econ 9, 21, 22 part 2
Person- Work hours- Activity Candy-20-works at own business. Also completed application forms and attended two job interviews. Jerry-40-works at GM Meg-10-student weekend job Joey-0-on vacation from bank Serena-10-part-time check-out clerk who wants a full time job Ari-0-waiting for recall to regular job in 2 weeks Kosta-0-stopped looking for work; going back to school Mimi-0-retired Harry-0-retired Hank-12-works at own business unpaid For these 10 people, the unemployment rate is ____ percent and the labor force participation rate is ____ percent. The unemployment rate in this community is _______ the unemployment rate in the United States in 2019. The labor force participation rate in this community is _______ the labor force participation rate in the United States in 2019.
16.7%; 60% greater than; less than
The average unemployment rate was lowest during the _____ and it resulted from _______. The average unemployment rate was highest during the _____ and it resulted from _______.
1960's; Vietnam war defence spending and consumer spending encouraged by expanded social programs 1980's; a deep recession
Real GDP was below potential GDP in _______ because the Z-Pop ratio shows that _______. Real GDP is below potential GDP in _______ because the output gap is _______.
2010; less than 90 percent of the working-age population is fully utilized 2010; negative
In mid-2019, the broadest measure of unemployment was at approximately _______ of its peak.
40 percent
Recovery won't improve unemployment Despite some optimism about the seeds of recovery, the Congressional Budget Office (CBO) sees joblessness rising. The CBO sees unemployment peaking at 10.4% next year from an average of 9.3% this year, before it falls to 9.1% in 2011. Why does unemployment continue to rise as an expansion begins?
As an expansion begins, previously marginally attached workers look for jobs, exceeding the number of people hired.
Chained-dollar real GDP is the measure of real GDP calculated by the _____.
Bureau of Economic Analysis
who in the following statements is a discouraged worker?
Dan is available to work but has not looked for a job in the past eight weeks because of repeated applications but no single offer.
Who in the following statements is a full-time worker and who is a part-time worker?
Dan works at Subway for 8 hours each day from Monday through Friday. Mary works at Starbucks' for 4 hours each day on weekends.
Which of the following countries is facing a recession?
Japan's real GDP of 3.8 percent in the first quarter decreased by 0.3 and 0.4 percent respectively in the second and third quarters of 2012.
Which of the following statements illustrates structural unemployment?
Outsourcing resulted in many job losses in the mid 2000s.
Which of the following statements illustrates frictional unemployment?
Robin is quitting his current job to find another that has better prospects.
Who in the following statements is a part-time worker for economic reasons?
Sherrie is a graduate who started working at Safeway pharmacy for 4 hours each day, three days a week, as they do not currently have a full-time opening.
Use these four statements to distinguish among the three types of unemployment: frictional, structural, and cyclical. Which of these statements is correct? 1. An autoworker who loses his job because of a slowdown in the economy is an example of cyclical unemployment. This type of unemployment increases in recessions and decreases in expansion. 2. An unemployed graduate searching for a first job is an example of frictional unemployment. This type of unemployment arises from normal labor turnover. 3. An unemployed graduate searching for a first job is an example of cyclical unemployment. This type of unemployment arises when changes in technology or international competition change the skills needed to perform jobs. 4. An unemployed textile worker in South Carolina who loses her job because of competition from China is an example of frictional unemployment. This type of unemployment arises when changes in technology or international competition change the skills needed to perform jobs.
Statements 1 and 2 are true; the others are false.
The New York Times thinks the _______ measure of unemployment is more relevant than the official unemployment rate. In mid-2019, this measurement was _______.
U-6; 7 percent
When using the income approach to measure GDP at market prices, in addition to summing all factor incomes it is necessary to _______.
add indirect taxes less subsidies to convert aggregate income from factor cost to market prices
The expenditure approach to measuring U.S. GDP equals _______.
all expenditure on final goods and services produced in the United States in a given time period
If potential GDP in 2020 was $270 and it grew by 1 percent in 2021, in which phase of the business cycle is the economy? The economy is in _______ because _______ between 2020 and 2021.
an expansion; real GDP is increasing
The natural unemployment rate is the unemployment rate when the economy is _____.
at full employment
A marginally attached worker is a person who does not have a job, is _____ and _____ to work, has _____ specific efforts to find a job within the previous _____ weeks, but has looked for work sometime in the recent past.
available; willing; not made; four
Cyclical unemployment is the fluctuating unemployment over the business cycle that increases during _____ and decreases during _____.
a recession; an expansion
The percentage of the employed people who have part-time jobs increases in _______ because _______.
a recession; firms cut work hours
Why did the NBER report that the 2008 recession began before real GDP had fallen for two successive quarters? The NBER Committee _______
based its decision on peaks in the data on real personal income, real manufacturing, wholesale and retail sales, industrial production, and employment, which all peaked between November 2007 and June 2008
The standard of living can be easily compared _______. The standard of living cannot be easily compared in _______ because _______.
between China and Russia or between Canada and the United States, because household production, the underground economy, leisure hours, and the environment are similar in each pair either China or Russia and either Canada or the United States; in each pair household production, the underground economy, leisure hours, and the environment are different
How do reports about the growth rate of real GDP influence you? Reports about the growth rate of real GDP ________. Does a reported increase in the U.S. standard of living mean that your personal standard of living is increasing? Are all of your production activities recorded in the National Income and Product Accounts? How could you value your nonmarket production?
can help you to make decisions about when you should stay in school and when you should look for a job No because U.S. real GDP per person is the standard of living on average No, only market activities are included in the National Income and Product Accounts By valuing the opportunity cost of the production
When the economy goes into recession, the biggest increase in unemployment is _______.
cyclical because jobs are lost in many industries as they cut production
Full employment is when there is no _____ unemployment or, equivalently, when all the unemployment is _____ or _____.
cyclical; frictional; structural
Based on this information, differences in real GDP per person _______ correctly rank the standard of living in these countries because _______. To accurately assess the relative standard of living in these countries, we need additional information about _______.
do; when other factors that influence the standard of living are similar the differences in real GDP per person are small, but when these other factors are not similar, the differences are huge the value of household production, the underground economy, leisure, and environment differences
Marla is an associate at JCPenney who wants to work 40 hours week but works 25 hours a week because sales at JC Penney are slow. Marla works part time for _______ reasons. Joe is a server at Olive Garden who wants to work 40 hours a week but works 15 hours a week because the number of patrons at Olive Garden has decreased. Joe works part time for _______ reasons. Michelle is a student who wants to work 20 hours a week at Cost Cutters so she can attend school. Cost Cutters schedules her for 20 hours a week. Michelle works part time for _______ reasons. Florence is semi-retired and wants to work 15 hours a week at Walgreens so she can spend time with her grandchildren. Walgreens schedules her for 15 hours a week. Florence works part time for _______ reasons.
economic; economic noneconomic; noneconomic
Gross domestic product is the market value of all the _______ in a given time period.
final goods and services produced by all firms located in the United States
The unemployment that is present in the U.S. economy in April 2019 is _______.
frictional and structural because the economy is operating above full employment
GDP is a poor measure of economic well-being because it _______.
includes only production that is traded in markets
Saving equals _______.
income minus consumption expenditure minus net taxes
When the output gap is positive, the unemployment rate _______ the natural unemployment rate. When the output gap is negative, the unemployment rate _______ the natural unemployment rate.
is less than; is greater than
The following statements about the business cycle are correct except _______.
it is a regular predictable cycle in real GDP around potential GDP
Why will one job not last your entire life? Because _______. When you decide to quit your job, what type of unemployment will you enter? Why? What are some of the population categories used in the Current Population Survey that you will pass through during your lifetime? What labor market conditions do you think would make it easier for you to find work?
jobs are created and destroyed, technology and international competition change the skills needed and locations of jobs, and personal reasons lead to changes in job choice Frictional unemployment if the decision is part of normal labor turnover unassociated with recession You are out of the labor force when you retire Low unemployment rate and high Z-Pop ratio
The unemployment rate is the percentage of the people in the _____ who are unemployed.
labor force
The additional jobs in construction and professional and healthcare services _______ the unemployment rate. Other things remaining the same, the natural unemployment rate is _______.
lowers not expected to change because the events described are normal labor turnover
The labor force is the number of people employed plus the _____.
number unemployed
Real GDP per person is not an accurate measure of the standard of living because it _______.
omits the goods and services that people produce for themselves
The working-age population is the total number of _____ aged _____ years and over who are not in jail, hospital, or some other form of institutional care or in the U.S. Armed Forces
people; 16
The output gap is real GDP minus _____ expressed as a percentage of _____.
potential GDP; potential GDP
Why do we care about the unemployment rate? We care because it _______. What is the standard of way of determining if the economy is at full employment? We compare _______. Why might the standard way of determining full employment not be the best method? Is there a new and possibly better way of determining if the economy is at full employment? What is a better measure of full employment—using the Z-Pop ratio or the natural unemployment rate?
provides an indication of the underutilization of labor resources the unemployment rate with the natural unemployment rate It doesn't include all underutilized labor. Yes, the Z-Pop ratio The Z-Pop ratio because it includes under utilized labor omitted from the official and natural unemployment rates.
The economy is at full employment when all unemployment is _______.
structural and frictional
A _______ is a final good and _______ is an intermediate good.
tank of gasoline bought by you; jet fuel bought by Southwest Airlines
The trend in the labor force participation rate of women is due in part to _______. The trend in the labor force participation rate of men is due in part to _______. The trend in the labor force participation rate of all working-age people is _______.
the creation of more white-collar jobs with flexible work hours; some men taking early retirement upward until 2000, and then downward
Potential GDP is the value of real GDP when _______.
the unemployment rate equals the natural unemployment rate
Why do we care about the timing of business cycle turning points and phases? We care because _______. Why did the NBER date the recession at November 2007 when the economy did not experience two successive quarters of negative real GDP growth until the second quarter of 2008? The NBER _______. Why is real GDP the most reliable measure of aggregate domestic production? If the two measures of real GDP give "conflicting stories", does that mean we need new measures of real GDP?
they give information to the government to hit the accelerator or step on the brakes determined that significant data other than real GDP indicated that the economy was in a recession Real GDP measures activity in all sectors of the economy—households, firms, and government. No, most often the two measures of real GDP give similar stories. The peak of the last recession was an unusual situation.
The Great Depression was a period of high _____, low _____, and extreme economic hardship that lasted from _____ to _____.
unemployment; incomes; 1929; 1939
If the BLS included all marginally attached workers as being unemployed, the _______ would be _______.
unemployment rate; higher
The BLS counts Jody as being unemployed if she _______.
wants a job and is willing to take a job but after searching last week cannot find a job
The resulting rise in unemployment is mostly a rise in _______ unemployment because _______.
cyclical; it is related to the state of the economy
A marginally attached worker is a person who _______.
doesn't work, is available and willing to work, but hasn't looked for a job recently
When the unemployment rate _______ the natural unemployment rate, real GDP is _______ potential GDP and the output gap is _______.
exceeds; below; negative
Over the past few years prior to 2019, the unemployment rate was _______ and the output gap was _______. In 2019, the unemployment rate was _______.
falling; gradually shrinking below the natural unemployment rate and the economy was operating above full employment
A recession _______ the unemployment rate and _______.
increases; cyclical unemployment increases
Potential GDP is the value of real GDP when all the economy's factors of production - _____, _____, _____, and _____ - are fully _____.
labor; capital; land; entrepreneurial ability; employed
The business cycle is a _____ but _____ up-and-down movement of total _____ and other measures of economic activity.
periodic; irregular; production
The labor force participation rate is the percentage of the _____ who are members of the labor force.
working-age population
