Week 3 · Quiz

Week 3 — Quiz · Measuring Inflation & Unemployment

Principles of Macroeconomics · ECON 2 Fall 2026 · Prof. Ashford Fictional sample

Course: Principles of Macroeconomics (ECON 2) · Silver Oak University (fictional sample) · Prof. Ashford
Objective 3 · 10 questions · 10 points · closed to AI · one attempt
Auto-graded (Classic QTI): see F-quiz-week-03-qti.xml for the Canvas import. Every numeric answer is pre-computed; every claim is verified.

The questions (human-readable; answer key below)

Q1. The Consumer Price Index (CPI) is best described as —
A) The inflation rate expressed as a whole number B) A level showing the cost of a fixed market basket relative to a base year (base year = 100) C) The unemployment rate for a given year D) The total dollar value of everything produced in an economy

Q2. A CPI basket costs $200 in the base year and $216 this year. What is the CPI this year?
A) 8 B) 16 C) 108 D) 216

Q3. A different CPI basket costs $60 in the base year. This year, the same basket costs $66. What is this year's CPI?
A) 6 B) 10 C) 110 D) 66

Q4. The CPI moves from 110 (year 1) to 121 (year 2). What is the inflation rate from year 1 to year 2?
A) 11 points B) 10% C) 21% D) 121%

Q5. (True/False) A CPI of 108 means "the inflation rate is 108% this year." → False

Q6. A country has an adult (16+) population of 200 million: 92 million are employed, and 8 million are unemployed (no job, actively searching). What is the unemployment rate?
A) 4% B) 8% C) 40% D) 46%

Q7. Using the same numbers as Q6 (200 million population, 92 million employed, 8 million unemployed), what is the labor-force participation rate (LFPR)?
A) 8% B) 46% C) 50% D) 92%

Q8. (Select all that apply.) Which of the following people are correctly counted as part of the labor force?
☑ A) A worker who has a full-time job ☐ B) A retired person with no interest in working ☑ C) A person with no job who is actively applying and interviewing this week ☐ D) A discouraged worker who gave up searching for work six months ago ☐ E) A full-time student with no job who is not looking for one

Q9. A worker receives a 2% nominal raise this year. Inflation this year is 6%. What happened to the worker's real wage?
A) It rose about 4% B) It rose about 2% C) It stayed the same D) It fell about 4%

Q10. (Matching) Match each type of unemployment to its example. Frictional unemployment → A recent college graduate spends two months interviewing before accepting a job offer; Structural unemployment → A factory worker's assembly-line job is automated, and the worker's skills no longer match the openings in the local job market; Cyclical unemployment → Layoffs spread across many industries at once during an economy-wide downturn; Discouraged worker → A person who wants a job and searched for months but has now stopped looking entirely. (Distractor: "A person actively submitting applications this week and awaiting responses.")

Answer key & feedback (instructor)

Q	Type	Answer	Feedback (the idea)
1	MC	B	The CPI is a LEVEL — the cost of a fixed basket relative to a base year set to 100 — not itself an inflation rate, GDP, or the unemployment rate.
2	MC	C	CPI = (new cost ÷ base cost) × 100 = (216 ÷ 200) × 100 = 108.
3	MC	C	CPI = (66 ÷ 60) × 100 = 110.
4	MC	B	Past the base year, compute the % CHANGE between two CPI values: (121 − 110) ÷ 110 × 100 = 10% — not 11 points, and not 121%.
5	TF	False	A CPI of 108 means prices are 8% above the base year — a LEVEL, not an inflation rate of "108%."
6	MC	B	Unemployment rate = unemployed ÷ labor force × 100 = 8 ÷ (92+8) × 100 = 8 ÷ 100 × 100 = 8% (divide by the LABOR FORCE, not the total population).
7	MC	C	LFPR = labor force ÷ adult population × 100 = 100 ÷ 200 × 100 = 50% (divide by the total POPULATION, a different denominator from Q6).
8	MA	A, C	Employed workers (A) and active job-seekers (C) are in the labor force. A retiree not seeking work (B), a discouraged worker who stopped looking (D), and a student not seeking work (E) are all OUTSIDE the labor force.
9	MC	D	Real wage change ≈ nominal change − inflation = 2% − 6% = −4% — a real pay cut despite a nominal raise.
10	Match	as above	Frictional = normal between-jobs search; structural = skills/location mismatch, often from automation or industry shift; cyclical = tied to the economy-wide business cycle; a discouraged worker (distinct from all three types of UNEMPLOYMENT) has left the labor force altogether.

Quantitative gate: PASS — every numeric answer re-computed: Q2 (216÷200)×100=108; Q3 (66÷60)×100=110; Q4 (121−110)÷110×100=10%; Q6 8÷100×100=8%; Q7 100÷200×100=50%; Q9 2−6=−4%.
Graph-logic check: PASS — (this week has no curve-shift item; the analogous "measurement-logic" check applies instead) every CPI-level-vs-inflation-rate distinction correctly drawn (Q1, Q2/Q4, Q5); every unemployment-rate/LFPR denominator correctly assigned (Q6 divides by labor force, Q7 by total population — never swapped); labor-force-membership rules correctly applied (Q8: active searching required; discouraged workers and non-seekers excluded); all three types of unemployment correctly matched to definitionally distinct examples (Q10).

Quality gate (self-checked): every single-answer item has exactly one correct option; distractors target the named traps (CPI level vs. inflation rate, wrong denominator for unemployment rate vs. LFPR, "no job = unemployed" vs. "must be searching," discouraged-worker exclusion, type-of-unemployment confusions). No free numeric entry; no essay.

This is the human-readable quiz with its vetted answer key and rationale. The import-ready Classic-QTI version (F-quiz-week-03-qti.xml) ships inside the course's .imscc package — it lands in the Canvas gradebook on import.

~ Prof. Ashford's edition · Fall 2026 · built with thecoursemaker.com