power of the average consumer decreases due to a sluggish economy. 3. If the Lorenz Curve were used to graph the distribution of income in an economy where all households earn the exact same income, the graph would show a _____. A)straight line and sloped diagonally upward B)straight line and sloped diagonally downward C)curved line and sloped diagonally upward D)curved line and sloped diagonally downward 4. The rate of inflation, excluding the effects of food and energy prices, is _____. A)the wage-price spiral B)hyperinflation C)the core inflation rate D)the price index 5. All of the following are causes of structural unemployment except _____. A)relocating jobs to other countries B)inventing new ways of doing things C)falling of the stock market D)discovering new resources 6. Which of the following statements refers to the wage-price spiral process? A)A worker receives a raise, which increases costs for the employer. B)An employee loses his or her job, finds a position at another company, and is underemployed. C)Employees only receive a raise when their purchasing power has been eroded by inflation. D)The salary of a worker fluctuates with the amount of sales he or she accomplishes per month. 7. So-called discouraged workers are _____. A)considered underemployed B)included in the calculation of the labor force C)not counted in the unemployment rate D)counted in the unemployment rate 8. To determine the unemployment rate, the Bureau of Labor Statistics polls a sample population of _____. A)80,000 families B)80,000 unemployed individuals C)50,000 unemployed individuals D)50,000 families 9. Which of the following is an enterprise zone? A)an area of high unemployment where the government encourages companies to locate by providing tax breaks B)a part of a city with many old, closed factories C)a government office where unemployed and underemployed people can work in exchange for temporary assistance D)a wealthy, rural area where everybody has a good job 10. If there was a recent downturn in the economy and economists predicted a recession, then there is a strong possibility that there would be a _____. A)rise in structural unemployment B)fall in structural unemployment C)rise in cyclical unemployment D)rise in frictional unemployment 11. What is the Consumer Price Index (CPI)? A)a measure of prices of housing and rental costs all over the country B)an index of prices of items used by manufacturers and retailers C)an index determined by measuring the price of standard goods bought by urban consumers D)an index of the cost of living for all U.S. consumers 12. Typically, the inflation rate does not cause problems for the economy when it is between _____. A)2 and 3 percent B)2 and 4 percent C)1 and 3 percent D)1 and 4 percent 13. What age group in the United States has the largest percentage of its members living in poverty? A)young adults B)the middle aged C)children D)the elderly 14. If Bob loses his job at the GM plant because car manufacturing is slow due to a downturn in the economy, you can conclude that he is _____. A)seasonally unemployed B)structurally unemployed C)frictionally unemployed D)cyclically unemployed 15. The percentage of people who live in households with income below the official poverty line is referred to as _____. A)the poverty threshold B)workfare C)income distribution D)the poverty rate