Econ Test 2

Suppose that the natural unemployment rate is 4.5 percent and the actual unemployment rate is 3.5 percent. Then cyclical unemployment is

-1

Growth in the Supply of Labor

1. Average hours per worker 2. Employment-to-population ratio 3. The working-age population growth

The real wage rate will fall if the

labor supply curve shifts rightward and the labor demand curve does not

unemployment rate

# of people unemployed / labor force x 100

Based on the table above, gross domestic product equals

$2,465

The above table shows national income accounting data for a nation, in this nation GDP is equal to BLANK billion

$2,800

The information in the table above gives the 2016 reference base period CPI basket and prices used to construct the CPI for a small nation. It also has the 2017 prices. What is the value of the CPI for 2017?

140

Employment-to-population ratio

Number of employed people/working-age population x 100

labor force

employed + unemployed

If capital per worker rises

labor productivity increases

In september 2014, the official U-3 unemployment rate dropped from 6.1 percent to 5.9 percent this change could have been caused by

unemployed workers giving up looking for a job

The cost of inflation to society includes

unpredictable changes in the value of money

Chained-dollar real GDP

1. Real GDP of both years in reference to base year 2. Percent Change in relation to base year 3. Real GDP of both years in reference to other year 4. Percent Change in relation to base year 5. Average of Percents Change 6. Multiply base year Real GDP by Avg Percent Change

At the end of the year, the CPI equaled 120. At the end of the year, the CPI equals 132. What is the inflation rate over this year?

10%

In the above table, the inflation rate between 2013 and 2014 is approximately

10%

The information in the table above gives the 2016 reference base period CPI basket and prices used to construct the CPI for a small nation. It also has the 2017 prices. What is the value of the CPI for the reference base period, 2016?

100

If the CPI was 132.5 at the end of last year and 140.2 at the end of this year, the inflation rate over these two years was

5.8%

Using the information in the above table, the labor force participation rate is

67.1%

If this year the price level is 135 and last year it was 125, the inflation rate is

8%

In 2011, Armenia had a real GDP of $4.21 billion and a population of 2.98 million. In 2012, real GDP was $4.59 billion and population was 2.97 million. What was Armenia's economic growth rate from 2011 to 2012?

9%

What is labor supplied?

The number of hours a worker is supplying in that market

What is the demand for labor?

The number of hours demanded by the firms

Suppose real GDP for a country is $13 trillion in 2015, $14 trillion in 2016, $15 trillion in 2017, and $16 trillion in 2018. Over this time period, the real GDP growth rate is

Decreasing

How do we grow potential GDP?

Growth in the supply of labor and in labor productivity

Growth of Labor Productivity

Increase in capital or technological advances

Which of the following measurements of inflation tracks the rate at which infrequency changed prices are changing?

The sticky-price CPI

Reported GDP increases when, in fact, total production is unchanged when

There is a shift from household production to market production and a previously illegal activity is legalized

Suppose the population of Tiny Town is 100 people and the working age population is 70. If 10 of these people are unemployed, the unemployment rate in Tiny Town is

There is not enough information provided

Which of the following is true regarding real GDP

Value of total production and does not measure all that is produced

aggregate production function

a hypothetical function that shows how productivity (real GDP per worker) depends on the quantities of physical capital per worker and human capital per worker as well as the state of technology

Of the following sequences of price levels, which correctly represents a 5% inflation rate?

100,105,110.25,115.76

Last year's price level was 120 and since then there has been a 5% inflation. This year's price level is

126

The CPI basket contains 400 oranges and 800 pens. In the base year, the price of an orange is $1.00 and the price of a pen is $0.75. This year, urban consumers each buy 300 oranges at $2.00 each and 850 pens at $1.00 each. The CPI this year is

160

Suppose the price level this year is 150 and the price level last year was 125. The inflation rate between last year and this year was

20%

At the end of last year the Consumer Price Index was equal to 157.5 and at the end of this year it was equal to 163.8. What is the inflation rate over this time period?

4%

In the above table, the employment to population ratio is

44%

From September 2013 to September 2014, the employment-to-population ratio increased from 58.6 percent to 59.0 percent. This change could have been the result of

A decrease in the working-age population

The national unemployment rate

All of the above

Which of the followinf ideas apply to the neoclassical growth theory?

All of the above

When labor productivity increases, the demand for labor curve BLANK and the supply of labor curve BLANK

Shifts rightward, does not shift

The quantity of labor supplied depends on the

real wage rate not the money wage rate

aggregate labor market

relationship between quantity of labor employed and quantity of real GDP produced. looks at supply of labor vs demand for labor

When calculating the compensation of employees, part of GDP

social security contributions must be included

The industrial revolution in england in large was the result of

technological innovations encouraged by the patent system

According to the Economic Times (09/2012), Standard & Poor's forecast for India's GDP growth rate was cut by 1 percentage point to 5.5 percent as the entire Asia Pacific region feels the pressure of ongoing economic uncertainty. India has averaged 7 percent growth in GDP since 1997. Which of the following is TRUE?

India's PPF has been shifting rightward since 1997

If a new and better good replaced an older and less expensive good, then the price level measured by the CPI

Is higher than the actual price level

A discouraged worker BLANK counted as officially unemployed and BLANK counted as in the labor force

Is not, is not

labor force participation rate

Labor force / working-age population x 100

As labor increases, there is a

Movement along the aggregate production function and real GDP will increase less with each additional increase in labor

BLANK refers to a period when the BLANK decreases

Productivty growth slowdown, growth rate of output per person

Purchasing power parity prices are used to construct GDP data that

can be used to make more valid comparisons between one country and another

The largest component of national income is

compensation of employees

The commodity substitution bias is that

consumers decrease the quantity they buy of goods whose relative prices rise and increase the quantity of goods whose relative price falls

If the nation's capital stock increases so that workers become more productive, the...

demand for labor will increase

The percentage of people employed ages 16 years and older divided by the working-age population is known as the

employment-to-population ratio