Macroeconomics ~ Chapter 8

If a country has a working age population of 200 million, 135 million people with jobs, 15 million people unemployed and seeking employment, then its unemployment rate is:

%

Menu costs of inflation are the

costs associated with business changing prices

A drop in the inflation rate is called

disinflation

The official unemployment rate reported by the government may tend to understate the amount of unemployment because it

excludes discouraged workers that are not actively seeking employment

Last week Stephanie quit her job as a copywriter at an advertising agency. She spent the past few days browsing the help wanted ads but hasn't found anything that matches her skills. Stephanie is best classified as

frictionally unemployed

An increase in the price level that is extremely rapid (say 400% per year) is called:

hyperinflation

If more women enter of reenter the labor force , the natural rate of unemployment is expected to:

increase

Increases in unemployment compensation

increase unemployment

When inflation rises quickly

lenders will be hurt and borrowers will benefit

The threat of future inflation

makes people reluctant to lend money for long periods

A person who is not working and is not looking for work is

not counted in the unemployment statistics

Unanticipated inflation

reduces the value of money

The natural rate of unemployment is achieved when

there is no cyclical unemployment

During a recession

unemployment increases and the growth rate if real GDP decreases

The consumer price index in 1979 was 72.6. In 1980, it was 82.4. What was the rate of inflation from 1979 to 1980?

13.5%

If a country has a working age population of 200 million, 135 million people employed, and 15 million people unemployed and seeking employment, then its labor force is

150 million

A survey reveals that on a small island 40 people have jobs, 10 people are looking for jobs and 30 people are neither working or looking for work. The unemployment rate on the island is

20%

Suppose that the nominal rate of interest is 7% and the inflation rate is 3%. The real rate of interest is equal to:

4%

Which if the following is an example of someone who is cyclically unemployed?

an autoworker who is laid off because of a decline in sales caused by a recession

To be counted as unemployed, one must

be out of work and actively seeking a new job