Test 2 study plan and everything
Choose the statement that is incorrect.
C. The CPI calculation assumes that everyone shops at discount stores and no one shops at convenience
Choose the statement that is incorrect.
C. The United States and Great Britain were the only countries who suffered the Great Depression
China's real GDP per person was 13,165 yuan in 2013 and 14,088 yuan in 2014. India's real GDP per person was 49,516 rupees in 2013 and 51,521 rupees in 2014. By maintaining their current growth rates, _______.
China will double its standard of living first
Choose the statement that is incorrect.
In the United States in 2009, 22 million fewer people had jobs than in 1989.
Choose the statement that is incorrect.
The unemployment rate was lower during the recession in 1982 than it was during the recession of 1990-1991.
Choose the statement that is incorrect.
The employment-to-population ratio fluctuates less than the labor force participation rate.
When the economy goes into recession, the output gap is _______.
negative
The labor force is the number of people employed plus the _____.
# unemployed
Over the past 100 years, growth was most rapid during the ______ and slowest during the ______.
1960s; Great Depression
Over the past 100 years, the average growth rate of U.S. real GDP per person is _ percent.
2
Suppose that in 2014 China's real GDP is growing at 7 percent a year and its population is growing at 0.5 percent a year. If these growth rates continue, then China's real GDP per person in ______ will be twice what it is in 2014.
2025
Hyperinflation is an inflation rate of _____ or higher that grinds the economy to a halt and causes a society to collapse.
50 percent a month
The Population Survey in Blogsville for the past month is given in the table: In Blogsville last month, ______ million people were in the labor force and ______ million people were in the working-age population.
75; 97
In 2013 and in 2014, consumers in Dexter consumed only books and pens. The prices and quantities for 2013 and 2014 are listed in the table. The reference base period for Dexter's CPI is 2013, and 2013 is also the year of the Consumer Expenditure Survey. The inflation rate in 2014 is ______ percent.
76
The real wage rate is $_____ when the money wage rate is $2,000 and the price level is $25.
80
In 2013 and in 2014, consumers in Dexter consumed only books and pens. The prices and quantities for 2013 and 2014 are listed in the table. The reference base period for Dexter's CPI is 2013 and 2013 is also the year of the Consumer Expenditure Survey. The CPI in 2014 is ______.
98.5
Choose the statement that is incorrect.
An unexpected inflation or deflation has no effect on the economy.
The Bureau of Labor Statistics reports six alternative measures of the unemployment rate. Choose the correct statements. a. Upper U dash 5 measures the job losers. b. Upper U dash 3 adds discouraged workers to the official unemployment rate. c. Upper U dash 1 measures those who are unemployed for 15 weeks or more. d. Upper U dash 3 is the official unemployment rate.
B and C
Choose the statement that is incorrect.
B. All unemployment at the natural unemployment rate is structural unemployment.
The natural unemployment rate ______.
B. fluctuates because the frictions and the amount of structural change fluctuate
Choose the statement that is incorrect.
D. The bias in the CPI eliminates the need for people to shop in discount stores
An economy is at full employment when ______.
D. the unemployment rate equals the natural unemployment rate
Who in the following statements is a discouraged worker?
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.
Which of the following statements illustrates structural unemployment?
Outsourcing resulted in many job losses in the mid 2000s.
Use the data reported by the Current Population Survey in July 2014 to answer the following question. 1. Who does the BLS classify as being unemployed, a part-time worker, an employed person, a discouraged worker, and not in the labor force? Explain your classification. ______ are unemployed, ______ is a part-time worker, _____ is a discouraged worker, and _____ is not in the labor force. How will the labor force change if the following events occur? 1. Sarah starts a second job 2. Pat finds a good job and is hired. 3. Mary takes a job at McDonald's while she waits to start her new job. How will the unemployment rate change if Sarah quits and starts to search for a full-time job? The unemployment rate will _____ if Sarah quits and starts to search for a full-time job. How will the labor force participation rate change if Kevin starts creating football apps in his garage and they turn out to be very popular? The labor force participation will _____ Kevin starts creating football apps in his garage and they turn out to be very popular.
Pat and Mary; Sarah; Kevin; Johnie Events 1, 2, and 3 will not change the labor force. rise rise
Choose the statement that is incorrect.
Real GDP per person grows whenever real GDP grows.
Which of the following statements illustrates frictional unemployment?
Robin is quitting his current job to find another that has better prospects.
Choose the correct statements. 1. The unemployment that arises from normal labor turnover is frictional unemployment. nothing 2. Students who leave school and look for a job are frictionally unemployed. nothing 3. Structural unemployment increases during a recession and decreases during an expansion. nothing 4. Frictional unemployment increases during a recession and decreases during an expansion. nothing
Statements 1 and 2 are correct.
Choose the statement about the Consumer Price Index that is incorrect. CPI = ______.
The CPI is defined to equal 1.00 for a period called the reference base period. (Cost of CPI basket at current-period prices divided by Cost of CPI basket at base-period prices) times 100
Choose the correct statement.
The inflation rate is the annual percentage change in the price level.
Choose the statement that is incorrect.
The unemployment rate includes all underutilized labor.
Choose the statement that is incorrect.
The unemployment rate is zero when the economy is at a business cycle peak.
The inflation rate in 2014 ______.
might be higher, lower, or the same as in 2013
A person is in the labor force if any one of the following statements is true except that he or she is ______.
aged 16 and over and not in jail, hospital, or some other form of institutional care
In the United States, the CPI basket consists of items that ______ . ______ has the greatest weight in the CPI basket.
an average urban household buys; Housing
The growth rate is the _____ of a variable - the change in the level expressed as a percentage of the initial level.
annual percentage change
The natural unemployment rate is the unemployment rate when the economy is _____.
at full employment
The price level is the _____.
average level of prices
The reference base period for the CPI is 1982-1984. In April 2014, the CPI was 237.1. This number tells us that the ______ of the prices paid by urban consumers for a fixed basket of consumer goods and services was ______ .
average; 137.1 percent higher in April 2014 than the average of 1982-1984
Cyclical unemployment is the fluctuating unemployment over the business cycle that increases during _____ and decreases during _____.
a recession; an expansion
The four price indexes that are alternatives to the CPI are ______. The chained CPI ______.
chained CPI, personal consumption expenditure deflator, GDP deflator, and core PCE Your answer is correct.C. overcomes the sources of bias in the CPI by incorporating substitutions and using current and previous period quantities
an electrician who is laid off because of the economy is in a recession experiences ______.
cyclical unemployment
In February 2017, the U.S. unemployment rate LOADING... was 4.7 percent. In February 2018, the unemployment rate was 4.1 percent. Assuming that the labor force remained constant between February 2017 and February 2018, then unemployment _______.
dec
In March 2007, the U.S. unemployment rate was 4.4 percent. In August 2008, the unemployment rate was 6.1 percent. Assuming that unemployment remained constant between March 2007 and August 2008, then the labor force ______._.
dec
Real GDP per person is real GDP _____.
divided by the population
The Rule of 70 is the number of years it takes for the level of any variable to double. It is approximately 70 _____ by the annual percentage _____.
divided; growth rate of the variable
The unemployment that arises from normal labor turnover long dash from people entering and leaving the labor force long dash and from the ongoing creation and destruction of jobs is ______ unemployment.
frictional
Read the news clip, then answer the following questions. The unemployment rate in May 2008 is ______ the estimated natural unemployment rate. This implies that real GDP is ______ potential GDP at this time.
greater than; less than
A discouraged worker ______. An increase in discouraged workers ______ the official unemployment rate and ______ U-4.
has stopped looking for a job because of repeated failure to find one decreases; does not change
The aggregate production function is the relationship that tells us ______, when all other influences on production remain the same.
how real GDP changes as the quantity of labor changes
In February 2017, the U.S. unemployment rate LOADING... was 4.7 percent. In February 2018, the unemployment rate was 4.1 percent. Assuming that unemployment was constant between February 2017 and February 2018, then the labor force _______.
inc
In March 2007, the U.S. unemployment rate was 4.4 percent. In August 2008, the unemployment rate was 6.1 percent. Assuming that the labor force remained constant between March 2007 and August 2008, then the number unemployed _______.
increased
When the unemployment rate ______ the natural unemployment rate, real GDP ______ potential GDP.
is greater than; is less than
The natural unemployment rate _______.
is the unemployment rate at full employment
The unemployment rate is the percentage of the people in the _____ who are unemployed.
labor force
Read the news clip, then answer the following question. The unemployment rate in May, 2008 is ______.
lower than the unemployment rates that occurred in recessions since 1980 This is the correct answer.D.
Inflation ______ the real wage rate, everything else remaining the same. People are more likely to accept a real wage cut that arises from an increase in the price level than a cut in their nominal wage rate because ______.
lowers inflation decreases the real wage rate gradually and a cut in the nominal wage decreases the real wage rate suddenly
The unemployment rate is supposed to ______. It is an imperfect measure because ______.
measure underutilized labor; it does not include marginally attached workers and part-time workers who want full-time jobs
The main sources of bias in the CPI are ______. The bias in the CPI is a problem because ______ .
new goods bias, quality change bias, commodity substitution bias, and outlet substitution bias it distorts wage agreements linked to the CPI
The table shows three years of CPI data. The bias in these CPI numbers might arise from ______. Choose the statement that is incorrect.
new goods bias, quality change bias, commodity substitution bias, and outlet substitution bias The core PCE is a broader measure than the CPI that attempts to overcome biases by placing extra emphasis on food and fuel, two goods which are large components of household expenditure.
Read the news clip, then answer the following questions. If the only change that occurred was that all the newly hired people had been unemployed in October, then the labor force would ______ and unemployment would _______. If the only change that occurred was that people gave up job searching, then the labor force would _______ and unemployment would _______.
not have changed; have decreased have decreased; have decreased
Which of the people described in the table is unemployed because of labor market mismatching?
only Tory and David
If the CPI rises from 120 to 126, then ______.
on average, the price paid by urban consumers for a fixed basket of consumer goods and services rises by 5 percent
China was the largest economy for centuries because everyone had the same type of economylong dashsubsistencelong dashand so the country with the most people would be economically biggest. Then the Industrial Revolution sent the West on a more prosperous path. Now the world is returning to a common economy, this time technology-and information-based, so once again population triumphs. China was the world's largest economy until 1890 because ______. In 1890, the United States surpassed China to become the world's largest economy because ______.
people in all countries had approximately the same subsistence level of income the benefits of the Industrial Revolution were greater in the United States than in China
Unemployment arises for all of the following reasons except ______. Some unemployment is unavoidable because ______.
people leave the labor force people are making transitions through the stages of life and businesses are making transitions
The output gap is real GDP minus _____ expressed as a percentage of _____.
potential GDP; potential GDP
The inflation rate is the percentage change in the _____ from one year to the next. Deflation is a situation in which the _____ is _____ and the inflation rate is _____.
price level; price level; falling; negative
The output gap is the gap between _______.
real GDP and potential GDP
The aggregate production function is a relationship that tells us how _____ changes as the quantity of _____ changes when all other influences on production remain the same.
real GDP; labor
Over the last several decades, the gap between real GDP per person in the United States and Canada ______. The gap between real GDP per person in the United States and Africa ______.
remained nearly constant or widened a small amount; widened
USe the data reported by the Current Population Survey in July 2014 to answer the following question. 3. How will the unemployment rate change if Sarah quits and starts to search for a full-time job? The unemployment rate will _____ if Sarah quits and starts to search for a full-time job. How will the labor force participation rate change if Kevin starts creating football apps in his garage and they turn out to be very popular? The labor force participation will _____ Kevin starts creating football apps in his garage and they turn out to be very popular.
rise rise
Read the news clip, then answer the following question. Growth rates over the past few decades indicate that gaps in real GDP per person around the world are ______.
shrinking between some countries and growing or staying the same between other countries
The core inflation rate is the annual percentage change in the _____ price index _____ the prices of food and energy.
PCE; excluding
The region with the highest inflation rate in 2010 is ______. The region with the highest inflation rate in 2011 is ______. Describe the path of the price level in Japan. The price level ______.
the United States; the United States decreased in both years
Dress for Less Since 1998, the price of the Louis Vuitton "Speedy" handbag has more than doubled, to $685, while the price of Joe Boxer's "licky face" underwear has dropped by nearly half, to $8.99. As luxury fashion has become more expensive, mainstream apparel has become markedly less so. Clothing is one of the few categories in the CPI in which overall prices have declinedlong dashabout 10 percentlong dashsince 1998. Apparel comprises ______ percent of the CPI basket. Although luxury clothing prices have increased dramatically since the late 1990s, the clothing category of the CPI has actually declined by about 10 percent because ______.
the apparel component of the CPI is weighted more heavily toward moderately-priced clothing, and the price of moderately-priced clothing has decreased
The price level is ______.
the average level of prices, and the value of money
Choose the statement that is incorrect.
the congressional advisory commison on the cpi in 1996 said that the cpi overstates inflation
Economic growth is _______. Growth rates are calculated in a similar manner for all variables. Real GDP growth rate = [(Real GDP in ______ yearminusReal GDP in ______ year) divided by Real GDP in ______ year ] times 100.
the expansion of production possibilities current; previous; previous
When cyclical unemployment increases and other things remain the same, ______.
the natural unemployment rate does not change
Read the news clip, then answer the following question. The unemployment rate tends to actually underestimate the unemployment problem, especially during a recession, because ______.
the number of marginally attached workers increases, but these workers are not included in the official unemployment rate
The CPI tells us ______.
the price level in a given period expressed as a percentage of the price level in the base period, which is by definition equal to 100
Read the news clip, then answer the following question. Choose the statement that is incorrect. If the labor market is working properly, there is still unemployment because ______.
there are always discouraged searchers
The CPI basket consists of items that __ households buy. The CPI places more weight on _______ than on _______.
transportation; medical care
If we count marginally attached workers as unemployed ______.
unemployment rate rises
An unemployed person ______.
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
The labor force participation rate is the percentage of the _____ who are members of the labor force.
working age pop
If real GDP is $1,000,000, exports are $200,000, imports are $300,000, and aggregate labor hours are 100,000, labor productivity is _____.
$10 per hour
The personal consumption expenditure deflator is calculated as _______.
(Nominal C divided by Real C) times 100
Once a month, the Bureau of ______ Statistics calculates the Consumer Price Index, which is a measure of the ______ consumers for a fixed basket of consumer goods and services.
Labor; average of the prices paid by urban
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.
available; willing; not made; four
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.
average; urban
Full employment is when there is no _____ unemployment or, equivalently, when all the unemployment is _____ or _____.
cyclical; frictional; structural
The Rule of 70 states that the number of years it takes for the level of any variable to ______ is approximately ______. If real GDP per person doubles in 20 years, then the annual growth rate of real GDP per person is ______ percent a year.
double; 70 divided by the annual percentage growth rate of the variable 3.5
The components of the CPI basket that are experiencing price increases faster than the 12-month average include ______. And those components that are experiencing price increases below the 12-month average include ______. The core CPI is the CPI excluding ______ prices. Core CPI is a useful measure because ______. Core CPI is a misleading measure because ______.
energy, transportation and food; clothing food and fuel it smooths out short-term fluctuations that arise from the volatility in food and fuel prices; it does not include food and fuel prices price rises
Between 1960 and 2010, growth rates in real GDP per person in Hong Kong, Korea, Singapore, and China ______ the growth rate of real GDP in the United States. China's real GDP per person in 2010 is approximately equal to real GDP per person in Hong Kong in ______.
exceeded; 1976
When the unemployment rate is less than the natural unemployment rate, real GDP is ______ than potential GDP and the output gap is ______.
greater; positive
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.
people; 16
Read the news clip, then answer the following question. The 5 million workers who cannot find jobs because of mismatching in the labor market are counted as part of the economy's ______ unemployment because ______.
structural; there is a mismatch between their skills and the skills required for the available jobs