Name __________________________
Quiz Date / due date ______________
Economic Challenges
Principles and Practices of Economics
Chapter 13 Study Guide
Directions: Referring to your text, read pages 331-352, and answer the following questions.
Use this as a reference when studying for the chapter quiz, and be prepared to turn it in for credit
prior to taking the quiz.
Section 1:
1. By counting the number of unemployed people in the country, what can economists
measure? ________________________________________
2. List the four basic kinds of unemployment.
1. ____________________________
2. ____________________________
3. ____________________________
4. ____________________________
3. When people need to take time to find a job such as when they are changing jobs or just
finish school, this type of unemployment is known as ___________________.
4. When industries slow down or shut down for the season or make shifts in their seasonal
production schedules, the unemployment that results is known as _____________________.
5. When workers lose their jobs because the skills they have no longer match the needs of
employers, it is known as this type of unemployment: _____________________
6. List the five major causes of structural unemployment.
1. _______________________________________
2. _______________________________________
3. _______________________________________
4. _______________________________________
5. _______________________________________
7. Unemployment that rises during economic downturns and falls when the economy improves
is known as what kind of unemployment? _______________________
8. Unemployment payments pay how much of a worker’s lost wages? ______________
9. What does BLS stand for?
10. The BLS computes the unemployment rate, which is what?
11. What percentage of workers can be unemployed, with economists calling the situation “full
employment?” _____ - ______ %
12. The level of employment reached when no cyclical unemployment exists is known as
______________ ______________________.
13. What types of economic problems can occur as a result of low unemployment?
Section 2:
14. A general increase in prices is known as _______________________.
15. The ability to purchase goods and services is known as ____________________
_________________.
16. A measurement that shows how the average price of a standard group of goods or services
changes over time is known as a _____________ ______________.
17. What does CPI stand for? ___________________ _______________ __________.
18. What is a market basket? _______________________________________________
_____________________________________________
19. How many categories is the market basket divided into? _________
20. The percentage of change in price over time is known as the ________________
________________.
21. What is the current base period for the CPI? _______ - ______
22. The theory of inflation that states that too much money in the economy causes inflation is
known as the _____________________ theory.
23. What does the demand-pull theory of inflation state?
24. Cost-push inflation occurs when producers raise prices in order to meet increased costs.
What is the biggest reason that this occurs?
25. The process by which rising wages cause higher prices, and higher prices cause higher wages
is known as the _____________ - ______________ _______________.
26. What happens to the purchasing power of the dollar during inflationary times?
27. If a worker’s wage increase matches the inflation rate, what happens to their real income?
______________________________________
28. What happens to a saver’s money when the bank’s interest rate matches the inflation rate?
_________________________________________
29. When employment falls to a very low level, typically what happens with inflation?
____________________________________________
Section 3:
30. Groups of two or more people related by birth, marriage, or adoption who live in the same
housing unit are known as a ___________________ according to the Census Bureau.
31. A family is considered poor when their total income is less than the amount required to
satisfy the family’s ____________________ ___________________.
32. The income level below which is insufficient to support a family or household is known as
the _________________ _____________________.
33. The poverty threshold for a family of four with two children was what in 2004?
$______________
34. The percentage of people who live in households with income below the official poverty
threshold is known as the _________________ _______________.
35. Families with a single mother have a poverty rate of how many times higher than those of
two-parent families? ______ x
36. What was the median income of a high school dropout in 2003? $____________
37. How much more (approximately) did high school graduates make than those who dropped
out? _________________
38. What was the median household income in the U.S. in 2003? $_____________
39. What does the term median mean?
40. What does TANF stand for?
41. What is the time limit that families can qualify to receive TANF funds? _______________
42. Carefully read the chapter summary on page 352.
43. Answer the Key Terms questions on page 352.
1. _________________________________________
2. _________________________________________
3. _________________________________________
4. _________________________________________
5. _________________________________________
6. _________________________________________
7. _________________________________________