Chapter 9 Homework
Your father earned $34,000 per year in 1984. To the nearest dollar, what is that equivalent to in 2008 if the CPI in 2008 is 215 and the CPI in 1984 is 104?
$70,288
Why is the unemployment rate, as measured by the Bureau of Labor Statistics, an imperfect measure of the extent of joblessness in the economy?
All of the above
According to Costco's CEO, Jim Sinegal: "Paying good wages and keeping your people working for you is good business... Imagine that you have 120,000 loyal ambassadors out there who are constantly saying good things about Costco. It has to be a significant advantage for you." What is Costco's CEO referring to?
Efficiency wages
What is typical of the length of employment in the modern (post-Great Depression-era) U.S. economy?
Employment lasts less than six months.
Suppose John is currently unemployed. Each day, John spends the entire day searching for available job openings for an appropriate position given his set of skills, abilities, and interests. If someone asks John what he does for work, he tells them that he is currently "in-between jobs." Which of the following classifies John's unemployment status?
Frictionally unemployed
The BLS uses the establishment survey to collect information on employment in the economy. Indicate one drawback of the establishment survey compared to the current population survey and indicate one advantage.
It is based on company payroll and not on unverifiable answers. It does not include information about self-employed people.
Which of the following formulas does the BLS use to calculate the unemployment rate?
Number of unemployed / Number in labor force x 100
Which of the following can give an early warning of future increases in the price level?
Producer price index
What effect do labor unions have on the unemployment rate?
Since few non-government workers are unionized, there is no significant effect on the unemployment rate.
How does the U.S. economy create and destroy millions of jobs each year?
Some businesses are expanding, while others are contracting. In the market system, new firms are constantly entering and exiting various industries.
Suppose that Sally recently lost her job as an underwater welder. In looking for a new job, she discovers that the only available jobs are for economists and that there are no openings for underwater welders because the trade is now obsolete. If Sally decides to return to school to earn an Economics degree, what is the best classification of her unemployment status?
Structurally unemployed
How do unemployment insurance payments in the United States and social insurance programs in other countries increase the unemployment rate?
They decrease the opportunity cost of job search.
When the economy is at full employment
all of the above
Which of the following makes changes in the CPI overstate the true inflation rate?
all of the above
If firms pay what are called "efficiency wages," they pay wages that
motivate workers to increase their productivity.
