Macro (HW 3)

Hyperinflation is an inflation rate of​ _____ or higher that grinds the economy to a halt and causes a society to collapse. A. 50 percent a month B. 20 percent a year C. 50 percent a year D. 20 percent a month

50 percent a month; A

Describe the trends and fluctuations in the U.S. unemployment rate from 1980 to 2017. A. Each peak unemployment rate in the recessions of​ 1982, 1990-1991, and 2001 was lower than the previous one. B. The unemployment rate decreases in a recession and increases in an expansion. C. The unemployment rate shows an upward trend before 2000 and then a downward trend. D. The average unemployment rate from 1980 to 2017 was 5.5 percent.

The unemployment rate decreases in a recession and increases in an expansion; B

The output gap is real GDP minus​ _____ expressed as a percentage of​ _____. A. ​investment; potential GDP B. interest​ rate; interest rate C. potential​ GDP; potential GDP D. potential​ GDP; real GDP

potential GDP; real GDP

When the CPI​ _______. A. is​ constant, the inflation rate is negative B. ​falls, the inflation rate is positive and low C. rises​ slowly, the inflation rate is negative D. rises​ slowly, the inflation rate is low

rises​ slowly, the inflation rate is low; D

The labor force participation rate is the percentage of the​ _____ who are members of the labor force. A. number unemployed B. number of women C. ​part-time workers D. ​working-age population

working-age population

CPI​ = ______. A. ​[(Cost of CPI basket at​ current-period prices−Cost of CPI basket at​ base-period ​prices)÷Cost of CPI basket at​ current-period ​prices]×100 B. ​(Cost of CPI basket at​ base-period prices÷Cost of CPI basket at​ current-period ​prices)×100 C. ​(Cost of CPI basket at​ current-period prices÷Cost of CPI basket at​ base-period ​prices)×100 D. ​[(Cost of CPI basket at​ base-period prices−Cost of CPI basket at​ current-period ​prices)÷Cost of CPI basket at​ current-period ​prices]×100

​(Cost of CPI basket at​ current-period prices÷Cost of CPI basket at​ base-period ​prices)×100; C

What problems arise from the CPI​ bias? A. The bias in the CPI eliminates the need for people to shop in discount stores. B. Accumulated over a decade, a CPI bias of 1 percent a year adds up to almost a trillion dollars of additional government expenditures. C. The bias in the CPI decreases government outlays. D. A wage contract linked to the CPI gives the workers less real income than the firm intended.

Accumulated over a decade, a CPI bias of 1 percent a year adds up to almost a trillion dollars of additional government expenditures; B

An unemployed person​ ______. A. can hold a​ part-time job and be searching for a​ full-time job B. is not in the labor force C. wants​ work, has made specific efforts to find a job within the previous four​ weeks, or is waiting to be called back to a job from which he or she has been laid​ off, or is waiting to start a new job within 30 days D. may be a person who is employed at a job that does not use the skills they have accumulated at college or on previous jobs

C

Who in the following statements is a discouraged worker​? A. Nick is changing his job because he has had differences with his​ co-workers in his current company. B. Rachel does not find her current job profile interesting and is looking for alternate opportunities. C. Dan is available to work but has not looked for a job in the past eight weeks because of repeated applications but no single offer. D. Ned is available to work and has been sending job applications whenever he sees any suitable opportunity.

Dan; C

Which of the following statements illustrates structural unemployment​? A. Dell laid off many employees when the​ company's profits dropped during the recession. B. Jen quit her current job and found another one with a better pay scale. C. Many women quit jobs to raise their kids. D. Outsourcing resulted in many job losses in the mid 2000s.

Outsourcing resulted in many job losses in the mid 2000s; D

Which of the following statements illustrates frictional unemployment​? A. Many bank tellers lost their jobs due to the installation of ATM machines. B. Thousands of employees were laid off during the​ 2008-09 recession. C. Robin is quitting his current job to find another that has better prospects. D. Dave lost his job as he did not possess the technical skills required to do his duty.

Robin is quitting his current job to find another that has better prospects; C

Choose the correct statement. A. When the quality of a good improves over​ time, the CPI does not include the portion of the price rise attributable to the higher quality in its calculation. B. The CPI calculation assumes that everyone shops at discount stores and no one shops at convenience stores. C. Changes in relative prices lead consumers to change the items they​ buy, and the CPI reflects this substitution. D. When relative prices change and people substitute to the lower priced good, the CPI ignores the substitution and the CPI overstates inflation.

When relative prices change and people substitute to the lower priced good, the CPI ignores the substitution and the CPI overstates inflation; D

Cyclical unemployment is the fluctuating unemployment over the business cycle that increases during​ _____ and decreases during​ _____. A. ​imports; exports B. technological​ stagnation; technological advancements C. an​ expansion; a recession D. a​ recession; an expansion

a recession; an expansion

The natural unemployment rate is the unemployment rate when the economy is​ _____. A. facing high inflation B. facing high interest rates C. at full employment D. not at full employment

at full employment

A marginally attached worker is a person who does not have a​ job, is​ _____ and​ _____ to​ work, has​ _____ specific efforts to find a job within the previous​ _____ weeks, but has looked for work sometime in the recent past. A. not​ available; not​ willing; not​ made; four B. ​available; willing;​ made; six C. ​available; willing; not​ made; four D. ​available; willing; not​ made; six

available; willing, not made; four

The four price indexes that are alternatives to the CPI are​ ______. A. chained​ CPI, personal consumption expenditure​ deflator, core GDP​ deflator, and CPI deflator B. CPI​ deflator, chained personal consumption expenditure​ deflator, GDP​ deflator, and core PCE C. CPI​ deflator, personal consumption expenditure​ deflator, core GDP​ deflator, and core PCE D. chained​ CPI, personal consumption expenditure​ deflator, GDP​ deflator, and core PCE

chained​ CPI, personal consumption expenditure​ deflator, GDP​ deflator, and core PCE; D

The natural unemployment rate​ _______. A. changes as frictions and structural change occur in the economy B. constantly increases as technology moves jobs from labor to capital C. changes with the business cycle D. does not change. It remains constant until recalculated by the Congressional Budget Office

changes as frictions and structural change occur in the economy; A

Full employment is when there is no​ _____ unemployment​ or, equivalently, when all the unemployment is​ _____ or​ _____. A. ​cyclical; frictional; structural B. ​structural; frictional; natural C. ​frictional; structural; cyclical D. ​cyclical; structural; natural

cyclical; frictional; structural

A person is in the labor force if that person is​ _______. A. aged 16 and over and not in​ jail, hospital, or some other form of institutional care B. waiting to start a new job within the next 3 months C. either employed or unemployed D. neither working nor looking for work but has indicated that he or she wants and is available for a job and looked for work sometime in the recent past

either employed or unemployed

A person is not in the labor force if they are​ ______. A. in the​ working-age population but neither employed nor unemployed B. between the ages of 16 and 19 C. over 65 years of age D. unemployed

in the working-age population but neither employed or unemployed; A

The unemployment rate is the percentage of the people in the​ _____ who are unemployed. A. labor force B. age group of 20​ - 60 C. number of women and children D. number of disabled

labor force

The CPI is a​ _______. A. measure of inflation B. list of the items that an average urban household buys and the percentage weight of total expenditure given to each item C. measure of the price level of all goods and services that are counted as part of GDP D. measure of the average of the prices paid by urban consumers for a fixed basket of consumer goods and services

measure of the average of the prices paid by urban consumers for a fixed basket of consumer goods and services; D

The labor force is the number of people employed plus the​ _____. A. number of women unemployed B. ​working-age population C. number unemployed D. ​working-age population

number unemployed

The chained CPI​ ______. A. overcomes the sources of bias in the CPI by eliminating measures of the goods and services with the most volatile prices B. overcomes the sources of bias in the CPI by giving extra weight to the measures of the goods and services with the most volatile prices C. does not overcome the source of bias in the CPI D. overcomes the sources of bias in the CPI by incorporating substitutions and using current and previous period quantities

overcomes the sources of bias in the CPI by incorporating substitutions and using current and previous period quantities; D

Some unemployment is unavoidable because​ ______. A. many​ part-time workers would like to have​ full-time work B. people are making transitions through the stages of life and businesses are making transitions C. often people become discouraged workers D. many people in the​ working-age population attend school and are unemployed

people are making transitions through the stages of life and businesses are making transitions; B

Unemployment arises when​ ______. A. people leave their jobs and spend time searching for another job that better suits their abilities B. people leave the labor force C. firms​ close, people lose their​ jobs, and they become discouraged workers D. students decide to take time to travel following graduation

people leave their jobs and spend time searching for another job that better suits their abilities; A

The ​working-age population is the total number of​ _____ aged​ _____ years and over who are not in​ jail, hospital, or some other form of institutional care or in the U.S. Armed Forces A. ​workers; 18 B. ​people; 16 C. ​people; 15 D. ​graduates; 20

people; 16

The factors that might make the natural unemployment rate change include​ _______. A. the age distribution of the​ population, the output​ gap, the actual unemployment​ rate, and the real wage rate B. the actual unemployment​ rate, the scale of structural​ change, the nominal wage​ rate, and unemployment benefits C. the age distribution of the​ population, the scale of structural​ change, the real wage​ rate, and unemployment benefits D. the scale of structural​ change, the​ Z-Pop ratio, the output​ gap, and unemployment benefits

the age distribution of the​ population, the scale of structural​ change, the real wage​ rate, and unemployment benefits; C

The price level is​ ______. A. the average level of prices B. the average level of prices paid by urban consumers C. the average level of prices paid by urban consumers for all goods excluding food and energy D. equal to the inflation rate

the average level of prices; A

Cyclical unemployment is​ _______. An example of cyclical unemployment is​ _______. A. the higher than normal unemployment at a business cycle trough and the lower the normal unemployment at a business cycle​ peak; a restaurant worker who loses her job because of a downturn in the economy B. the higher than normal unemployment at a business cycle trough and the lower the normal unemployment at a business cycle​ peak; a ski instructor who loses his job during the summer C. a combination of structural unemployment and frictional​ unemployment; coal miners who are unemployed because new technology has made other types of energy cheaper and more accessible D. the unemployment that arises at full​ employment; an artist who paints but has no success selling her paintings

the higher than normal unemployment at a business cycle trough and the lower the normal unemployment at a business cycle​ peak; a restaurant worker who loses her job because of a downturn in the economy; A

The four main ways in which the CPI is an​ upward-biased measure of the price level are through​ _______. A. the new goods​ bias, the quality change​ bias, the commodity substitution​ bias, and the outlet substitution bias B. differences in wholesale and retail​ prices, differences in domestic and international​ prices, differences among various supply chain​ costs, and differences among wage rates in different states C. the intermediate goods​ bias, the​ bricks-and-mortar bias, the online​ bias, and the quality change bias D. sales​ taxes, subsidies,​ quotas, and vouchers

the new goods​ bias, the quality change​ bias, the commodity substitution​ bias, and the outlet substitution bias; A

The natural unemployment rate is​ _______. A. zero percent when an economy is experiencing a business cycle peak B. the unemployment rate when all unemployment is cyclical C. the unemployment rate when the economy is at full employment D. the unemployment rate when the economy is in an expansion

the unemployment rate when the economy is at full employment; C

Frictional unemployment is​ _______. An example of frictional unemployment is​ _______. A. the higher than normal unemployment at a business cycle trough and the lower the normal unemployment at a business cycle​ peak; a ski instructor who loses his job during the summer B. the unemployment that arises from normal labor turnover—from people entering and leaving the labor force and from the ongoing creation and destruction of​ jobs; an autoworker who loses his job because the automaker moved production to Mexico C. the unemployment that arises from normal labor turnover—from people entering and leaving the labor force and from the ongoing creation and destruction of​ jobs; new college graduates looking for work D. the unemployment that arises when changes in technology or international competition change the skills needed to perform jobs or change the locations of​ jobs; coal miners who are unemployed because new technology has made other types of energy cheaper and more accessible

the unemployment that arises from normal labor turnover—from people entering and leaving the labor force and from the ongoing creation and destruction of​ jobs; new college graduates looking for work; C

Structural unemployment is​ _______. An example of structural unemployment is​ _______. A. the higher than normal unemployment at a business cycle trough and the lower the normal unemployment at a business cycle​ peak; a ski instructor who loses his job during the summer B. the unemployment that arises when changes in technology or international competition change the skills needed to perform jobs or change the locations of​ jobs; coal miners who are unemployed because new technology has made other types of energy cheaper and more accessible C. the unemployment that arises when changes in technology or international competition change the skills needed to perform jobs or change the locations of​ jobs; older workers who leave the labor force rather than learn new skills Your answer is not correct. D. the unemployment that arises from normal labor turnover—from people entering and leaving the labor force and from the ongoing creation and destruction of​ jobs; an autoworker who loses his job because the automaker moved production to Mexico

the unemployment that arises when changes in technology or international competition change the skills needed to perform jobs or change the locations of​ jobs; coal miners who are unemployed because new technology has made other types of energy cheaper and more accessible; B

The core inflation rate is the annual percentage change in the​ _____ price index​ _____ the prices of food and energy. A. ​GDP; including B. ​PCE; excluding C. ​GDP; excluding D. ​PCE; including

​PCE; excluding; B

The inflation rate is calculated as ​ _________. A. ​[(CPI this year−CPI in the base ​year)÷CPI in the base ​year]×100 B. ​[(CPI in the base year−CPI last ​year)÷CPI this ​year]×100 C. ​[(CPI this year−CPI last ​year)÷CPI this ​year]×100 D. ​[(CPI this year−CPI last ​year)÷CPI last ​year]×100

​[(CPI this year−CPI last ​year)÷CPI last ​year]×100; D

The Consumer Price Index is a measure of the​ _____ of the prices paid by​ _____ consumers for a fixed market basket of consumption goods and services. A. ​sum; urban B. ​average; urban C. ​sum; rural D. ​average; rich

​average; urban; B