Macro exam 2

If the government imposes a minimum wage of $4, how many workers will be employed?

3,000

structural unemployment

unemployment resulting from industrial reorganization, typically due to technological change, rather than fluctuations in supply or demand.

Iggie took a university teaching job as an assistant professor in 1980 at a salary of $15,000. By 2011, she had been promoted to full professor, with a salary of $70,000. If the price index was 82 in 1980 and 225 in 2011, then what is Iggie's 1980 salary in 2011 dollars?

$41,159

Henri earned a salary of 50,000 in 2001 and 60,000 in 2012. The consumer price index was 177 in 2001 and 225 in 2012. Henri's 2001 salary in 2012 is

$63,559.32.

In 1972, one could buy a bag of chips, a pound of hamburger, a package of buns, and a small bag of charcoal for about $2.50. If the same goods today cost $6.00, then which pair of CPIs would make the cost in today's dollars the same for both years?

$65 in 1972 and $156 today

GDP measures 2 Things

1. The total Income of everyone in the economy 2. The total expenditure on the economy's output of goods and services For an economy as a whole income must equal expenditure

In June 2009 the Bureau of Labor Statistics reported an adult population of 234.9 million unemployment of 12.4 million and employment of 141.6 million. Based on these numbers the labor-force participation rate was

154/234.9.

If the nominal interest rate is four percent and the real interest rate is 7 percent then the inflation rate is

3%

The relative importance of housing in the breakdown of consumer spending is

43 %

The relative importance of housing in the breakdown of consumer spending is

43 percent.

The GDP deflator reflects

A measure of the price level- measures the current level of prices relative to the level of prices in the base year Nominal GDP / Real GDP x 100 GDP deflator in base year is always 100

Sam, an American citizen, prepares meals for his family at home. Ellen, a Canadian citizen, commutes to the U.S. to help prepare meals at a restaurant in Idaho. Whose value of services preparing meals is included in U.S. GDP?

Ellen's but not Sam's

A country reported a nominal GDP of $85 billion in 2007 and $100 billion in 2006, and reported a GDP deflator of 100 in 2007 and 105 in 2006. What happened to real output and prices from 2006 to 2007?

Real output and prices both fell.

In the equation Y = C + I + G + NX

Y represents the economy's total expenditure.

Jamarcus works part-time as a pizza delivery person in a college town. The Bureau of Labor Statistics counts Jamarcus as

as employed and in the labor force

Country A has twice as many workers as Country B. Country A also has twice as much physical capital, twice as much human capital, and access to twice as many natural resources as Country B. Assuming constant-returns to scale, which of the following is higher in Country A?

both-output per worker and productivity

A farmer sells five pounds of pecans to a Smith's Fresh Pecans for $10. Smith's Fresh Pecans resells three pounds for $4.50 per pound. The remaining pecans are shelled and canned and sold for a total of $8.00 Taking these transactions into account, how much is added to GDP?

c. $21.50

Which of the following is among the four industries with the largest employment in the U.S today?

communications

Workers waiting for jobs to open up is most closely associated with

cyclicle

An increase in minimum wage

decreases the quantity of labor demanded but increases the quantity of labor supplied.

In the basket of goods that is used to compute the consumer price index, which of the following categories of consumer spending is the largest?

education& communication, recreation, medical care.

the theory of efficiency wages explains why

firms may be included to keep their workers' wages above the equilibrium level

Recently the U.S national income accounts have switched to calling government purchases

government consumption expenditure and gross investment

Nominal GDP will increase

if either the price level or the quantity of goods and services produced rises.

If an economies GDP falls then it must be the case that the economies

income and expenditures both fall

Megan is a landscaper. Which of the following are included in her physical capital

lawnmower/equipment

In the United States in the late 1970's nominal interest rates were high and inflation rates were high. As a result real interest rates were

lower

If nominal GDP is $10 trillion and real GDP is $12 trillion, then the GDP deflator is

nominal x real x 100= 83.33

Real GDP will increase

only if the quantity of final goods and services produced rises.

In the equation for the production function Y/L represents

productivity

If nominal GDP doubles and the GDP deflator doubles, then real GDP

quadruples

If over a short time there is an increase in the number of people retired and a decrease in the number of people working, then productivity

rises but real GDP per person falls.

If the CPI was 125 this year and 120 last year, then

the cost of the CPI basket of goods and services increased by 4.2 percent this year, the price level increased by 4.2 percent this year, and the inflation rate for this year was 4.2 percent

Disposable personal income is the income that

the income that households and non corporate business have left after satisfying all their obligations to the government. It equals personal income minus personal taxes and certain non tax payments (such as traffic tickets)

All else equal, if there are diminishing returns, then if a country raised its capital by 100 unites last year and by 100 unites this year

the increase in output was greater last year than this ye

frictional unemployment

the unemployment which exists in any economy due to people being in the process of moving from one job to another.