macroeconomics test 2
The ____ equals the number of ____
labor force; unemployed and employed persons
because of the biases in calculating the CPI, actual inflation is
less than the measured inflation rate by about 1 percent per year
if unemployment is at the natural rate, then there
no cyclical unemployment
unemployment caused by changes in technology is called ____
structural unemployment
if real GDP is $13,500 billion and aggregate hours are 110 billion, labor productivity equals
$123 per hour
If the CPI was 122.3 at the end of last year and 124.5 at the end of this year, the inflation rate over these two years was
1.8 percent
based off of the following data for tiny town, the unemployment rate equals Population-100 Labor Force-80 Number of employed persons- 70 Number of discouraged workers-5
10/80 x 100
if the basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year, the CPI for the latter year equals
225
during 2013, the country of economia had a real GDP of $115 billion and the population was 0.9 billion. in 2012, real GDP was 105 billion and the population was 0.85 billion. Economia's growth rate of real GDP per person is
3.23 percent
the commodity substation bias is that
consumers decrease the quantity they buy of goods whose relative prices rise and increases the quantity of goods whose relative price falls
discouraged workers fall into which population category
Not in the labor force
if the real wage rate is such so that the quantity of labor supplied equals the quantity of labor demanded
a full employment equilibrium occurs, and actual gdp equals potential gdp
labor force participation is calculated as the
a labor force divided by the working age population then multiplied by 100
economic growth is measured by
changes in real GDP
if a worker is temporarily laid off because the economy is in a recession
cyclical unemployment increases
cyclical unemployment ___ during expansions and ____ during recessions
decrease; increase
an advance in technology shifts the production function upward and shifts the labor
demand curve right
the relationship between the labor employed by a firm and the real wage rate is shown by the
demand for labor curve
the demand for labor curve is
downward sloping
if the inflation rate is negative, the price level in economy is
falling
This type of unemployment reflects the normal amount of unemployed workers who possess skills that will enable them to find another job.
frictional unemployment
when the unemployment rate is less than the natural unemployment rate, real gdp is ___ than potential gdp and the output gap is ___
greater; positive
potential GDP per labor hour can increase due to
increase in labor productivity
an increase in the price level is defined as
inflation
activities that encourage faster growth are
investment in new capital and human capital
an individual who has stopped looking for a job but has looked in the past and still wants a job is referred to as
marginally attached worker
best definition for unemployment
not working and not looking for a job
during a recession, the ___
number of marginally attached increases
full employment occurs
only if the unemployment rate is equal to the natural unemployment rate
all of the following contribute to labor productivity growth except
population growth
in the labor market, an increase in labor productivity ____ the real wage rate and ____ the level of employment.
raises; increases
if the economy is at full employment
real GDP equals potential GDP
the CPI is a measure of the average of the prices paid by ___ for a fixed basket of consumer goods and services.
urban consumers
Along the aggregate production function, as the quantity of labor rises, real GDP
rises
as labor continues to increase, a nation will
see a movement along the aggregate production function, but real GDP will increase less and less
the unemployment rate will never equal zero percent because
some portion of the labor force will always be between jobs
when the economy switches production toward services and away from manufacturing and workers in the manufacturing industry are permanently laid off
structural unemployment increases
an increase In the population and hence the supply of labor causes a
surplus of labor at the original real wage rate and the real wage rate will fall
Assume the inflation rate falls from 4 percent to 2 percent. This means that
the price level is increasing more slowly
new growth theory proposes that real GDP per person grows because of ___ and that growth ___
the pursuit of profit; persist indefinitely
the supply of labor curve is
upward sloping
