macro quiz 5

Refer to Table 19-1. In the year 2005 in this economy, it is probably the case that workers are ________ and factories are ________. TABLE 19-1:The table below provides macroeconomic data for a hypothetical economy. Dollar amounts are all in constant-dollar terms.

Not A or B

On a graph showing real national income on the vertical axis and time on the horizontal axis, the trend-line would probably be a good approximation of the Question 3 options: business cycle. distribution of income. inflation rate. path of potential output. unemployment rate.

Not C or A

Question 9 options: $4,620. $5,100. $5,650. $5,850. $6,250. Save

Not D or A

If the price index is P1 in year 1 and P2 in year 3, the average inflation rate per year over this period is calculated as Question 7 options: (P2 - P1) x (100/2) [(P2 - P1)/P1] x 100 [(P2 - P1)/P1] x [100/2] [(P1 - P2)/P2] x 100 [(P1 - P2)/P2] x [100/2] Save

Not D or B

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 Question 12 options: 5%. 5.2%. 8%. 10%. 50%.

A

A nation's real national income in a given year measures the Question 1 options: dollar income earned by the nation's producing sector. value of output produced by the economy, measured in constant dollars. level of national income that is subject to taxation by the federal government. market value of national output produced by the economy. opportunity cost of the economy's national output.

B

A worker currently earning $3,000 per month has negotiated a 4% wage increase in anticipation of a 4% inflation rate in the next year. Under what scenario will the worker have a higher purchasing power? Question 8 options: if next year's inflation rate is 4% if next year's inflation rate is 3% if next year's inflation rate is 5% if next year some prices increase by only 4% if next year some prices increase by only 5%

B

An output gap with Y < Y* Question 2 options: is desirable because it keeps wage costs low. results in a loss of output due to unemployed resources. tends to force prices up. occurs when there is excess demand. is known as an inflationary boom.

B

Nominal income is equal to real income if the CPI is less than 100. Question 18 options: True False

B

The CPI in 2010 was 218, while the CPI in 1980 was 82. If you had $5,000 in 1980, its equivalent purchasing power in 2008 would be $10,850. Question 19 options: True False

B

The full-employment rate of unemployment is zero. Question 15 options: True False

B

The natural rate of unemployment consists of frictional unemployment plus cyclical unemployment. Question 14 options: True False Save

B

le 9-1: Consider the data below for a simple economy. Total population 20,000 Working-age population 15,000 Employment 1,000 Unemployment 100 Question 10 options: (100/1,000) × 100. (100/1,100) × 100. (100/15,000) × 100. (100/20,000) × 100. (1100/5,000) × 100.

B

Refer to Table 9-1. The labor force participation rate for this simple economy equals Table 9-1: Consider the data below for a simple economy. Total population 20,000 Working-age population 15,000 Employment 1,000 Unemployment 100 Question 11 options: (1,000/1,100) × 100. (1,000/15,000) × 100. (1,100/15,000) × 100. (1,100/20,000) × 100. (1,100/5,000) × 100.

C

Workers laid off as a result of a recession suffer Question 13 options: frictional unemployment. structural unemployment. cyclical unemployment. seasonal unemployment. natural unemployment.

C

If nominal national income increased by 10 percent over a certain period of time while real national income increased by 20 percent, then Question 6 options: everybody in the economy became worse off. inflation has occurred during this time period. the labor force increased by 10 percent. the price level has declined by about 10 percent. the price level has increased by approximately 10 percent.

D

Refer to Table 9-17. Looking at the table above, real average hourly earnings between 2010 and 2011 changed by Table 9-17 Year Nominal Average Hourly Earnings CPI (1982-1984 =100) 2009 $10 188.9 2010 11 195.3 2011 13 201.6 Question 17 options: 1.2%. 4.5%. 9.9%. 14.5%. 21.8%.

D

efer to Table 9-3. Assume the market basket for the consumer price index has three products — Cokes, hamburgers, and CDs — with the following values in 2006 and 2013 for price and quantity: The Consumer Price Index for 2013 equals Table 9-3 Product Quantity Base Year Price (2006) Price 2013 Cokes 100 $0.50 $0.75 Hamburgers 200 2.00 2.50 CDs 10 20.00 21.00 Question 16 options: 75. 93. 108. 121. 83.

D

facing cyclical unemployment; facing temporary shut downs working longer than normal hours; facing temporary shutdowns experiencing zero unemployment; operating extra shifts experiencing zero unemployment; operating beyond their normal capacity working longer than normal hours; operating beyond their normal capacity

E

Imagine that you borrow $5,000 for one year and at the end of the year you repay the $5,000 plus $600 of interest. If the inflation rate was 4%, what was the real interest rate you paid? Question 20 options: 16 percent 12 percent 8 percent 6 percent 4 percent

c