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All persons over age 16 who are either working for pay or actively seeking paid employment refers to:

Per capita GDP

*The labor force

The unemployment rate

The CPI

The Consumer Price Index is:

A measure of changes in the relative prices of significant consumer goods

A measure of changes in the price of all goods and services

*A measure of changes in the average price of consumer goods and services

Used to determine if the economy is functioning at full employment

If the population of a country is 1,000,000 people, its labor force consists of 500,000, and 40,000 people are unemployed, the unemployment rate is:

50.0 percent.

*8.0 percent.

7.4 percent.

4.0 percent.

Which of the following is not a basic measure of macroeconomic performance?

Output growth

Unemployment

*Public goods

Inflation

According to the WSJ article, "Employers Add Jobs, But Too Slowly to Ease Unemployment", how many jobs need to be added each month to bring the unemployment rate down?

103,000

125,000

*200,000

57,000

A decline in real GDP for at least two consecutive quarters is referred to as:

*A recession

A depression

Deflation

Inflation

Suppose a recent college graduate has an annual nominal income of $42,000 for the first year she works. If the annual inflation rate is 5 percent, what salary would she need in the second year to maintain the same real income?

$39,900

$42,000

$42,500

*$44,100

If the price of computers falls during a period when the average price level remains constant, which of the following has occurred?

Inflation

*A change in relative prices

Deflation

A recession

Inflation is defined as:

The level of prices at full-employment

An increase in the price of expensive items, such as cars

*An increase in the average level of prices

An increase in relative prices

People are unemployed if they are over 16 and not working due to:

*The inability to find a job even though they are looking

A two-week summer vacation

A strike

The lack of motivation to look for work

The uncertainty that results from inflation causes changes in:

Consumption but not saving and investment behavior

*Consumption, saving and investment behavior

Saving and investment behavior but not consumption

Income but not consumption

Frictional unemployment goes up when:

Students quit work to return to school at the end of the summer

A corporation transfers a worker to another city

*A worker quits one job in order to search for another

There is inadequate demand for labor

Automobile workers in Detroit are unemployed because robots are now being used on assembly lines but, at the same time, job vacancies exist for computer programmers. In this case, the automobile workers are an example of:

Cyclical unemployment

*Structural unemployment

Frictional unemployment

Seasonal unemployment

The U.S. goal for price stability:

Is an inflation rate of 3 to 6 percent

Is an inflation rate of zero or less

Changes each year based on economic performance

*Is an inflation rate of fewer than 3 percent

Suppose the cost of medical care rose 200 percent from 1990 to 2010, and average prices for the economy rose 150 percent. Relative to others, people who purchased medical care experienced a:

*Lower real income as a result of the price effect.

Higher real income as a result of the price effect.

Lower real income as a result of the wealth effect.

Higher real income as a result of the wealth effect

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