exam 2 intermacro

A country has a total civilian population (over age 16) of 300 million. Of this population, 225 million are employed, 25 million are unemployed, and the remainder of the population is not in the labor force. Then, the unemployment rate is .083. .150. .111. .100.

.100

The relative wages of college graduates have been increasing as a result of: -technology that improves the productivity of highly skilled workers -the abundance of highly educated workers in the global economy and large shifts in the demand curve as a result of globalization (scarcity of highly educated workers in the global economy) and skill-biased technical change -a smaller shift in the market for college graduates relative to the market for high-school graduates -cyclical unemployment

the abundance of highly educated workers in the global economy and large shifts in the demand curve as a result of globalization (scarcity of highly educated workers in the global economy) and skill-biased technical change

In the long run, the key determinant of the price level is the velocity of money. the money supply. the growth rate of money. real GDP.

the money supply

According to the bathtub model of unemployment, which of the following statements is true if a law permanently increases only the job finding rate? The natural rate of unemployment will fall. The unemployment rate will rise, but the natural rate of unemployment will be unchanged. The unemployment rate will fall, but the natural rate of unemployment will be unchanged. The natural rate of unemployment will rise.

the natural rate of unemployment will fall

The labor demand curve slopes downward because the marginal product of labor is diminishing as we add additional labor. True False

true

f a tax is imposed on labor supply and wages are rigid, wages and the employment-population ratio will be lower than the market clearing level after the shock. True False

true

An economy has 100 people divided among the following groups: 25 have full-time jobs, 20 have one part-time job, 5 have two part-time jobs, 10 would like to work and are looking for jobs, 10 would like to work but are so discouraged they have given up looking, 10 are running their own businesses, 10 are retired, and 10 are children. They are all civilian. The unemployment rate equals ______ %.

unemployment rate=unemployed/labor force, 1/70(100)=14.29%

If 21% of unemployed find jobs and 0.9% of the employed lose their jobs, the natural rate of unemployment will be: 4.8% 3.1% 4.1% 3.5%

0.009/0.21+.009= 4.1%

An economy has 100 people divided among the following groups: 25 have full-time jobs, 20 have one part-time job, 5 have two part-time jobs, 10 would like to work and are looking for jobs, 10 would like to work but are so discouraged they have given up looking, 10 are running their own businesses, 10 are retired, and 10 are children. They are all civilian. The total number of unemployed equals ______ people.

10

An economy has 100 people divided among the following groups: 25 have full-time jobs, 20 have one part-time job, 5 have two part-time jobs, 10 would like to work and are looking for jobs, 10 would like to work but are so discouraged they have given up looking, 10 are running their own businesses, 10 are retired, and 10 are children. They are all civilian. The total number of people Not in the Labor Force equals ________ people.

10+10=20

An economy has 100 people divided among the following groups: 25 have full-time jobs, 20 have one part-time job, 5 have two part-time jobs, 10 would like to work and are looking for jobs, 10 would like to work but are so discouraged they have given up looking, 10 are running their own businesses, 10 are retired, and 10 are children. They are all civilian. Answer the following numerical questions below. Round to 1 decimal point. The Civilian Adult Population equals.

100-10=90

An economy has 100 people divided among the following groups: 25 have full-time jobs, 20 have one part-time job, 5 have two part-time jobs, 10 would like to work and are looking for jobs, 10 would like to work but are so discouraged they have given up looking, 10 are running their own businesses, 10 are retired, and 10 are children. They are all civilian. The total labor force equals ______ people.

25+20+5+10+10=70

Suppose oil prices increase. This is a negative shock to labor demand. Which of the following is true? -Equilibrium wages are lower. -Employment is lower. Both of these choices are correct. -None of these choices are correct.

Both of these choices are correct.

An economy has 100 people divided among the following groups: 25 have full-time jobs, 20 have one part-time job, 5 have two part-time jobs, 10 would like to work and are looking for jobs, 10 would like to work but are so discouraged they have given up looking, 10 are running their own businesses, 10 are retired, and 10 are children. They are all civilian. The labor force participation rate equals ______ %.

LFPR=Lf/cp, 70/90 *100=77.8

he quantity theory of money says that a doubling of the growth rate in the money supply will, in the long run, lead to -a doubling of the price level. -a doubling of real GDP growth. -a decrease of inflation. -a doubling of inflation.

a doubling of inflation

The rise of the employment-population ratio in the United States is most likely explained by: -an increase in female participation in the labor force. -a decrease in unemployment benefits. -an increase in young people because of the baby boom. -improvements to capital.

an increase in female participation in the labor force.

The rise of the employment-population ratio in the United States is most likely explained by: a decrease in unemployment benefits. an increase in female participation in the labor force. an increase in young people because of the baby boom. improvements to capital.

an increase in female participation in the labor force.

Bob is not employed by anyone, and he does not care about finding a job and is not searching for a job. Bob is unemployed. True False

false

Bob is not employed by anyone, and he does not care about finding a job and is not searching for a job. Bob is unemployed. True False

false

Workers in Europe work fewer hours than in the United States, and thus per capita GDP is lower in Europe. Because per capita income is lower in Europe, Europeans are clearly worse off in terms of welfare than Americans. True False

false

If the price level in year 1 was equal to 100 and the price level in year 2 was equal to 1,000, in year 2 the country is experiencing: hyperinflation inflation stable prices deflation

hyperinflation

The unemployment rate in Europe has been higher than that in the U.S. during the last two decades because: of the productivity decline in the European economies and high oil prices in the 1970s of the combined effect of the inefficient unemployment insurance system and the productivity slowdown/high oil prices in the 1970s Europeans are not willing to work as much the European system of unemployment insurance is inefficiently designed

of the combined effect of the inefficient unemployment insurance system and the productivity slowdown/high oil prices in the 1970s

When computing the present discounted value (pdv) of a future stream of labor income, an increase in the interest rate will increase the pdv. have no impact on pdv. reduce the pdv. depend on the time path of income.

reduce the pdv