Chapter 9 hw

Suppose the​ economy's consumer price index​ (CPI) in 2008 was 185185 and the CPI in 2009 was 195195.The inflation rate over the period from​ 2008-2009 was equal to

5.4 %

Suppose an economy is given​ by: Population​ = 225225 million ​Working-age population​ = 128128 million Labor force​ = 9999 million The number of people employed​ = 9393 million The number of people unemployed​ = 66 million The labor force participation rate for this economy is

77.34 %

As of April​ 2017, which of the following demographic groups has the highest unemployment​ rate?

African Americans

Which of the following causes changes in the CPI to overstate the true inflation​ rate? New product bias B. Substitution bias C. Increase in quality bias D. All of the above

All of the above

When a company reduces production and employment during economic​ recessions, those employees who lose their jobs are generally considered to be

Cyclically unemployed

A person who is in between jobs but actively engaged in a job search is considered to be

Frictionally unemployed

The BLS uses the establishment survey to collect information on employment in the economy. Indicate one drawback of the establishment survey compared to the current population survey and indicate one advantage. It does not include information about​ self-employed people. It is based on company payroll and not on unverifiable answers. It is based on​ unverifiable, self-reported survey responses. It includes complete information about unemployment.

It does not include information about​ self-employed people. It is based on company payroll and not on unverifiable answers.

__________is the percentage of the​ working-age population in the labor force.

Labor force participation rate

Which one of the following accurately describes the relationship between frictional unemployment and job​ search? People are said to be frictionally unemployed when they are laid off because of a recession. People are said to be frictionally unemployed when their skills do not match job requirements. People are said to be frictionally unemployed when they are between jobs and searching for new jobs. People are said to be frictionally unemployed when they are between jobs due to the seasonal variations

People are said to be frictionally unemployed when they are between jobs and searching for new jobs.

What is the difference between the consumer price index and the producer price​ index?

The consumer price index is an average of the prices of the goods and services purchased by the typical urban family of​ four, whereas the producer price index is an average of the prices received by producers of goods and services at all stages of the production process.

Which one of the following depicts an accurate description of the household survey and the establishment​ survey? The household survey interviews households and collects data that is used to measure the unemployment rate whereas the establishment survey interviews businesses and measures total employment in the economy. . The household survey interviews retired individuals and measures the unemployment rate whereas the establishment survey interviews working population and measures the employment rate. C. The household survey conducts surveys of small companies and measures the employment and the unemployment rate whereas the establishment survey interviews big establishments and measures the unemployment rate. D. The household survey interviews households and measures the employment rate whereas the establishment survey interviews​ self-employed people and measures the unemployment rate.

The household survey interviews households and collects data that is used to measure the unemployment rate whereas the establishment survey interviews businesses and measures total employment in the economy.

This decline in employment is

a combination of​ frictional, structural, and cyclical unemployment.

When a firm pays a wage that is higher than the market wage in order to increase worker​ productivity, the wage is called

an efficiency wage

What index is used to measure the average prices paid by a typical​ family? An average of the prices of the goods and services purchased by a typical family is​ the:

consumer price index​ (CPI)

If more companies make information on job openings easily available on Internet job sitesmore companies make information on job openings easily available on Internet job sites​, then the unemployment rate will

decrease

Since nominal incomes increase with​ inflation,

expected inflation does not affect the purchasing power of the average consumer.

The three types of unemployment are

frictional, structural, and cyclical unemploment.

Unemployment rates are

lower for college graduates than for people without a high school​ degree, and vary greatly among ethnic groups.

The type of unemployment most likely to result in hardship for the people who are unemployed is

structural because this type of unemployment requires retraining to acquire new job skills.

Experts in​ hand-drawn animation who remain unemployed due to the film​ industry's switch to​ computer-generated animation are considered to be

structurally unemployed

Many economists prefer

the establishment survey because it is determined by actual payroll records rather than unverified answers.

When the economy is at full​ employment, unemployment is equal to

the natural rate of unemployment.

The difference between the nominal interest rate and the real interest rate is

the nominal interest rate is the stated interest rate whereas the real interest rate is the nominal interest rate minus the inflation rate.

If inflation is expected to​ increase,

the nominal interest rate will increase.

The labor force participation rate is calculated by

the percentage of the​ working-age population that is in the labor force or Labor force/working age population x 100

The natural rate of unemployment is

the sum of structural unemployment and frictional unemployment.

The reasons behind this decline in employment could be all of the following except

this is the normal underlying level of unemployment in the economy.

In April​ 2017, the​ working-age population of the United States was 254.6 million. The​ working-age population is divided into those in the labor force​ (160.2 million) and those not in the labor force​ (94.4 million). The labor force is divided into the employed​ (153.2 million) and the unemployed​ (7.1 million). Those not in the labor force are divided into those not available for work​ (88.7 million) and those available for work​ (5.7 million).​ Finally, those available for work but not in the labor force are divided into discouraged workers​ (0.5 million) and those currently not working for other reasons​ (5.2 million). Use this data to help determine which one of the following statements is​ true:

unemployment rate and labor force participation rate

Nominal incomes generally increase with inflation because

when inflation is​ anticipated, average nominal incomes also increase by the same percentage as the rate of inflation.

What is the relationship between the unemployment rate and enacting or increasing a minimum​ wage? When a minimum wage is enacted or increased across a​ country, the unemployment rate

will increase some but the impacts will be much larger for some groups of workers.