Econ HW 9

If the number employed is 190 million, the working-age population is 230 million, and the number unemployed is 10 million, then the unemployment rate is

5%

Between 2017 and 2018, the CPI of a small nation rose from 182 to 185. If household incomes rose by 3% during that period of time, which of the following is true?

The purchasing power of household income rose between 2017 and 2018.

A student who just graduated from college but has not found a job would most likely be

frictionally unemployed.

A sharp increase in the divorce rate increases the number of lawyers hired to determine divorce settlements. This will

increase GDP and decrease well-being in the economy.

Suppose that homemakers are included as employed in the labor force statistics, rather than being counted as out of the labor force. This would

increase the measured labor force participation rate.

Year Oranges price of Shirts Price of Produced Oranges Produced Shirts 2013. 1,800. $0.90. 110. $30.00 2015. 2,000. 1.00. 110. $35.00 Consider the data shown above for Vicuna, a country that produces only two products: oranges and shirts. Refer to Table 19-13. Real GDP for Vicuna for 2013 using 2015 as the base year equals

$5,650.

Year Oranges price of Shirts Price of Produced Oranges Produced Shirts 2013. 1,800. $0.90. 110. $30.00 2015. 2,000. 1.00. 110. $35.00 Refer to above. Consider the data above (in billions of dollars) for an economy. Gross domestic product (in billions of dollars) for this economy equals during 2015 was

$5850.

Product Quantity Price Shoes. 40. $60.00 DVDs. 100. 18.00 Tomatoes. 2,000. 1.00 Ketchup. 300. 4.00 Suppose that a simple economy produces only four goods and services: shoes, DVDs, tomatoes, and ketchup. Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households. Using the information in the above table, nominal GDP for this simple economy equals

$6,400.

If the nominal interest rate is 6% and the inflation rate is 9%, then the real interest rate is

-3%

2015 2016 Nominal GDP $10,000. $12,000 Real GDP. 9,500. 10,500 Refer to Table 19-19. Given the information above, calculate the GDP deflator in 2016.

114

Refer to Table 20-2. 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

115

If the GDP deflator rises from 185 to 190, what is the rate of inflation between the two years?

2.7%

Year CPI 2017 207 2018 215 Refer to Table 20-5. Consider the following values of the consumer price index for 2017 and 2018. The inflation rate for 2018 was equal to

3.9 percent

If inflation increases unexpectedly, then

lenders receive a lower real interest rate than they expected

Suppose the labor force stays constant, and the working-age population stays constant, but a greater number of persons who were unemployed become employed. The labor force participation rate will

remain constant

By offering training to workers whose firms laid them off because of competition from foreign firms, the federal government is attempting to reduce

structural unemployment.