ECON 202 - Ch. 9 Inflation

What effect do labor unions LOADING... have on the unemployment​ rate? A. By increasing the wage above market​ equilibrium, labor unions considerably decrease the unemployment rate. B. Since few​ non-government workers are​ unionized, there is no significant effect on the unemployment rate. C. By increasing the wage above market​ equilibrium, labor unions considerably increase the unemployment rate. D. Labor unions can significantly increase the unemployment rate when members go on strike.

B. Since few​ non-government workers are​ unionized, there is no significant effect on the unemployment rate.

Which of the following formulas does the Bureau of Labor Statistics use to calculate the unemployment​ rate? A. (Number of unemployed /Number in labor force ) x 100. B. (Number of unemployed / Number of employed) x 100. C. (Number of unemployed/ (Working - age population)) x 100. D. (Number in labor force / Number of unemployed) x 100.

A. (Number of unemployed /Number in labor force ) x 100.

Indicate whether the following statement is true or false and why. ​"A wage rising slower than the rate of inflation is actually​ falling." A. True. If wages are increasing slower than the average price of goods and​ services, purchasing power falls. B. True. If wages are increasing slower than the average price of goods and​ services, purchasing power increases. C. False. A higher wage increases purchasing power regardless of inflation. D. False. A higher wage decreases purchasing power regardless of inflation.

A. True. If wages are increasing slower than the average price of goods and​ services, purchasing power falls.

The true cost of borrowing and lending is best measured by A. the real interest rate. B. the nominal interest rate. C. the​ three-month U.S. Treasury bill rate. D. the inflation rate.

A. the real interest rate.

Which of the following can give an early warning of future increases in the price​ level? A. Consumer price index B. GDP deflator C. Producer price index D. All of the above

C. Producer price index

As of April​ 2017, which of the following demographic groups has the highest unemployment​ rate? A. Asians B. Hispanics C. Whites D. African Americans

D. African Americans

Unexpected deflation will result in the redistribution of wealth from:

borrowers to lenders

Unexpected inflation will result in the redistribution of wealth from:

lenders to borrowers

Inflation makes ________ wages and contracts difficult

long-term

"Inflation is always and everywhere a ________ phenomenon"

monetary

The CPI _______ inflation

overstates

The CPI is bias because

substitution bias, quality changes, new products

Inflation creates ________ price changes

uncertainty

When the economy is at full​ employment, A. the natural rate of unemployment prevails. B. all remaining unemployment is either frictional or structural. C. the unemployment rate is greater than zero. D. All of the above.

D. All of the above.