?

Accepted Answer

The percentage change in the CPI can be calculated using the formula:
((CPI year 2 - CPI year 1) / CPI year 1) x 100%
Plugging in the values, we get:
((249 - 230) / 230) x 100% = 8.26%
Rounding to one decimal place, the answer is 8.3%, which corresponds to choice B.

Question 2

The movie "Return of the Jedi" earned $264 million in 1983 when it was released.The CPI in 1983 was 97.8 and the CPI in 2012 was 226.665.Approximately how much did the movie earn in 2012 dollars?

Accepted Answer

Using the CPI Inflation Calculator from the US Bureau of Labor Statistics, we can calculate the inflation factor between 1983 and 2012:
Inflation factor = CPI in 2012 / CPI in 1983
Inflation factor = 226.665 / 97.8
Inflation factor = 2.3168
To find the equivalent value of the movie's earnings in 2012 dollars, we need to multiply the original earnings by the inflation factor:
2012 earnings = 1983 earnings x inflation factor
2012 earnings = $264 million x 2.3168
2012 earnings = $612.2112 million
Rounding to the nearest million gives us: $612 million. Therefore, the best choice is B.

Question 3

Smith's income was $50,000 in year 1 and $55,600 in year 2.The CPI was 114 in year 1 and 124 in year 2.What was the approximate percentage change in Smith's real income between the two years?

Accepted Answer

To calculate the real income change, adjust the incomes by the CPI to get them in constant dollars. For year 1, the real income is already in constant dollars since it's the base year. For year 2, adjust the income using the CPI: $55,600 * (114 / 124) = $51,100. The change in real income is from $50,000 to $51,100, which is an increase of $1,100. The percentage change in real income is ($1,100 / $50,000) * 100% = 2.2%.

Question 4

A movie star was paid $1 million in 1960 to do a movie.The CPI was 29.3 in 1960 and the CPI in 2014 was 240.Approximately how much did the movie star earn in 2014 dollars?

Accepted Answer

The answer of A movie star was paid $1 million...

Question 5

The unemployment due to changes in the types of skills employers require is called __________ unemployment.

Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills of job seekers and the requirements of available jobs. This can occur due to changes in technology or shifts in consumer demand, among other factors.

Question 6

The cyclical unemployment rate is defined as the __________ unemployment rates.

Accepted Answer

The cyclical unemployment rate is the difference between the existing (actual) unemployment rate and the natural rate of unemployment, which is made up of structural and frictional unemployment.

Question 7

In an economy with a population of 100 million persons,40 million hold civilian jobs and 9 million are not working but are looking for jobs.The number counted as unemployed is

Accepted Answer

The number counted as unemployed is the number of people who are not working but are actively looking for jobs. Therefore, the number counted as unemployed is 9 million.

Question 8

In an economy with a population of 100 million persons,44 million hold civilian jobs and 6 million are not working but are looking for jobs.The unemployment rate is

Accepted Answer

The answer of In an economy with a population of...

Question 9

In an economy with a population of 100 million persons,50 million hold civilian jobs and 20 million are not working but are looking for a job.The number of persons in the civilian labor force is

Accepted Answer

The labor force consists of both employed and unemployed individuals actively seeking employment. Therefore, the number of persons in the civilian labor force is equal to the number of employed persons (50 million) plus the number of unemployed persons actively seeking employment (20 million), which equals 70 million.

Question 10

The employment rate equals the number of

Accepted Answer

The answer of The employment rate equals the number of
...

Question 11

Suppose the civilian non-institutional population equals 250,000;there are 132,500 employed persons and 10,000 unemployed persons.How many persons are not in the labor force?

Accepted Answer

The answer of Suppose the civilian non-institutional population equals 250,000;there...

Question 12

"Full employment" is said to exist when the unemployment rate equals

Accepted Answer

Full employment is said to exist when the unemployment rate equals the natural unemployment rate. The natural unemployment rate is the combination of frictional and structural unemployment and does not include cyclical unemployment, which is caused by fluctuations in the business cycle. A zero unemployment rate is not desirable as it would indicate a potential labor shortage and can create inflationary pressures.

Question 13

A market basket is made up of three goods,10X,12Y,and 18Z.The prices in the base year are $1.20,$2.10,and $3.25,respectively.The prices in the current year are $1.44,$2.23,and $3.88.What is the approximate consumer price index in the current year?

Accepted Answer

To calculate the approximate consumer price index, we first need to find the total cost of the market basket in the base year and the current year.

Base year cost: 10X*$1.20 + 12Y*$2.10 + 18Z*$3.25 = $52.20

Current year cost: 10X*$1.44 + 12Y*$2.23 + 18Z*$3.88 = $67.68

Using the base year as the reference point, the CPI can be calculated as:

CPI = (Current year cost / Base year cost) * 100

CPI = ($67.68 / $52.20) * 100 = 129.74

Therefore, the approximate consumer price index in the current year is 116 (rounded to the nearest whole number). The closest answer choice is C.

Question 14

In an economy with a population of 100 million persons,50 million hold civilian jobs and 20 million are not working but are looking for a job.The unemployment rate is

Accepted Answer

The unemployment rate is the percentage of the labor force that is unemployed. The labor force is the sum of those employed and those unemployed but looking for a job. In this case, the labor force is 50 million + 20 million = 70 million. The unemployment rate is therefore 20 million / 70 million * 100 = 28.57%.

Question 15

In an economy with 100 million people,70 million hold civilian jobs and 19 million are not working but are looking for jobs.The unemployment rate is

Accepted Answer

The unemployment rate can be calculated by dividing the number of unemployed individuals by the total labor force (those who are employed plus those who are unemployed and actively seeking employment) and multiplying by 100.

Total labor force = 70 million + 19 million = 89 million
Unemployment rate = (19 million / 89 million) x 100 = 21.35%

Therefore, the best choice is B.

Question 16

Which of the following statements is true?

Accepted Answer

B is true, as the CPI in the base year is always set to 100.
C is true, as the percent change in prices between year 1 and year 2 is given by [(CPI2-CPI1)/CPI1] x 100, which in this case equals [(123-112)/112] x 100 = 9.8%. 
A is false, as base year prices are not necessarily higher than current year prices. In fact, the CPI measures the change in prices over time, so current year prices can be higher or lower than base year prices depending on the context.

Question 17

Suppose the civilian non-institutional population equals 100,000 persons;the civilian labor force equals 75,000 persons;there are 70,000 employed persons and 5,000 unemployed persons.If 5,000 persons who are currently "not in the labor force" decide to join the civilian labor force,and 3,000 of them are unemployed,then

Accepted Answer

The answer of Suppose the civilian non-institutional population equals 100,000...

Question 18

Assume that Ms.Sawyer's salary is $42,000,up from $40,000 last year,while the CPI is 157.5 this year,up from 150 last year.This means that Ms.Sawyer's real income has

Accepted Answer

The answer of Assume that Ms.Sawyer's salary is $42,000,up from...

Question 19

In many large retail stores,price markdowns are now determined by computer.The "middle managers" who used to make these decisions personally became __________ unemployed.

Accepted Answer

The sentence indicates that the use of computers to determine price markdowns replaced the "middle managers" who used to make these decisions personally. This implies that the change in technology resulted in a structural shift in the job market, causing these managers to become structurally unemployed.

Question 20

Unemployment that arises as a result of the time it takes for unemployed people to locate a job utilizing their transferable skills is called __________ unemployment.

Accepted Answer

Frictional unemployment refers to the situation where people are out of work because they are in the process of changing jobs or are in search of new job opportunities. This is due to the time it takes for job seekers to find employment opportunities that match their skills and preferences. It is considered as a natural part of the economy and arises as a result of the movement of labor from one job to another.

Quiz 6: Macroeconomic Measurements, part I: Prices and Unemployment