Eco 2023 chap 9

An efficiency wage

is higher than the market wage and tends to increase productivity

The nominal interest rate equals the real interest rate ________ the inflation rate.

plus

The average price of goods and services in the economy is also known as

price level

Which of the following policies would reduce structural unemployment?

a job retraining program

Which of the following would increase the unemployment rate?

an increase in unemployment insurance payments

Cyclical unemployment is the result of

a slowdown in the economy

The labor force equals the number of people

employed plus unemployed

The labor force participation rate for this simple economy equals

(1,100/15,000) × 100.

The unemployment rate for this simple economy equals

(100/1,100) × 100

If the price level rose in three consecutive years from 100 to 120 to 140, then the annual inflation rate over those years would

decrease

A student who just graduated from college but has

frictionally unemployed.

The U.S. unemployment insurance program

increases the amount of time the unemployed spend searching for a job.

The stated interest rate on a loan is the

nominal interest rate

If the minimum wage is set above the market wage

unemployment will rise

Assume the market basket for the consumer price index has two products—bread and milk—with the following values in 2013 and 2018 for price and quantity: The Consumer Price Index for 2018 equals

116

Consider the following values of the consumer price index for 1996, 1997, and 1998: The inflation rate for 1997 was equal to

2.5 percent.

If the nominal rate of interest is 6.5% and the inflation rate is 3.0%, what is the real rate of interest?

3.5%

Structural unemployment is the result of

a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs.

Which of the following describes a situation in which the person is hurt by inflation?

a person paid a fixed income during an inflationary period

When actual inflation is less than expected inflation

borrowers lose and lenders gain

Which of the following would be the best measure of the cost of living?

consumer price index

The real wage equals the nominal wage ________ the CPI, all times 100.

divided by

The Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill.

employed

The natural rate of unemployment is the amount of unemployment

equal to frictional plus structural unemployment

The percent increase in the CPI from one year to the next is a measure of the

inflation rate

Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as

not in the labor force

The unemployment rate is an important economic statistic that can tell us about the health of the economy. If the unemployment rate turns out to be high or higher than anticipated, we would expect

that stock prices are more likely to fall.

The real rate of interest is

the nominal interest rate minus the inflation rate.

Frictional unemployment is the result of

the process of matching workers with jobs

When deflation occurs

the real interest rate is greater than the nominal interest rate