Exam 3 MACRO

marginal costs of adjusting prices.

Menu costs are the:

Real GDI

Refer to the data dashboard shown. Which indicator is a cross-check on GDP?

on average, prices went down across the economy

If you see that the consumer price index this year is lower than the consumer price index last year, this means that

2.4%

In May 2019, there were approximately 68,980,000 people in Japan's labor force. About 1,650,000 people were unemployed. What was the unemployment rate?

tendency to focus on nominal values instead of inflation-adjusted values.

Money illusion is the:

the natural (long-run equilibrium) rate of unemployment is 3.75%

If the frictional rate of unemployment is 1.45%, the structural rate of unemployment is 2.3%, and the total unemployment rate is 6%, then we can conclude that

-1.2%

Refer to the following table. What was the approximate output gap in 1998?

3.5%

In May 2019, Texas reported a civilian labor force of 14,012,711. The number of employed people was 13,516,387. What was the unemployment rate?

Daniela goes to the store and purchases roses with U.S. dollars.

Which of the following shows the medium of exchange function of money?

initial unemployment claims

Which of the following will probably rise when the economy is in a recession?

Keele, who lost her job after her company lost a lot of customers during an economic downturn

You have four friends. Which of your friends can be described as "cyclically unemployed"?

0.85%

You purchase a certificate of deposit and expect an inflation rate of 1.25% over the next year. Your nominal rate of interest is 2.1%. What is your expected real rate of return?

-0.15%

You purchase a certificate of deposit that earns an advertised rate of 1.75% interest per year. What is your real rate of return if the actual inflation rate is 1.9%?

higher the structural unemployment rate.

The higher the minimum wage, as compared to the equilibrium wage, the:

It is the fluctuations of GDP around the potential output

business cycle

the output that is possible when all resources are fully employed

An economy's potential output level is:

5,000,000

Suppose a labor market is described by the demand equation, Qd = 60 - 2w, and the supply equation, Qs = -10 + w, where Qd is the quantity demanded of labor (in Million), Qs is the quantity supplied of labor (in Million), and w is the wage (in dollars). If the government institutes a minimum wage of $25, how many workers will be unemployed in this market?

15,000,000

Suppose a labor market is described by the demand equation, Qd = 60 - 2w, and the supply equation, Qs = -10 + w, where Qd is the quantity demanded of labor (in Million), Qs is the quantity supplied of labor (in Million), and w is the wage (in dollars). If the government institutes a minimum wage of $25, how many workers will be willing to work in this market?

$23.33

Suppose a labor market is described by the demand equation, Qd = 60 - 2w, and the supply equation, Qs = -10 + w, where Qd is the quantity demanded of labor (in Million), Qs is the quantity supplied of labor (in Million), and w is the wage (in dollars). What is the equilibrium wage in this labor market?

rise above the equilibrium unemployment rate.

Suppose that an economy is in a recession. You would expect to see the unemployment rate:

decreased volatility of the U.S. economy.

The Great Moderation refers to the:

peak, recession, trough, expansion

The four stages of the business cycle are:

long run

The natural unemployment rate is also known as the _____ unemployment rate.

nominal interest rate minus the rate of inflation.

The real interest rate is the:

3.22%

The table shows consumer price index data for the United States. Based on this information, what is the rate of inflation in 2006?

2,003.1

The table shows statistics for three Canadian cities at several different points in time. What was the number of people (in thousands) in Montreal's labor force in January 2005?

181.6

The table shows statistics for three Canadian cities at several different points in time. What was the number of unemployed people (in thousands) in Montreal in January 2009?

234.2

The table shows statistics for three Canadian cities at several different points in time. What was the number of unemployed people (in thousands) in Toronto in January 2019?

seasonally adjusted data

What kind of data adjustment removes the effect of sales spikes due to the holiday season?

S&P 500

Which economic indicator tells you about the future expected profits of businesses?

The stock price for JPMorgan Chase & Co

Which of the following is a narrow indicator?

medium of exchange, store of value, and unit of account

Which of the following lists the functions of money?

Applications for unemployment benefits

Which of the following will fall when the economy is expanding?

on average, prices went up across the economy by 3%.

if you see that inflation between last year and this year is 3%, this means that:

extremely high rates of inflation.

Hyperinflation is:

149.8

What is Sri Lanka's GDP deflator if its nominal GDP is $88.9 billion (in current US$) and the real GDP is $59.34 billion?

$16.8 billion

What is Uganda's real GDP if its nominal GDP is $27.5 billion (in current US$), and the GDP deflator is 163.4?

GDP is 1.5% above potential GDP

if an economy has a positive output gap of 1.5%, this means

Find out what people typically buy, collect the prices from the stores where people shop, tally up the cost of the basket of goods and services, and calculate the inflation rate.

steps needed to calculate the inflation rate?

surplus of 6,000 workers.

Consider the graph of the labor market shown here. If the government mandates a minimum wage of $25, there is a labor:

3.7%

Refer to the following table that shows monthly data for Japan. What was the unemployment rate in January 2014?

an efficiency wage.

Henry Ford's $5 per day wage is an example of:

graph b and c

Consider these four graphs of the labor market, showing four different minimum wage levels. Which graph(s) shows a wage level where there is no unemployment?

$8,746

In 1971, the cost of a four-year college degree from a public university was about $1,410. The consumer price index was 40.48 in January 1971. If the current consumer price index is 251.1, what is the approximate cost of the four-year degree in current dollars?

$18,865

In 1995, when the consumer price index was 152.38, women earned a median income of $12,130 per year. If the consumer price index in 2015 was 236.99, how much was $12,130 in 2015 dollars?

price of all goods and services produced domestically.

The GDP deflator is an index that tracks the:

1.9%

Refer to the following table. What was the approximate output gap in 1999?

working but whose skills are not fully utilized

An underemployed person is one who is:

rise by 1.5%

Based on Okun's rule of thumb, if you forecast that the output gap will decline from 0% to -3%, the unemployment rate will:

10.13%

Consider the following basket of goods: 50 bottles of milk, 100 avocadoes, 50 apples, and eight pineapples. Suppose that last year, each bottle of milk was $2.50, each avocado was $1.50, each apple was $0.75, and each pineapple was $4. This year, each bottle of milk is $2.50, each avocado is $1.80, each apple is $0.80, and each pineapple is $4.30. What is the inflation rate between last year and this year?

increase by 2,000

Consider the labor market shown here. If an efficiency wage of $14 is instituted in this market, the number of workers willing to work will:

-6.5%

Refer to the following table. What was the approximate output gap in 1974?

6.2%

The table shows statistics for three Canadian cities at several different points in time. What was the unemployment rate in Montreal in January 2019?