Macroeconomics

In 1931, President Herbert Hoover was paid a salary of $75,000. Government statistics show a consumer price index of 15.2 for 1931 and 214.5 for 2009. President Hoover's 1931 salary was equivalent to a 2009 salary of about

$1,058,388

In an imaginary economy, consumers buy only sandwiches and magazines. The fixed basket consists of 20 sandwiches and 30 magazines. In 2006, a sandwich cost $4 and a magazine cost $2. In 2007, a sandwich cost $5. The base year is 2006. If the consumer price index in 2007 was 125, then how much did a magazine cost in 2007?

$2.50

in 2009, based on concepts similar to those used to estimate US employment figures, the Japanese adult population was 110.272 million, the labor force was 65.362 million, and the number of people employed was 62.242 million. according to these numbers, the Japanese labor-force participation rate and unemployment rate were about

59.3% and 4.8%

if Armani raises the price of its italian jeans then

CPI will rise and GDP deflator remains constant

The largest sector in the consumer price index market basket is food and beverage purchases.

False

An increase in the price of nuclear reactors produced in the US probably won't be reflected in the US CPI.

True

The CPI does not reflect the increase in the value of the dollar that arises from the introduction of new goods.

True

if the stock market boom induces early retirement, then the unemployment rate will rise

True

the CPI overstates the increases in the cost of living

True

in the calculation of the CPI, tea is given greater weight than beer if

consumers buy more tea than beer

CPI data is compiled by the bureau of economic analysis on a quarterly basis

false

The CPI includes capital goods but the GDP deflator excludes them

false

When there is a minimum wage requirement or a union negotiation deal, firms voluntarily raise the wage rate above the market equilibrium level.

false

if some unemployed workers give up searching for work, the unemployment rate will increase

false

the inflation rate reported in the news is usually calculated from the GDP deflator rather than the consumer price index

false

workers searching for jobs that best suit them is most closely associated with

frictional unemployment

if the average annual tuition fees in public colleges and universities in the US were $1,414 in 1986. In 2006, the average went up to $5,834. If the CPI=109.6, 203.8 in 1986 and 2006, respectively, which of the following is correct?

if prices were as high in 1986 as 2006 then tuition and gees would have been $2,629 on average

which of the following statements is not correct

if the CPI in 2008 is 115 and if 2007 is the base year then the inflation rate in this economy is 10%

if the minimum wage were currently above the equilibrium wage, than a decrease in the minimum wage would

increase the quantity of labor demanded but decrease the quantity of labor supplied

minimum wage laws

increase the quantity of labor supplied and lower the quantity of labor demanded

when the overall level of price in the economy is increasing, economist say that the economy is experiencing

inflation

the efficiency wage theory states that firms pay higher wages in order to

lower workers turnover

the consumer price index is used to

monitor changes in the cost of living over time

cyclical unemployment is

none of the above

indexation is

only A and C

discouraged workers

only b and c

a ban on labor unions will most likely

reduce structural unemployment

if the minimum wage were currently above the equilibrium wage, then a decrease in the minimum wage that kept it above the equilibrium wage would

reduce the surplus of labor

Suppose that neither textile workers nor shoemakers are unionized. If textile workers unionize, then the supply of shoemakers will

rise and their wages will fall

The changes in the composition of demand across industries or regions of a country is known as

sectoral shifts

Most spells of unemployment are

short, but most unemployment observed at any given time is long term.

is the type of unemployment that occurs when there are fewer jobs than workers

structural unemployment

unions contribute to

structural unemployment

Suppose that the prices of dairy products have risen relatively less than prices in general over the last several years. To which problem in the construction of the CPI is this situation most relevant?

substitution bias

suppose that the prices of meat have risen relatively more than prices in general over the last several years. to which problem in the construction of the CPI is this situation most relevant

substitution bias

an increase in the price of domestically produced tractors will be reflected in

the GDP deflator but not in the consumer price index

unemployment data is produced by

the bureau of labor statistics

what a union bargains successfully with employers, in that industry

the quantity of labor supplied increases and the quantity of labor demanded decreases

Some degree of unemployment is inevitable in an economy.

true

the bureau of labor statistics defines the labor forces as the sum of the employed and the unemployed

true

for an imaginary economy the value of the CPI was 125 in 2014 the inflation rate between 2013 and 2014 was 4.8% the CPI in 2013 was

119.27

if the consumer price index is 220 in one year and 260 in the next year. What was the inflation rate?

18.2%

The Bureau of Labor Statistics reported in 2005 that there were 28.19 million people over age 25 who had no high school degree or its equivalent, 11.73 million of whom were employed and 1.04 million of whom were unemployed. What were the labor-force participation rate and the unemployment rate for this group?

45.3% and 8.1%