macroeconomics test 2

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The ____ equals the number of ____

labor force; unemployed and employed persons

because of the biases in calculating the CPI, actual inflation is

less than the measured inflation rate by about 1 percent per year

if unemployment is at the natural rate, then there

no cyclical unemployment

unemployment caused by changes in technology is called ____

structural unemployment

if real GDP is $13,500 billion and aggregate hours are 110 billion, labor productivity equals

$123 per hour

If the CPI was 122.3 at the end of last year and 124.5 at the end of this year, the inflation rate over these two years was

1.8 percent

based off of the following data for tiny town, the unemployment rate equals Population-100 Labor Force-80 Number of employed persons- 70 Number of discouraged workers-5

10/80 x 100

if the basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year, the CPI for the latter year equals

225

during 2013, the country of economia had a real GDP of $115 billion and the population was 0.9 billion. in 2012, real GDP was 105 billion and the population was 0.85 billion. Economia's growth rate of real GDP per person is

3.23 percent

the commodity substation bias is that

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

discouraged workers fall into which population category

Not in the labor force

if the real wage rate is such so that the quantity of labor supplied equals the quantity of labor demanded

a full employment equilibrium occurs, and actual gdp equals potential gdp

labor force participation is calculated as the

a labor force divided by the working age population then multiplied by 100

economic growth is measured by

changes in real GDP

if a worker is temporarily laid off because the economy is in a recession

cyclical unemployment increases

cyclical unemployment ___ during expansions and ____ during recessions

decrease; increase

an advance in technology shifts the production function upward and shifts the labor

demand curve right

the relationship between the labor employed by a firm and the real wage rate is shown by the

demand for labor curve

the demand for labor curve is

downward sloping

if the inflation rate is negative, the price level in economy is

falling

This type of unemployment reflects the normal amount of unemployed workers who possess skills that will enable them to find another job.

frictional unemployment

when the unemployment rate is less than the natural unemployment rate, real gdp is ___ than potential gdp and the output gap is ___

greater; positive

potential GDP per labor hour can increase due to

increase in labor productivity

an increase in the price level is defined as

inflation

activities that encourage faster growth are

investment in new capital and human capital

an individual who has stopped looking for a job but has looked in the past and still wants a job is referred to as

marginally attached worker

best definition for unemployment

not working and not looking for a job

during a recession, the ___

number of marginally attached increases

full employment occurs

only if the unemployment rate is equal to the natural unemployment rate

all of the following contribute to labor productivity growth except

population growth

in the labor market, an increase in labor productivity ____ the real wage rate and ____ the level of employment.

raises; increases

if the economy is at full employment

real GDP equals potential GDP

the CPI is a measure of the average of the prices paid by ___ for a fixed basket of consumer goods and services.

urban consumers

Along the aggregate production function, as the quantity of labor rises, real GDP

rises

as labor continues to increase, a nation will

see a movement along the aggregate production function, but real GDP will increase less and less

the unemployment rate will never equal zero percent because

some portion of the labor force will always be between jobs

when the economy switches production toward services and away from manufacturing and workers in the manufacturing industry are permanently laid off

structural unemployment increases

an increase In the population and hence the supply of labor causes a

surplus of labor at the original real wage rate and the real wage rate will fall

Assume the inflation rate falls from 4 percent to 2 percent. This means that

the price level is increasing more slowly

new growth theory proposes that real GDP per person grows because of ___ and that growth ___

the pursuit of profit; persist indefinitely

the supply of labor curve is

upward sloping


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