Section 3 Modules 10-15

Use the information for a hypothetical economy presented in the following table to answer the following question. POPULATION AGE 16 AND OLDER - 200,000 LABOR FORCE - 100,000 # OF PEOPLE WORKING PART TIME - 20,000 # OF PEOPLE WORKING FULL TIME - 70,000 How many people are unemployed?

10,000

The table below shows employment data for the country of Gerbilville. Status # of people Adult population 1,0001,000 Employed 600600 Not working but seeking employment 150150 Not working and not seeking employment 250250 Which of the following calculations correctly determines the unemployment rate in Gerbilville?

150/750​×100=20%

Tyrion has managed to save up \$1{,}000$1,000 which he has deposited in a Westeros Bank account that pays 4\%4%interest. Which of the following will be true if the actual inflation rate is lower than the expected inflation rate?

Tyrion would benefit, the bank would be worse off

The Bank of King's Landing has made many loans to the lords of Winterfell. The Bank is considering whether they will benefit or not if the rate of inflation changed. Under which circumstance would the Bank realize an unexpected benefit?

When the actual rate of inflation is lower than the anticipated rate of inflation

Use the information provided in this table for an economy that produces only apples and oranges. Assume year 1 is the base year. Year 1 Year 2 Quantity of apples 3,000 4,000 Price of an apple $0.20 $0.30 Quantity of oranges 2,000 3,000 Price of oranges $0.40 $0.50 What is the value of real GDP in each year? (Answer in this format: "Year 1: xxxxx; Year 2: xxxx"

Year 1: 1,400; Year 2: 2,000

The unemployment problem in an economy may be understated due by the unemployment rate due to

discouraged workers

The Circular Flow diagram is a simple model of the macroeconomy which

households own the factors of production

Which of the following is NOT included in GDP?

imports

Real GDP per capita is an imperfect measure of the quality of life in part because it

includes expenditures on natural disasters

Burgin works part-time serving bubble tea at a Karaoke club while he tries to find a full-time job as a lumberjack. Which of the following best describes Burgin's employment situation?

underemployed

Which of the following is included in GDP?

changes to inventories

Which of the following components makes up the largest percentage of GDP measured by aggregate spending?

consumer spending

Use the information for a hypothetical economy presented in the following table to answer the following question. POPULATION AGE 16 AND OLDER - 200,000 LABOR FORCE - 100,000 # OF PEOPLE WORKING PART TIME - 20,000 # OF PEOPLE WORKING FULL TIME - 70,000 What is the correct calculation of unemployment rate?

(20,000+70,000)/100,000 x100 = 10%

GDP is equal to

(the total value of all goods and services produced in an economy during a given period, C + I + G + IM, the total value of intermediate goods plus final goods, the total income received by producers of final goods and services) none of the above

The table below shows population and employment data for Downtown Abbey, a country with a total population of 11 million people. Status # of people Children 0\text{-}150-15 years old 200,000200,000 Employed 325,000325,000 Unemployed 25,00025,000 Discouraged adult workers 50,00050,000 Full-time students over 1515 100,000100,000 Retired individuals 100,000100,000 Stay-at-home parents and other non-working civilians over 1616 100,000100,000 Non-civilians (employed by armed forces) 60,00060,000 Institutionalized individuals 40,00040,000 What is Downtown Abbey's labor force participation rate (LFPR)?

50%

Use the information for a hypothetical economy presented in the following table to answer the following question. POPULATION AGE 16 AND OLDER - 200,000 LABOR FORCE - 100,000 # OF PEOPLE WORKING PART TIME - 20,000 # OF PEOPLE WORKING FULL TIME - 70,000 What is the labor force participation rate (LRPF)?

50%

There are 125,000 people in Hamiltonia. Of these, 25,000 are children. There are 50,000 people employed and 30,000 people unemployed. What is the labor force participation rate in Hamiltonia?

80%

Who are the winners and losers from unexpected inflation?

Borrowers win, lenders lose

Which of the following is true of Real GDP? I. It is adjusted for changes in prices II. It is always equal to nominal GDP III. It increases whenever aggregate output increases

I and III only

To be considered unemployed, a person must I. not be working II. be actively seeking a job III. be available for work

I, II, and III

Refer to the 2013 data in the table below Nominal GDP in Billions of dollars United States $16,803 European Union $17,371 Japan $4,902 Which of the following can be determined with the information in the table? I. Residents of Japan were worse off than residents of the United States or the European Union II. The European Union had a higher nominal GDP per capita than the United States III. The European Union had a larger economy than the United States

III only

Ygritte loaned Mance \$900$900. He agreed to repay her in full, plus 6\%6% interest, after one year. When he pays off his loan, Mance discovers he is better off than he had expected to be. Which of the following best describes what must have happened to the rate of inflation?

Inflation was higher than he expected

You borrow \$200$200 from the First Bank of Westeros to purchase Kraken repellant. The bank charges a fixed nominal interest rate of 18\%18% per year and you will repay them in one year. You and the bank both anticipate that there will be 7\%7% inflation. However, after the loan agreement is signed, the rate of inflation turns out to be 9\%9%. Who is hurt by this unanticipated inflation, and why are they hurt by it?

The bank is hurt because the value of what is repaid has decreased

The best measure for comparing a country's aggregate output over time is

real GDP