macro quiz

Which of the following is a problem in measuring consumer prices?

The consumer price index does not account for product substitution. The consumer price index is not easy to adjust to changes in the quality of products. It takes time to to include new products in the consumer price index.

Retirees and creditors:

are hurt by inflation because their purchasing power drops.

What are the types of employment?

cyclical, frictional, structural

If your salary was $50,000 last year and this year you receive a cost-of-living increase tied to the consumer price index (CPI), what will your salary be, assuming the CPI has risen from 110 to 114?

$51,818

If nominal GDP in 2014 is $20,000 billion while real GDP is $16,000 billion, then the GDP deflator in 2014 is:

125

In January 1980, the CPI stood at 77.8, and by January 2006, it was 198.3. By (approximately) what percentage have consumer prices increased over this period?

154%

Population 500 Number employed 300 Number unemployed 50 According to the table, what is the labor force of this economy?

350

In the United States, people are considered UNEMPLOYED if and when they

do not have a job but are available for work and have been actively seeking work.

Which of the following actions would reduce frictional unemployment?

holding job fairs

Jordan Meadows lost his job as an airline pilot and has not been able to find another job as a pilot. Since he is old enough to be eligible for his pension, he decides to retire and devote himself to caring for his elderly parents, According to the Bureau of Labor Statistics, Jordan is:

not in the labor force

Full employment:

occurs if cyclical unemployment is zero.

Cyclical unemployment occurs when:

the economy slows down and workers are laid off.

Suppose a person works hard at a job after graduation and after her first year, her effort is rewarded with a 3% raise when the average wage increase in her company is 2%. Later, the government releases its inflation report and says that inflation is running at 5%. Given this information, which of these is TRUE of her standard of living?

A:It did not improve because the purchasing power of her income is less than what it was last year. B:It increased by the amount of inflation of 5%. C:It improved because the 3% raise is enough to offset the average rise in prices. D:It remained the same because the rate of inflation has no influence on her standard of living.

The GDP deflator is an index that includes

Consumer goods Investment goods government goods and services

Since the invention of automatic teller machines, many bank tellers have lost their job. This is an example of ______ unemployment.

Structural