Chapter 9 Quiz

Which of the following formulas does the Bureau of Labor Statistics use to calculate the unemployment rate?

(Number of unemployed/Number in labor force) x 100

When the economy is at full employment

- the unemployment rate is greater than zero - the natural rate of unemployment prevails - all remaining unemployment is either frictional or structural

As of April 2017, which of the following demographic groups has the highest unemployment rate?

African Americans

Which of the following can give an early warning of future increases in the price level?

Producer price index

What effect do labor unions have on the unemployment rate?

Since few non-government workers are unionized, there is no significant effect on the unemployment rate

Indicate whether the following statement is true or false and why. "A wage rising slower than the rate of inflation is actually falling."

True. If wages are increasing slower than the average price of goods and services, purchasing power falls.

The true cost of borrowing and lending is best measures by

the real interest rate