Econ final

If the CPI this year is 240 and the CPI in the previous year was 200, what is the annual inflation rate?

20%

Part-time workers are defined as people who are working

less than 35 hours per week.

The Classical macroeconomic model proposes that

markets work efficiently to produce the best macroeconomic outcomes.

The inflation rate measures the

percentage change in the CPI from one year to the next year.

Structural unemployment is the result of

technology changes or foreign competition.

The CPI market basket

weights the goods and services according to the budget of an average urban household.

The items included in the CPI are

goods and services consumed by the typical urban household.

For the CPI to provide an accurate measure of the prices paid by urban consumers, it is necessary to

have a market basket that is consistent and corresponds to what households actually purchase.

Looking at the historical values for annual inflation in the United States as measured by the Consumer Price Index, it is clear that inflation was

higher on average during the 1970s than during the 1980s.

Which of the following ideas reflect the Monetarist macroeconomic model? i)​The Monetarist model supports the Classical model, in general. ii)​Decreases in the growth rate of the quantity of money trigger recessions. iii)​Government intervention is an appropriate tool to steady the economy.

i and ii

Economists agree that the CPI

is a possibly biased measure of the cost of living.

When the labor market is in equilibrium, real GDP ________ potential GDP.

is equal to

The shape of the productivity curve reflects the

law of diminishing marginal returns.

The CPI overstates inflation because the average consumer buys

less of those goods whose relative price has risen.

The real interest rate equals the

nominal interest rate minus the inflation rate.

The level of real GDP the economy produces at full employment is

potential GDP.

The ________ describes the relationship between the amount of labor employed and real GDP.

production function

If the real wage rate decreases from $14.00 per hour to $13.00 per hour, the

quantity demanded of labor increases.

The supply of labor is defined as the relationship between the real wage rate and the

quantity of labor supplied by households.

Labor productivity is defined as

real GDP per hour of labor.

Which of the following lists gives factors that increase labor productivity?

saving and investment in physical capital, expansion of human capital, and discovery of new technologies

A marginally attached worker is

someone who does not have a job but is available and willing to work but has not made specific efforts to find a job during the past 4 weeks.

The Keynesian macroeconomic model states that

the economy is inherently unstable and government intervention is required to maintain continued economic growth.

The unemployment rate at full employment is

the natural unemployment rate.

Frictional unemployment is the result of

the normal process of jobs being created and destroyed.

The labor market is in equilibrium whenever

the quantity of labor demanded equals the quantity of labor supplied.

If a private wage contract is agreed upon with a cost of living adjustment such that wage hikes are equal to increases in the CPI,

workers benefit because the CPI increases more rapidly than does the cost of living.

If the GDP price index is 137, this value means that prices have increased

37 percent since the base year

If the cost of the CPI market basket at current period prices is $1000 and the cost of the CPI market basket at base period prices is $250, the CPI is

400

Suppose a report from the Bureau of Labor Statistics states that the CPI for the year 2012 was 152. What is the percentage point increase in the prices of the goods and services since the reference base period?

52%

The quantity of labor demanded is the labor hours all

firms plan to hire at a given real wage rate.

If real GDP is $6,460 billion, the population is 184.6 million people, and aggregate hours is 170 billion hours, labor productivity is

$38.00 an hour.

The formula for the CPI is

(Cost of CPI market basket at current period prices ÷ Cost of CPI market basket at base period prices) × 100.

If real GDP was $13.1 trillion in 2013 and $13.3 in 2014, what is the growth rate?

1.5%

The value of the CPI for the reference base period is always

100

The inflation rate between last year and this year was 14 percent. The CPI was 118 this year. What was the CPI last year?

103.5

Suppose in year 1 the CPI is 90, in year 2 the CPI is 100, and in year 3 the CPI is 110. Then, inflation is

11 percent between years 1 and 2.

The reference base period that the BLS uses to measure the CPI is

1982-1984

Over the past 110 years, real GDP per person in the United States has grown at an average rate of about ________ per year.

2%

The highest unemployment rate in U.S. history was about

25 percent in 1933.

Economic growth is defined as

A sustained expansion of production possibilities.

Janae was fired from her job with Microsoft in the 2008-09 recession because Microsoft's sales dipped. Janae's unemployment would be best classified as

cyclical unemployment.

The production function displays

Diminishing returns

Involuntary part-time workers are not working more hours due to

Economic reasons

During an expansion, the unemployment rate generally

Falls

If real GDP grows at a faster rate than does population, then the standard of living, as measured by

Improves

According to the Rule of 70, if a country grows at 2.0 percent per year instead of 1.5 percent per year, how many fewer years will it take to double its level of real GDP?

It will take 11.6 years fewer.

The CPI is calculated by the Bureau of Labor Statistics on a frequency of every

Month

The CPI is a measure of the

average prices paid by consumers for a fixed basket of goods and services.

Cyclical unemployment includes people who become unemployed from

changes in the business cycle

In constructing the CPI, the BLS has to deal with commodity substitution bias, which is defined as

consumers' substitution of cheaper goods for goods whose prices increase.

8) People who are willing and able to work but are not looking for work because they have been discouraged by their previous futile efforts are called

discouraged workers.

In the Current Population Survey, a person is considered unemployed if the person

does not have a job and is actively looking for a job

In calculating the unemployment rate, part-time workers over the age of 16 are counted as

employed

Unemployment benefits in western Europe are more generous than in the United States. As a result, ________ in the United States.

frictional unemployment is lower

Jordan recently quit her job as a marketing consultant in Washington, D.C. and is looking for a better-paying job with an advertising agency in New York. Jordan is considered to be

frictionally unemployed.

Increases in human capital can come

from formal education and on-the-job learning.

Since 1980, the percentage of part-time workers who are part time for economic reasons

generally increased in recessions and decreased in expansions.

Which of the following makes the Consumer Price Index a less accurate measure of the cost of living? i.​The monthly price survey conducted to collect information about prices is very unreliable. ii.​The existence of a new goods bias in the calculation of the CPI iii.​The existence of a quality change bias in the calculation of the CPI

ii and iii

Which of the following statements about the CPI is (are) correct? i​The only significant bias in the CPI is the commodity substitution bias. ii.​The CPI probably overstates inflation by 1.1 percentage points a year. iii.​As far as the bias in the CPI is concerned, the new goods bias and the outlet substitution biases are irrelevant.

ii only

Since 1960, the labor force participation rate in the United States has

increased for women and decreased for men.

Phillip is a 22-year old who has no job and is available for work, but has not actively looked for a job in the last month. The Current Population Survey identifies Phillip as ________ , ________ the labor force, and ________ the working-age population.

not unemployed; not part of; part of

The labor force is the

number of employed people plus the number of unemployed people.

The Rule of 70, as applied to real GDP growth, can be used to find the

number of years it takes for the level of real GDP to double.

To measure the change in the standard of living, it is best to use the growth rate

of real GDP per person.

After 15 years with Ford Motor Corporation, one summer Cameron loses his job. His boss explained that his position has been downsized after the technological advances in automobile production. Cameron is best considered

structurally unemployed.