Econ 1

The _____ unemployment rate is the unemployment rate that arises from the effects of frictional plus structural unemployment.

natural

The aggregate price level is a measure of the:

overall level of prices in the economy.

The price index that serves as an "early warning signal" for inflation in the United States is the:

producer price index.

The figure shows the demand and supply of labor in a particular labor market where the quantity of labor per day is measured in numbers of workers. In theory, at the equilibrium wage, the unemployment rate is _____%.

0

The table shows a price index for 2005 through 2008. The inflation rate for 2007 was _____%.

10.0

An economy has five people: George, Sarah, Mason, Abbot, and Jin. George works for Plastics, Inc., 40 hours a week. Sarah works for Baker's United for 20 hours a week and would like to move from part-time work to full-time work. Mason has been looking for work and applying for jobs for the past six months after he finished completing his high school education. Abbot worked for Baker's United for the first six months of the year before he was fired; for the next four months Abbot sought work, but finally gave up looking for work when he realized that it was unlikely he would be able to find work in this economy. Jin is 70 years old and enjoys reading, needlepoint, and watching movies. In this economy the unemployment rate is _____%

33

There are 12,000 people living in Stopland. Of these 12,000 people, 1,000 are either too old to work or too young to work. Of the remaining individuals, 5,000 are employed with full-time jobs; 3,000 are employed part time, but wish to work full time; 1,000 are trying to find a new job, but still working full-time jobs; 1,000 are currently not working but are looking for work; and the remainder are discouraged workers. The government department in Stopland responsible for compiling unemployment statistics redefines the employed as including only those with full-time jobs, and the unemployed as including those who are unemployed plus those who are working part-time jobs. The new unemployment rate using this definition would be _____%.

40

An economy has five people: George, Sarah, Mason, Abbot, and Jin. George works for Plastics, Inc., 40 hours a week. Sarah works for Baker's United for 20 hours a week and would like to move from part-time work to full-time work. Mason has been looking for work and applying for jobs for the past six months after he finished completing his high school education. Abbot worked for Baker's United for the first six months of the year before he was fired; for the next four months Abbot sought work, but finally gave up looking for work when he realized that it was unlikely he would be able to find work in this economy. Jin is 70 years old and enjoys reading, needlepoint, and watching movies. In this economy, the labor force participation rate is _____%.

60

Marco expects the inflation rate to be 6%, and he is willing to pay a real interest rate of 3%. Jin expects the inflation rate to be 6%, and she is willing to lend money if she receives a real interest rate of 3%. If the actual inflation rate is 5% and the loan contract specifies a nominal interest rate of 9%, then:

Jin is glad she loaned out funds because her real rate of interest has risen.

Mary expects the inflation rate to be 5%, and she is willing to pay a real interest rate of 3%. Joe expects the inflation rate to be 5%, and he is willing to lend money if he receives a real interest rate of 3%. If the actual inflation rate is 6% and the loan contract specifies a nominal interest rate of 8%, then:

Mary is glad she borrowed the funds because her real interest rate has fallen.

_____ unemployment is caused by the minimum wage.

Structural

If the real interest rate is 6% and the nominal interest rate is 5%, then the economy is experiencing:

deflation

A _____ unemployment rate usually implies that it is difficult to find a job.

high

In a period of deflation:

lenders benefit, because they are repaid dollars with greater real value than they anticipated when signing the loan contract.

Cyclical unemployment is:

the deviation of the actual unemployment rate from the natural rate of unemployment.