macro CH7

Which of the following is the definition of the GDP Deflator​?

A broad price index measuring the changes in prices of all new goods and services produced

Which of the following is most likely to gain from unanticipated​ inflation?

A consumer with a five year auto loan.f

Which of the following is the definition of the PCE Index​?

A statistica measure of average prices using annually updated weights based on surveys of consu,er spending

Which of the following is the definition of the Consumer Price Index left parenthesis CPI right parenthesis​?

A weighted average of prices of a market basket of goods and services that firms produce and sell

Sean is lobster man, but lobster fishing is done only only in the summer months, so he doesn't have a job in the winter. Which type of unemployment is​ this?

seasonal unemployment

James worked for an automobile plant that has now closed comma as the parts produced are no longer needed. Which type of unemployment is​ this

structural unemployment

Double click on the graph to the right. Select Multiple Time Series Data. For Y Axis1 select the labor force participation rate of​ men, and for Y Axis2 select the labor force participation rate of women. After selecting these series the data will be plotted in the graph. According to data shown on the graph on the​ right, it is clear that the labor force participation rates for men and women in the US

tended to converge over almost the entire period.

The unemployment rate is calculated as

the number of unemployed/the number of people in the labor force x100

Full employment means

there is a level of unemployment consistent with​ "normal" frictions in the labor market.

The economy of Finlandia is at full employment when

there is some unemployment due to friction in the labor​ market, but there is no cyclical unemployment.

The nominal value of anything is its price expressed in​ ________, and the real value of anything is its value expressed in​ ________

today's dollars; purchasing power

The labor force is equal to the number of employed plus the number of unemployed.

true

Unemployment due to the fact that workers must search for appropriate job offers is called frictional unemployment.

true

If last year a pineapple cost​ $2, and this year it costs​ $4, there has been a​ ________ percent rise in the price of the pineapple over a​ one-year period.

100

Jim's favorite breakfast is two​ eggs, 1/5 lb. of​ bacon, 1/7 lb. of white​ toast, 1/6 can​ (16 ounce​ can) of frozen concentrate orange​ juice, and 1 lb. of grapefruit. The following table contains 1991 and 2001 prices for these five items. Using 1991 as the base​ year, compute the price index for​ Jim's breakfast for 2001

107.5

Jim's favorite breakfast is two​ eggs, 1/5 lb. of​ bacon, 1/7 lb. of white​ toast, 1/6 can​ (16 ounce​ can) of frozen concentrate orange​ juice, and 1 lb. of grapefruit. The following table contains 1991 and 2001 prices for these five items. Using 1991 as the base​ year, compute the price index for​ Jim's breakfast for 2001. Item 1991 Price 2001 Price One dozen eggs $1.08 $1.02 ​One pound bacon $2.15 $2.75 ​One pound bread $0.63 $0.98 ​ ​ One can orange juice $1.98 $1.86 ​ ​One pound grapefruit $0.57 $0.55 ​ ​

107.5

Structural unemployment is related to the movement of workers from​ low-paying to​ high-paying jobs

False

The values of NGDP for the years 1981 and 1982 are​ $3.1284 and​ $3.255 trillion, respectively. The values for RGDP for 1981 and 1982 are​ $5.2917 and​ $5.1893 trillion, respectively. According to the graph of NGDP and RGDP and the values of the two time series variables for 1981 and​ 1982, it is correct to state that

NGDP has always been​ increasing, but RGDP has been both increasing and decreasing. Between 1981 and​ 1982, NGDP increased by​ $.1266 trillion, corresponding to a rate of growth of​ 4.05%. RGDP decreased by​ $.1024 trillion, corresponding to a negative rate of growth of​ 1.94%.

Click on the graph in the window on the right and select Multiple Plots to compare the volatility of four major U.S. price indices over the years​ 1948-2005. For each Y​ listbox, select a different​ option: the Consumer Price Index​ (CPI), the Producer Price Index​ (PPI), the Personal Consumption Expenditure Index​ (PCE) and the GDP deflator. Roll your cursor over each plotted line to identify the data. Which of these price indices shows the greatest price​ volatility?

PPI

The table on the right shows four major price indices of the US​ economy: the Consumer Price Index​ (CPI), the Producer Price Index​ (PPI), the Personal Consumption Expenditure Index​ (PCE) and the GDP deflator. All four indices are used to measure inflation. Based on the data from the four indices in the​ table, which price index suggests the highest rate of inflation between the years 1997 and 1998​?

The CPI indicating the highest inflation rate ​(1.54​%)

Which of the following statements is true concerning the historical picture of business activity in the United​ States?

The frequency and size of fluctuations around the trend has decreased since World War II.

The following table contains information for the U.S. for 2001. |U.S.​ Economy: 2001 | Thousands of Persons Civilian labor force 143 comma 772 Civilian employment 136 comma 940 Civilian​ working-age population 215 comma 227 Compute the unemployment rate and the labor force participation rate.

Unemployment rate​ = 4.75 percent​; Labor force participation rate​ = 66.8 percent.

Internet job​ sites, like​ Monster.com, have led potential employees to find jobs via the internet almost instantly. This has caused

a fall in frictional unemployment.

The type of unemployment that rises as the economy goes into a recession is called

cyclical

Marisa has just graduated from college and is seeking a job, but hasn't found one yet. Which type of unemployment is​ this? A. structural unemployment B. frictional unemployment C. cyclical unemployment D. seasonal unemployment

frictional unemployment

By providing information and reducing the costs of job​ search, the​ Internet's impact on the job market is to reduce

frictional unemployment.

Consider an economy with only two groups of​ people: Wage earners and Goods sellers. If the price level increases by​ 20% while the nominal wages remains the​ same,

income will be redistributed from wage earners to goods sellers

Typically during a recession

incomes fall and unemployment rises.