Chapter 20 - Macro

The short-term unemployment arising from the process of matching workers with jobs is called

frictional unemployment.

Which of the following would decrease the unemployment rate?

government aid to retrain unemployed workers

Upon your graduation from college, you find that the economy is in recession and the unemployment rate is relatively high. Nonetheless, most Americans in this situation would continue along their career paths looking for a new job because

high unemployment rates do not usually last for very long.

The unemployment rate equals the number of unemployed divided by the ________, all times 100.

labor force

Which of the following labor market statistics best indicates the amount of labor that is available to the economy from a given working-age population?

labor force participation rate

The costs to firms of changing prices are called

menu costs.

The real interest rate equals the nominal interest rate ________ the inflation rate.

minus

The producer price index measures the prices that firms

receive for the goods and services they use at all stages of production.

The labor force participation rate equals the

(labor force divided by working-age population) × 100.

Which of the following statements is true about the U.S. economy?

Each year, many new jobs are created and many existing jobs are destroyed.

Which of the following explains the changes in the U.S. adult male labor force participation rate since 1948?

Younger men are remaining in school longer as compared to the past.

The natural rate of unemployment is made up of

frictional and structural unemployment.

Using a broader measure of the unemployment rate where discouraged workers and part-time workers who wished to work full time were counted as unemployed, the BLS estimates the unemployment rate in April 2017 would have ________ compared to the measured unemployment rate.

almost doubled

If the employment-population ratio in 2017 was at the same level as it was in 2006,

an additional 8 million people would have been working in 2017 than actually were.

Which of the following price indices comes closest to measuring the cost of living of the typical household?

consumer price index

If you have trouble finding a job because of a slowdown in the overall economy, we would say that you are

cyclically unemployed.

Due to lowering its prices to compete with its rivals, increased competition from Airbus, and cuts to military spending, Boeing announced it would ________ the number of persons it employed in 2017 and this would ________ the total number of persons unemployed in the economy.

decrease; increase

Since 1948, the labor force participation rate for adult men has ________ and for adult women has ________.

decreased; increased

The real wage equals the nominal wage ________ the CPI, all times 100.

divided by

The Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill.

employed

The labor force equals the number of people

employed plus unemployed.

The labor force is the sum of

employed workers and unemployed workers.

An advantage of the household survey over the establishment survey of the labor market is that the household survey

includes the number of self-employed persons.

The percent increase in the CPI from one year to the next is a measure of the

inflation rate.

An advantage of the establishment survey over the household survey of the labor market is that the establishment survey

is based on actual payrolls, rather than on unverified answers.

An efficiency wage

is higher than the market wage and tends to increase productivity.

The stated interest rate on a loan is the

nominal interest rate.

A full-time student who is not working is categorized as

not in the labor force.

Discouraged workers are classified by the BLS as

not in the labor force.

Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as

not in the labor force.

The Bureau of Labor Statistics would categorize a retiree who is not working as

out of the labor force.

Unemployment arising from a persistent mismatch between the skills and characteristics of workers and the requirements of jobs is called

structural unemployment.

The unemployment rate is an important economic statistic that can tell us about the health of the economy. If the unemployment rate turns out to be high or higher than anticipated, we would expect

that stock prices are more likely to fall.

The broadest measure of the price level that includes all final goods and services is

the GDP deflator.

What does the PPI measure?

the average of the prices received by producers of goods and services at all stages of the production process

The average price of goods and services in the economy is also known as

the price level.

Deflation occurs when

there is a decline in the price level.

To reduce the bias in the consumer price index, the Bureau of Labor Statistics

updates the market basket every two years, rather than every 10 years.

In 2006, before the start of the recession, the employment-population ratio was 63.4 percent. In April 2017, more than six years after the end of the recession, the ratio

was still only 60.2 percent.