ECON 102 Exam 2 - Ch. 5

In 2011, Armenia had a real GDP of approximately $4.21 billion and a population of 2.98 million. In 2012, real GDP was $4.59 billion and population was 2.97 million. Armenia's real GDP per person in 2012 was

A) $1,545.

During 2014, the country of Economia had a real GDP of $115 billion and the population was 0.9 billion. In 2013, real GDP was 105 billion and the population was 0.85 billion. In 2013, real GDP per person was

A) $124.

If the CPI at the end of last year was 100 and the CPI at the end of this year was 115, the inflation rate was

A) 15 percent.

In the above table, the unemployment rate is

A) 29 percent.

From September 2013 to September 2014, the employment-to-population ratio increased from 58.6 percent to 59.0 percent. This change could have been the result of

A) a decrease in the working-age population.

The best definition for economic growth is

A) a sustained expansion of production possibilities measured as the increase in real GDP over a given period.

Cyclical unemployment ________.

A) decreases during an expansion

The percentage of people employed aged 16 years and older divided by the working-age population is known as the

A) employment-to-population ratio.

If the inflationrate is negative, the price level in an economy is

A) falling.

When a person reenters the labor force and looks for a job after spending time at home raising a child

A) frictional unemployment increases.

Frictional unemployment

A) is unemployment associated with normal labor turnover.

The biases in the CPI include the

A) new goods, quality change, and substitution biases.

The natural unemployment rate

A) rises with an increase in structural unemployment.

In the 1990s, video recordings were made primarily on tapes. However, in the 2000s DVDs became increasingly popular, leading to a sharp decline in video tapes. As a result, many people who manufactured tapes lost their jobs and didn't have the skills necessary to work making DVDs. This occurrence is best consider an example of

A) structural unemployment.

When cyclical unemployment increases and other things remain the same, ________.

A) the natural unemployment rate does not change

Assume the inflation rate falls from 4 percent to 2 percent. This means that

A) the price level is increasing more slowly.

If the population is 300 million, with 70 million under the age of 16 and institutionalized, another 70 million not in the labor force, 10 million unemployed and 150 million employed, the employment-to-population ratios

B) 50 percent

Slowdonia's current growth rate of real GDP per person is 1 percent a year. Approximately how long will it take to double real GDP per person?

B) 70 years

In an economy, 23 million people are employed and 2 million are unemployed, but 5 million part-time workers would prefer full-time work. What is the unemployment rate?

B) 8 percent

According to the Economic Times (09/2012), Standard & Poor's forecast for India's GDP growth rate was cut by 1 percentage point to 5.5 percent as the entire Asia Pacific region feels the pressure of ongoing economic uncertainty. India has averaged 7 percent growth in GDP since 1997. Which of the following is TRUE?

B) India's PPF has been shifting rightward since 1997.

Which of the following decreases the official U-3 unemployment rate?

B) Workers leave the labor force.

Between September 2013 and September 2014 the number of discouraged workers decreased from 852,000 to 698,000. Assuming the change resulted from discouraged workers starting to make specific efforts to find a job again, this change creates

B) a decrease in the labor force participation rate.

Structural unemployment is

B) almost always short-term in nature.

Economic growth is measured by

B) changes in real GDP.

The type of unemployment created by the normal rate of reentry and entry into the labor force is

B) frictional unemployment.

Because of a bank merger, Ms. Davis lost her positionas Vice President and had to seek work with other banks. Ms. Davis has the skills necessary to find a new job, thus she is best considered as

B) frictionally unemployed.

September 2014, 32 percent of unemployed workers had been unemployed for 6 months or more. This long-term unemployment is of particular concern because

B) long-term unemployment is the most costly type of unemployment.

37) In 2012, consumers in Dexter consumed only books and pens. The prices and quantities for 2012 and 2013 are listed in the table above. The reference base period for Dexter's CPI is 2012. What is the cost of the CPI basket in 2013?

C) $540

Suppose the economy is experiencing frictional unemployment of 1 percent, structural unemployment of 3 percent and cyclical unemployment of 4 percent. What is the natural unemployment rate?

C) 4 percent

Suppose that last year the Consumer Price Index was 124; this year it is 130.7. What was the inflation rate between these years?

C) 5.4 percent

Using the data in the above table, the labor force participation rate is

C) 75.7 percent.

If the number of people unemployed is 100, the number of people employed is 1000, and the working-age population is 1400, then the unemployment rate is

C) 9.1 percent.

Discouraged workers ________ counted as officially unemployed because they ________.

C) are not; are not actively seeking work

The cost of inflation to society includes

C) both I and II I.the opportunity costs of resources used by people to protect themselves against inflation. II.the diversion of productive resources to forecasting inflation.

The unemployment rate is at the natural unemployment rate when

C) cyclical unemployment equals zero.

Suppose real GDP for a country is $13 trillion in 2015, $14 trillion in 2016, $15 trillion in 2017, and $16 trillion in 2018. Over this time period, the real GDP growth rate is

C) decreasing.

When a worker quits a job to look for a better job

C) frictional unemployment increases.

An example of the new goods bias in the CPI is the

C) introduction of hybrid automobiles, vehicles that were not made until recently.

Suppose that the price level was 100 in 2011, 110 in 2012, and 130 in 2013. Over these three years

C) the inflation rate was positive and accelerating.

The Consumer Price Index is a measure of the average of the prices paid by ________for a fixed basket of consumer goods and services.

C) urban consumers

49) If the basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year, the CPI for the latter year equals

D) 225.

In 2011, Armenia had a real GDP of $4.21 billion and a population of 2.98 million. In 2012, real GDP was $4.59 billion and population was 2.97 million. What was Armenia's economic growth rate from 2011 to 2012?

D) 9.0 percent

When the economy is operating at full employment, the natural unemployment rate consists of only

D) frictional and structural unemployment.

Real GDP per person in the country of Flip is $10,000, and the growth rate is 10 percent a year. Real GDP per person in the country of Flap is $20,000 and the growth rate is 5 percent a year. When will real GDP per person be greater in Flip than in Flap?

D) in 15 years

Which of the following people would be considered unemployed by the Bureau of Labor Statistics?

D) neither I nor II

Which of the following is NOTincluded in the working-age population?

D) people in prison

Structural unemployment is the result of

D) technological change or foreign competition.

An individual is structurally unemployed if

D) the individual lacks marketable job skills because technology has changed.

Cyclical unemployment is the result of

the business cycle.