Econ 202 Oregon State midterm 2
Questions And 100% Correct Answers
2025-2026 Updated.
Discouraged workers are classified by the BLS as
A) out of the labor force.
B) unemployed.
C) part of the labor force.
D) employed.
E) More than one of the above is correct - Answer A
2) If the number of unemployed workers is 19 million, the number in the working-age
population is 500 million, and the unemployment rate is 4%, how many workers are in the labor
force?
A) 20 million
B) 1 million
C) 481 million
D) 475 million
E) None of the above - Answer D
If the number of unemployed workers is 19 million, the number in the working-age population
is
500 million, and the unemployment rate is 4%, what is the labor force participation rate?
A) 4.75% B) 95% C) 7.8% D) 78% E) 96.2% - Answer B
4) Members of the military are currently not included in the employment, labor force, and
working-age population statistics. What impact would including members of the military in
these statistics have on the unemployment rate and the labor force participation rate?
,C) Including the military would increase both the unemployment rate and the labor force
participation rate.
D) Including members of the military would increase the unemployment rate and reduce the
labor force participation rate. - Answer B
5) People who lost their jobs as hand-drawn animators because of the popularity of computer-
generated 3D animation are examples of persons who are suffering
A) frictional unemployment.
B) unnatural unemployment.
C) seasonal unemployment.
D) cyclical unemployment.
E) structural unemployment. - Answer E
6) Sarah is a full-time student who is not looking for work. What kind of unemployment is Sarah
experiencing?
A) structural
B) cyclical
C) frictional
D) Sarah is not experiencing unemployment of any kind because she is not currently part of the
labor force. - Answer D
7) Which of the following is an example of a worker experiencing cyclical unemployment?
A) A worker quits his job because he does not get along with his boss.
B) A lifeguard who was hired during the summer season is laid off after summer is over.
C) A Freightliner employee that got laid off because of the recession of 2001.
D) An assembly line worker who loses his job because of automation.
E) A worker that changes jobs to move closer her family. - Answer C
8) An increase in cyclical unemployment will result in
,C) an increase in the natural rate of unemployment.
D) an increase in the unemployment rate.
E) More than one of the above is correct. - Answer D
9) Establishing a state employment agency that speeds up the process of matching unemployed
workers with unfilled jobs is an attempt to lower
A) seasonal unemployment.
B) unnatural unemployment.
C) structural unemployment.
D) cyclical unemployment.
E) frictional unemployment. - Answer E
10) Minimum wage laws cause unemployment because the legal minimum wage is set
A) too low, thus discouraging more workers.
B) above the market wage, causing the quantity of labor demanded to be greater than the
quantity of labor supplied.
C) below the market wage, causing the quantity of labor demanded to be greater than the
quantity of labor supplied.
D) above the market wage, causing the quantity of labor demanded to be less than the quantity
of labor supplied.
E) below the market wage, causing the quantity of labor demanded to be less than the quantity
of labor supplied. - Answer D
11) Which of the following best describes the relationship between the price level and the
inflation rate?
A) The inflation rate is the percentage change in the price level from one period to the next.
B) Low price levels imply low inflation rates.
C) High price levels imply high inflation rates.
D) All of the above are correct. - Answer A
, A) Changes in the CPI overstate the true rate of inflation.
B) Changes in the CPI accurately reflect the true rate of inflation.
C) Changes in the CPI are unrelated to the true rate of inflation.
D) Changes in the CPI understate the true rate of inflation. - Answer A
Table 8-6
(chapter 9 page 3)
13) Refer to Table 8-6. Suppose an economy has only three goods and the typical family
purchases the amounts given in the table above. If 2000 is the base year, then what is the CPI
for 2008?
A) 40.08
B) 180
C) 100
D) 188
E) None of the above - Answer E
14) Suppose that the prices of dairy products have risen less than prices in general over the last
several years. To which problem in the construction of the CPI is this most relevant?
A) outlet bias
B) quality bias
C) the Milk Cow Blues bias
D) new product bias
E) substitution bias - Answer E
15) The CPI in 1980 was 82, and the CPI in 2006 was 202. If you earned a salary of $30,000 in
1980, what would be a salary with equivalent purchasing power in 2006?
A) $73,902 B) $32,180 C) $49,268 D) $43,360 - Answer A
Questions And 100% Correct Answers
2025-2026 Updated.
Discouraged workers are classified by the BLS as
A) out of the labor force.
B) unemployed.
C) part of the labor force.
D) employed.
E) More than one of the above is correct - Answer A
2) If the number of unemployed workers is 19 million, the number in the working-age
population is 500 million, and the unemployment rate is 4%, how many workers are in the labor
force?
A) 20 million
B) 1 million
C) 481 million
D) 475 million
E) None of the above - Answer D
If the number of unemployed workers is 19 million, the number in the working-age population
is
500 million, and the unemployment rate is 4%, what is the labor force participation rate?
A) 4.75% B) 95% C) 7.8% D) 78% E) 96.2% - Answer B
4) Members of the military are currently not included in the employment, labor force, and
working-age population statistics. What impact would including members of the military in
these statistics have on the unemployment rate and the labor force participation rate?
,C) Including the military would increase both the unemployment rate and the labor force
participation rate.
D) Including members of the military would increase the unemployment rate and reduce the
labor force participation rate. - Answer B
5) People who lost their jobs as hand-drawn animators because of the popularity of computer-
generated 3D animation are examples of persons who are suffering
A) frictional unemployment.
B) unnatural unemployment.
C) seasonal unemployment.
D) cyclical unemployment.
E) structural unemployment. - Answer E
6) Sarah is a full-time student who is not looking for work. What kind of unemployment is Sarah
experiencing?
A) structural
B) cyclical
C) frictional
D) Sarah is not experiencing unemployment of any kind because she is not currently part of the
labor force. - Answer D
7) Which of the following is an example of a worker experiencing cyclical unemployment?
A) A worker quits his job because he does not get along with his boss.
B) A lifeguard who was hired during the summer season is laid off after summer is over.
C) A Freightliner employee that got laid off because of the recession of 2001.
D) An assembly line worker who loses his job because of automation.
E) A worker that changes jobs to move closer her family. - Answer C
8) An increase in cyclical unemployment will result in
,C) an increase in the natural rate of unemployment.
D) an increase in the unemployment rate.
E) More than one of the above is correct. - Answer D
9) Establishing a state employment agency that speeds up the process of matching unemployed
workers with unfilled jobs is an attempt to lower
A) seasonal unemployment.
B) unnatural unemployment.
C) structural unemployment.
D) cyclical unemployment.
E) frictional unemployment. - Answer E
10) Minimum wage laws cause unemployment because the legal minimum wage is set
A) too low, thus discouraging more workers.
B) above the market wage, causing the quantity of labor demanded to be greater than the
quantity of labor supplied.
C) below the market wage, causing the quantity of labor demanded to be greater than the
quantity of labor supplied.
D) above the market wage, causing the quantity of labor demanded to be less than the quantity
of labor supplied.
E) below the market wage, causing the quantity of labor demanded to be less than the quantity
of labor supplied. - Answer D
11) Which of the following best describes the relationship between the price level and the
inflation rate?
A) The inflation rate is the percentage change in the price level from one period to the next.
B) Low price levels imply low inflation rates.
C) High price levels imply high inflation rates.
D) All of the above are correct. - Answer A
, A) Changes in the CPI overstate the true rate of inflation.
B) Changes in the CPI accurately reflect the true rate of inflation.
C) Changes in the CPI are unrelated to the true rate of inflation.
D) Changes in the CPI understate the true rate of inflation. - Answer A
Table 8-6
(chapter 9 page 3)
13) Refer to Table 8-6. Suppose an economy has only three goods and the typical family
purchases the amounts given in the table above. If 2000 is the base year, then what is the CPI
for 2008?
A) 40.08
B) 180
C) 100
D) 188
E) None of the above - Answer E
14) Suppose that the prices of dairy products have risen less than prices in general over the last
several years. To which problem in the construction of the CPI is this most relevant?
A) outlet bias
B) quality bias
C) the Milk Cow Blues bias
D) new product bias
E) substitution bias - Answer E
15) The CPI in 1980 was 82, and the CPI in 2006 was 202. If you earned a salary of $30,000 in
1980, what would be a salary with equivalent purchasing power in 2006?
A) $73,902 B) $32,180 C) $49,268 D) $43,360 - Answer A
