Chapter 6 ECON

If the price of gasoline has increased from $3 per gallon to $4 per gallon at the same time that the overall price index increased from 200 to 266.66, what do you know about the inflation-adjusted price of gasoline?

It has increased. It has decreased. It has remained constant. Correct There is not enough information to make a statement.

Suppose there are only two goods (Good A and Good B) and the average person buys eight of Good A in a year and six of Good B. If the price of Good A is $8 and the price of Good B is $6, the price of the market basket is

$100. Correct $64. $36. $50.

Suppose this is the base year and there are only two goods (Good A and Good B) and the average person buys eight of Good A in a year and six of Good B. If the price of Good A is $8 and the price of Good B is $6, the price index is

100. Correct 64. 36. 50.

With 125 million people working, 8 million out of work and looking for work, and 147 million neither working nor looking for work, underemployment would be illustrated by

125 million losing their jobs. 8 million ending their search for work. part of the 125 million holding low-skill jobs when they were qualified for only low-skill jobs. part of the 125 million holding low-skill jobs when they were qualified for high-skill jobs. Correct

The expenditures approach to GDP equals

Consumption + Gross Investment + Government Purchases + Net Exports.

In measuring gross domestic product (GDP), goods produced by foreign firms in the United States are

counted, but goods produced by American firms in foreign countries are not counted. Correct not counted, and goods produced by American firms in foreign countries are also not counted. not counted, but goods produced by American firms in foreign countries are counted. counted, and so are goods produced by American firms in foreign countries.

One problem with using real gross domestic product (RGDP) as a measure of social welfare is that

it fails to count services, a growing part of the economy. it fails to count home production. Correct it double, triple, and sometimes quadruple counts goods that are produced in stages. it fails to account for imports, a growing part of the economy.

Seasonal adjustment is used in economic data to _________blank the changes in those variables that are the result of regular patterns associated with the calendar.

prepare for accentuate eliminate Correct overcome

If real GDP contracted by more than 10 percent, economists would label that a(n)

recession. expansion. recovery. depression. Correct

Unemployment rates typically increase dramatically from December to January because the holiday sales season ends. For this reason, it is best to

seasonally adjust the data. Correct politically adjust the data. focus on January increases. focus on November/December decreases.

In 2021, the sole remaining facility stamping Blu-ray discs in the United States was closed. Those laid off as a result would likely be classified as

structurally unemployed. Correct frictionally unemployed. cyclically unemployed. seasonally unemployed.

Which measure of productivity describes the increase in production that occurs after accounting for the changes in all inputs?

tangential productivity multifactor productivity Correct labor force productivity marginal productivity

On a graph of real gross domestic product (RGDP) over time, recessions appear as

the dips on a path that increases and decreases equally. relatively short and shallow drops on an otherwise increasing path. Correct the periods where the rate of growth, while still positive, slows. long, sharp declines on an otherwise increasing path.

The consumer price index (CPI) is a heavily criticized measure of inflation because

the government does nothing to fix its known deficiencies. the government constantly makes adjustments to it without a good reason. it consistently understates the increase in the cost of living. it consistently overstates the increase in the cost of living. Correct

Inflation is measured using _________blank in a price index.

the percentage year-to-year increase Correct the absolute increase a multiyear weighted average increase logarithm-adjusted absolute increase

Which population group is largely responsible for the increase in the labor force participation rate during the period from 1950 to 2000?

women

The core rate of inflation

adds food and energy to the price index. removes food and energy from the price index. Correct only includes the price of food and energy in the price index. is a price index associated with the important things people buy.

Which of the events can make the unemployment rate fall?

an increase in the number of people who are looking for work a decrease in the number of people who are looking for work an increase in the number of people with jobs a decrease in the number of people who are looking for work and an increase in the number of people with jobs Correct

The major difference between nominal GDP and real GDP is

nominal GDP measures the value of output with constant output levels, while real GDP measures output using current-year output levels. nominal GDP measures the value of output with current-year output levels, while real GDP measures output using constant output levels. nominal GDP measures the value of output in current-year prices, while real GDP measures output using constant prices. Correct nominal GDP measures the value of output in constant prices, while real GDP measures output using current-year prices.

Suppose a Boeing 777 is sold to a Chinese company for $250 million, who then resells it to a Hong Kong airline for $251 million. GDP will count this as

nothing. $250 million. Correct $251 million. $451 million.