Question 1

Any output produced by U.S.firms is included in the value of U.S.GDP,even if the output was produced in a foreign country.

Accepted Answer

The answer of Any output produced by U.S.firms is included...

Question 2

Core inflation figures omit healthcare prices,but not energy prices.

Accepted Answer

The answer of Core inflation figures omit healthcare prices,but not...

Question 3

GDP figures do not include the value of illegal activities.

Accepted Answer

GDP figures only include the value of legal economic activities, so illegal activities such as drug trafficking and black market transactions are not included in GDP calculations.

Question 4

The CPI is based on the prices of a carefully selected market basket of goods,all of which consumers can purchase at a supermarket.

Accepted Answer

The CPI is based on the prices of a carefully selected market basket of goods and services, not just goods that can be purchased at a supermarket. The market basket includes items such as housing, healthcare, and transportation.

Question 5

Structural unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills or location of job seekers and the requirements or location of available jobs.

Accepted Answer

Structural unemployment is defined as unemployment caused by changes in the economy, including changes in technology or organization, and by mismatches between the skills or location of job seekers and the requirements or location of available jobs.

Question 6

Some wages,tax brackets,interest rates,and government benefits are based on the CPI.

Accepted Answer

The Consumer Price Index (CPI) is a widely used measure of inflation, and many economic variables are indexed to it, including wages, tax brackets, interest rates, and government benefits.

Question 7

Inflation refers to a general rise in the prices of goods and services over time.

Accepted Answer

Inflation is defined as a sustained and general increase in the prices of goods and services in an economy over time.

Question 8

In 2010,the U.S.unemployment rate was at its lowest point in 10 years.

Accepted Answer

The U.S. unemployment rate was actually at its highest point in 2010 as a result of the Great Recession.

Question 9

As of 2010,total GDP in the United States was around $14 trillion.

Accepted Answer

According to the World Bank, the total GDP of the United States in 2010 was approximately $14.99 trillion.

Question 10

The consumer price index CPI)measures what is happening to prices at the wholesale level.

Accepted Answer

The consumer price index (CPI) measures what is happening to prices at the consumer level, specifically the prices of a basket of goods and services purchased by households. The wholesale price index (WPI) measures what is happening to prices at the wholesale level, specifically the prices of goods sold in bulk to businesses or other organizations.

Question 11

Frictional unemployment occurs because the economy is experiencing a recession.

Accepted Answer

Frictional unemployment is the type of unemployment that occurs when workers are between jobs or transitioning between careers. It is not necessarily linked to a recession, but rather a natural part of the labor market as workers search for better opportunities or match their skills to available jobs.

Question 12

To be classified as unemployed,a person must be at least 16 years old and trying to find a job within the past four weeks.

Accepted Answer

This is the definition of unemployment according to the Bureau of Labor Statistics (BLS).

Question 13

The producer price index measures what is happening to prices at the wholesale level.

Accepted Answer

The producer price index (PPI) is a measure of average change over time in the selling prices received by domestic producers for their output. It reflects the prices of goods and services at the wholesale level before being passed on to consumers, making it a measure of inflation or deflation in the early stages of the production process.

Question 14

Disinflation refers to a situation in which prices continue to rise,but not at the rate they were rising previously.

Accepted Answer

Disinflation is a decrease in the rate of inflation, meaning prices are still rising but at a slower rate than before.

Question 15

The higher the measurement of productivity,the higher the likely costs of production.

Accepted Answer

This statement is false. Higher productivity can lead to lower costs of production due to efficiencies gained through increased output and reduced waste.

Question 16

Deflation means prices are declining.

Accepted Answer

Deflation is a decrease in the general price level of goods and services.

Question 17

Inflation refers to the persistent rise in the purchasing power of money.

Accepted Answer

Inflation refers to the persistent rise in the general level of prices, leading to a decrease in the purchasing power of money.

Question 18

An increase in productivity means that a worker is now able to produce more goods and services in the same amount of time.

Accepted Answer

An increase in productivity by definition means that a worker is able to produce more output (goods or services) in the same amount of time or with the same amount of resources.

Question 19

The CPI measures the pace of inflation or deflation.

Accepted Answer

The Consumer Price Index (CPI) is a measure of the average change in prices over time of goods and services consumed by households. It is widely used as an indicator of the rate of inflation or deflation in an economy.

Question 20

Productivity of workers in the U.S.is helped by the use of better machinery.

Accepted Answer

The use of better machinery can increase the efficiency and speed of workers, leading to higher productivity.

Quiz 2: Understanding Economics and How It Affects Business