Eco 2023 chap 9
An efficiency wage
is higher than the market wage and tends to increase productivity
The nominal interest rate equals the real interest rate ________ the inflation rate.
plus
The average price of goods and services in the economy is also known as
price level
Which of the following policies would reduce structural unemployment?
a job retraining program
Which of the following would increase the unemployment rate?
an increase in unemployment insurance payments
Cyclical unemployment is the result of
a slowdown in the economy
The labor force equals the number of people
employed plus unemployed
The labor force participation rate for this simple economy equals
(1,100/15,000) × 100.
The unemployment rate for this simple economy equals
(100/1,100) × 100
If the price level rose in three consecutive years from 100 to 120 to 140, then the annual inflation rate over those years would
decrease
A student who just graduated from college but has
frictionally unemployed.
The U.S. unemployment insurance program
increases the amount of time the unemployed spend searching for a job.
The stated interest rate on a loan is the
nominal interest rate
If the minimum wage is set above the market wage
unemployment will rise
Assume the market basket for the consumer price index has two products—bread and milk—with the following values in 2013 and 2018 for price and quantity: The Consumer Price Index for 2018 equals
116
Consider the following values of the consumer price index for 1996, 1997, and 1998: The inflation rate for 1997 was equal to
2.5 percent.
If the nominal rate of interest is 6.5% and the inflation rate is 3.0%, what is the real rate of interest?
3.5%
Structural unemployment is the result of
a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs.
Which of the following describes a situation in which the person is hurt by inflation?
a person paid a fixed income during an inflationary period
When actual inflation is less than expected inflation
borrowers lose and lenders gain
Which of the following would be the best measure of the cost of living?
consumer price index
The real wage equals the nominal wage ________ the CPI, all times 100.
divided by
The Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill.
employed
The natural rate of unemployment is the amount of unemployment
equal to frictional plus structural unemployment
The percent increase in the CPI from one year to the next is a measure of the
inflation rate
Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as
not in the labor force
The unemployment rate is an important economic statistic that can tell us about the health of the economy. If the unemployment rate turns out to be high or higher than anticipated, we would expect
that stock prices are more likely to fall.
The real rate of interest is
the nominal interest rate minus the inflation rate.
Frictional unemployment is the result of
the process of matching workers with jobs
When deflation occurs
the real interest rate is greater than the nominal interest rate
