Econ

The "normal" underlying level of unemployment in the economy is

(All of the above) : The sum of structural unemployment and frictional unemployment... The natural rate of unemployment... And the full employment rate of unemployment!

The inflation rate is 6% in the nominal interest rate is 4% and the real estate interest-rate is

-2%, which is a nominal interest rate minus the inflammation right

Suppose the interest rate on your car loan is 15% and the inflation rate is 14% calculate the real estate rate

1.00%

The CPI was 207 and 2009 and 225 and 2013, what wage would someone who earned A $50,000 income in 2008 have to earn in 2013 in order to keep her purchasing power constant

54,348

Suppose the economy is consumer price index in 2008 was 185 in the cpi in 2009 what is 197. The inflation rate over the period of 2008 2009 was equal to __%

6.49% (question 33)

Boeing company employed fewer people in 2017 than it did in 1980. The decline in employment is (pt 1)

A combination of frictional structural and cyclical unemployment

Suppose the fixed interest rate on a loan is 5.75% and the rate of inflation is expected to be 4.25%. The real interest rate is 1.5%. Suppose now that instead of 4.25%, the inflation rate unexpectedly reaches 5.5%. Who gains and who loses from the unanticipated inflation?

Borrowers gain from a lower real estate right and lenders loose from the lower real estate right

What index is used to measure the average price is paid by typical family? An average of the prices of the goods and services purchased by typical family is the:

Consumer price index CPI

Which of the following is not considered one of the potential biases and calculating the consumer price index

Coverage bias

Briefly explain whether you agree or disagree with the following statement: "Tatian I don't believe the government price statistics. The CPI for 2016 was 220, but I know that the inflation rate couldn't have been as high as 120% in 2016."

Disagree. The inflation rate is a percentage increase in the price level from the previous year, not the base year.

(Pt 2) An increase in the number of job quits would suggest that it is becoming

Easier to find jobs because employees who leave voluntarily are confident of finding another one

What is Costco's CEO referring to

Efficiency wages

If income rises more slowly than the rate of inflation, purchasing power will rise.

False

10 years from now #45

Frank will have a higher real income although he has a lower normal income because his interest income is likely to increase with inflation

The BLS to find a job quite as a "voluntary separation initiated by an employee." The BLS estimated that there were 3.1 million job quits in March 2017. Unemployment caused by an increase in job quits would be classified as (pt 1)

Frictional unemployment

Inflation and deflation rates

Graph number 31

How does the US economy create and destroy millions of jobs each year:

In the market system new firms are constantly entering and exiting various industries.... some businesses are expanding while others are contracting

Increase in the minimum wage will

Increase unemployment among teenagers

Which of the following is not a cost created by high inflation?

Inflation causes the real wage to fall which means that firms have to pay more for workers

The BLS uses see a Stabley Schmidt survey to collect information on employment in the economy indicate one drawback of the establishment survey compared to the current population survey and indicate one advantage

It does not include information about self-employed people... It is based on company payroll and not on unverifiable answers

Unemployment rates are

Lower for college graduates then for people without a high school degree and very greatly among ethnic groups

The unemployment rate in the United States is usually blank in the unemployment rates in most other high income countries, partly because United States has blank requirements for the unemployed to receive government payments.

Lower; more stringent

Do you agree with the reporters definition of deflation?

No. Deflation is defined as a negative inflation rate.

Real income is defined as the following:

Real income = nominal income / CPI current year x100

The unemployment rate (13)

Shows the percentage of the labor force that is considered unemployed

Which of the following steps has not been taken by the Bureau of Labor Statistics (BLS) to reduce the size of the biases in the cpi?

The BLS has expanded the number of stores from which it collects the price information to reduce the coverage bias.

What is the difference between the consumer price index in the producer price index

The consumer price index is an average of the prices of the goods and services purchased by the typical urban family of four, whereas the producer price index is an average of the prices received by producers of goods and services at all stages of the production process.

Why do economics believe that setting a goal of 0% unemployment is not feasible or desirable? Creating a goal of 0% unemployment for an economy is not feasible nor is desirable because

The economy needs some short term unemployment in order to allow for better matching of jobs with workers that possess the proper skill set

If government unemployment insurance payments did not rise during a recession, LOOK AT QUESTION 23

The economy would suffer as purchasing power of consumers would suffer

The states unemployment rate could've increased at the same time that employment in the state was increasing because

The number of discourage workers and other people not previously counted as unemployed entered the labor force

Computation the CPI assumes that household by the same market basket of products each month. For this reason, which one of the following factors is not relevant in calculating the cpi?

The quantities of the products household purchase in the current year

The reasons behind us a decline in employment could be all the following except (pt 2)

This is the normal underlying level of unemployment in the economy.

If inflation is unexpectedly high, borrowers will benefit and wonders will be harmed.

True

To have no substitution bias, what shape would the demand curve need to be for the products in the market basket? Do you have no substitution bias the demand curves for the products in the market basket would need to be

Vertical

Nominal incomes generally increases with inflation because

When inflation is anticipated, average normal income is also increase by the same percentage as the rate of inflation

What is the relationship between the unemployment rate in an acting or increasing a minimum wage? When a minimum wage is an acted or increased across the country the unemployment rate

Will increase some but the impact will be much larger for some groups of workers

A politician makes the following argument: "The economy would operate more efficiently if frictional unemployment were eliminated. Therefore, a goal of government policy should be to reduce the frictional rate unemployment to the lowest possible level." Eliminating all frictional unemployment

Will not be good for the economy since the presence of frictional unemployment increases economic efficiency

If this proposal were enacted the unemployment rate in France LOOK AT QUESTION 22

Would have gone up as the opportunity cost of job search would have decreased

Suppose that the inflation rate turns out to be much lower than most people expected. In that case,

a borrower will lose from the situation while a lender will gain

Consider the effect of each of the following on the unemployment rate: a.) The minimum wage law b.) The effect of labor unions on overall unemployment is____since only a____ percentage of the labor force outside the government is unionized. c.) an efficiency wage

a.) has only a small effect on the unemployment rate since only a small part of the labor force earns the minimum wage b.) small since only small C.) Increases the unemployment rate since farms pay a higher than market wage that increases the quantity of labor supplied

Question 23 Government unemployment payments can increase the unemployment rate by

allowing the unemployed to be more picky about taking a new job.

Since nominal incomes increase with inflation,

expected inflation does not affect the purchasing power of the average consumer

When the economy is at full employment, which types of unemployment remain?

frictional and structural

Of the eight categories in the CPI Market Basket, which three categories make up more than 75% of the basket?

housing, transportation, and food

Government unemployment insurance tends to

increase the unemployment rate by lowering the opportunity cost of job search.

Real interest rate

nominal interest rate - inflation rate

The difference between a nominal variable and a real variable is that

nominal variables are calculated in​ current-year prices and the real variables are measured in dollars of the base year for the price index to correct the effects of inflation.

The payment of government unemployment insurance reduces the severity of recessions by

preventing a huge drop in income and spending for the unemployed.

The real Interest rate equals

the nominal interest rate minus the inflation rate

The unemployment rate in the United States typically has been lower than the unemployment rates in Canada and countries in Western Europe because

the opportunity cost of job search is lower in Canada and countries of Western Europe and unemployed workers in those countries search longer for jobs.

The labor force participation rate

the percentage of the working-age population in the labor force