ECO 111 HW 5

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The table shows employment statistics for a fictional country. Use the information to answer the questions. Round your percentages to two decimal places. Employed: 5,905 Unemployed: 452 Not in the labor force: 571 What is the total labor force?

6357

True or False: Poorer countries have historically been responsible for the bulk of world carbon emissions because of poor technology and environmental regulations.

False

True or False: The key to prosperity in the 20th century is an economy rich in natural resources.

False

The government's direct role in the production of physical capital is primarily focused on

developing infrastructure

Individuals who want to work, but have given up searching for a job because of limited prospects, are known as

discouraged workers

The purpose of growth accounting is to

estimate the contribution each component of the aggregate production function makes to overall economic growth.

The natural rate of unemployment equals

frictional unemployment plus structural unemployment.

Eric is an experienced project manager who lost his job at a tech start-up because the company's product failed to become popular. He is confident he can get a new job and has already rejected a number of offers. Eric is facing

frictional unemployment.

Hamid has just graduated as a lawyer from an esteemed law school. He is confident of getting a job and has already refused a few lower‑paying jobs. Hamid is facing

frictional unemployment.

A doctor's knowledge about a new cancer treatment affects

human capital

An increase in the number of college graduates impacts

human capital

Classify each example as either relating to human capital, physical capital, or technology. An increase in adult literacy affects

human capital

More people graduating from culinary school affects

human capital

The government's direct role in creating human capital is primarily focused on

improving the education system

Identify whether the actions or scenarios would likely increase or decrease the natural rate of unemployment. A large number of young people entering the labor force

increase

Identify whether the actions or scenarios would likely increase or decrease the natural rate of unemployment. An increase in union membership

increase

Identify whether the actions or scenarios would likely increase or decrease the natural rate of unemployment. Extra financial benefits for the unemployed

increase

Identify whether the actions or scenarios would likely increase or decrease the natural rate of unemployment. Increasing the minimum wage

increase

Suppose a hypothetical economy is currently operating at point A on the per worker production function (PWPF) labeled PF1 in the accompanying graph. Which event could move the economy from point A to point B?

increase in the amount of capital

Suppose a hypothetical economy is currently operating at point A on the per worker production function (PWPF) labeled PF1 in the accompanying graph. Which event could shift the PWPF from PF1 to PF2, or from point A to point C?

technological advancement

A new cancer treatment affects

technology

New distribution techniques affect

technology

Who reports the official U.S. unemployment rate?

the U.S. Bureau of Labor Statistics

Which of the factors would decrease the rate of frictional unemployment?

the advent of the Internet, which makes finding available jobs easier

Individuals who are involuntarily working part‑time are considered

underemployed

By excluding the groups identified in the previous questions, the U.S. Bureau of Labor Statistics calculation methods

understate the true level of unemployment.

Determine whether each of the individuals is considered unemployed or not unemployed. Alex just turned 16 and started applying for jobs. He has not found a company that will hire him yet.

unemployed

Determine whether each of the individuals is considered unemployed or not unemployed. Erik volunteers for 10 hours per week at his children's school and does no other work. He sends his resume to 10 potential employers daily.

unemployed

can cause distortion to the tax system

unit of account costs

can reduce the quality of economic decisions

unit of account costs

causes difficulty in firms and individuals financial planning

unit of account costs

makes money a less reliable source of measurement

unit of account costs

Which of the choices is most directly related to cyclical unemployment?

recessions

True or False: Long-run economic growth is unlikely to be sustainable because of finite natural resources.

False

Profits of a large investment company

Is not an input

Governments play an indirect role in private savings and investment through

regulating the financial system

Refer to the hypothetical data in the table to answer the three questions. 2017: Nominal interest rate: 5%, Real interest rate: —, Inflation rate: 3% 2018: Nominal interest rate: 3%, Real interest rate: 5%, Inflation rate: — 2019: Nominal interest rate: —, Real interest rate: 3%, Inflation rate: 3% What was the inflation rate in 2018?

-2%

If instead the growth rate is 7%, the doubling time for the economy is

10 years

True or False: In the modern economy, countries that possess few domestic natural resources essentially have no chance to develop economically.

False

Suppose the civilian non-institutionalized working-age population is 35.9 million in a hypothetical economy. Of these, 4.6 million are working part-time and 15.71 million are working full-time. Assume the Bureau of Labor Statistics (BLS) definitions are used for calculating unemployment data. Among those not working, the most recent job-search activity for 3.20 million happened less than two weeks ago, while 1.72 million most recently looked for work between two and four weeks ago. An additional 0.86 million most recently looked for work five weeks ago, and the remaining 9.81 million who do not have jobs have not looked for work in the past six weeks. Round your answers to two decimal places. What is the unemployment rate?

19.50%

Refer to the hypothetical data in the table to answer the three questions. 2017: Nominal interest rate: 5%, Real interest rate: —, Inflation rate: 3% 2018: Nominal interest rate: 3%, Real interest rate: 5%, Inflation rate: — 2019: Nominal interest rate: —, Real interest rate: 3%, Inflation rate: 3% What was the real interest rate in 2017?

2%

Suppose the civilian non-institutionalized working-age population is 35.9 million in a hypothetical economy. Of these, 4.6 million are working part-time and 15.71 million are working full-time. Assume the Bureau of Labor Statistics (BLS) definitions are used for calculating unemployment data. Among those not working, the most recent job-search activity for 3.20 million happened less than two weeks ago, while 1.72 million most recently looked for work between two and four weeks ago. An additional 0.86 million most recently looked for work five weeks ago, and the remaining 9.81 million who do not have jobs have not looked for work in the past six weeks. Round your answers to two decimal places. What is the size of the total labor force?

25.23 million

The table shows employment statistics for a fictional country. Use the information to answer the questions. Round your percentages to two decimal places. Employed: 5,905 Unemployed: 452 Not in the labor force: 571 Suppose 246 of the 452 unemployed people have been unemployed for so long that they stop looking for work. What is the new unemployment rate?

3.37%

The average rate of growth for slow-growth countries is around 2% per year, and for fast-growth, greater than 5% per year. Suppose the growth rate of the economy is 2%. The size of the economy roughly doubles every

35 years

Suppose the civilian non-institutionalized working-age population is 35.9 million in a hypothetical economy. Of these, 4.6 million are working part-time and 15.71 million are working full-time. Assume the Bureau of Labor Statistics (BLS) definitions are used for calculating unemployment data. Among those not working, the most recent job-search activity for 3.20 million happened less than two weeks ago, while 1.72 million most recently looked for work between two and four weeks ago. An additional 0.86 million most recently looked for work five weeks ago, and the remaining 9.81 million who do not have jobs have not looked for work in the past six weeks. Round your answers to two decimal places. How many people are unemployed?

4.92 milllion

Refer to the hypothetical data in the table to answer the three questions. 2017: Nominal interest rate: 5%, Real interest rate: —, Inflation rate: 3% 2018: Nominal interest rate: 3%, Real interest rate: 5%, Inflation rate: — 2019: Nominal interest rate: —, Real interest rate: 3%, Inflation rate: 3% What was the nominal interest rate in 2019?

6%

The table shows employment statistics for a fictional country. Use the information to answer the questions. Round your percentages to two decimal places. Employed: 5,905 Unemployed: 452 Not in the labor force: 571 What is the unemployment rate?

6.91%

The table shows employment statistics for a fictional country. Use the information to answer the questions. Round your percentages to two decimal places. Employed: 5,905 Unemployed: 452 Not in the labor force: 571 Suppose 246 of the 452 unemployed people have been unemployed for so long that they stop looking for work. What is the new labor force?

6111

Suppose the civilian non-institutionalized working-age population is 35.9 million in a hypothetical economy. Of these, 4.6 million are working part-time and 15.71 million are working full-time. Assume the Bureau of Labor Statistics (BLS) definitions are used for calculating unemployment data. Among those not working, the most recent job-search activity for 3.20 million happened less than two weeks ago, while 1.72 million most recently looked for work between two and four weeks ago. An additional 0.86 million most recently looked for work five weeks ago, and the remaining 9.81 million who do not have jobs have not looked for work in the past six weeks. Round your answers to two decimal places. What is the labor force participation rate?

70.28%

The table shows employment statistics for a fictional country. Use the information to answer the questions. Round your percentages to two decimal places. Employed: 5,905 Unemployed: 452 Not in the labor force: 571 Suppose 246 of the 452 unemployed people have been unemployed for so long that they stop looking for work. What is the new labor force participation rate?

88.21%

The table shows employment statistics for a fictional country. Use the information to answer the questions. Round your percentages to two decimal places. Employed: 5,905 Unemployed: 452 Not in the labor force: 571 What is the labor force participation rate?

91.76%

True or False: In the modern economy, human and physical capital are generally less important in productivity than natural resources.

False

True or False: Carbon emissions are negatively correlated with economic growth.

False

True or False: Human and physical capital are only beneficial to an economy when there is an abundance of natural resources in the economy.

False

A recent graduate with an engineering degree

Is an input

An upgrade of computers for Mikey's Motors

Is an input

Unskilled migrant worker from Latin America

Is an input

A decrease in property taxes

Is not an input

Bonds issued by an automaker

Is not an input

Contributions to Social Security

Is not an input

Which individual is out of the labor force?

James is without a job, is able to work, but is not actively looking for work.

Which of the statements best describes the idea of economic convergence?

Lower GDP per capita countries will catch up with higher GDP per capita countries.

Select the best definition of labor productivity

Output per worker

True or False: Air and water quality in developed countries is generally much better today than it was several decades ago.

True

True or False: All else equal, countries with more natural resources have a higher GDP per capita than those with few natural resources.

True

True or False: Finding alternatives to natural resources will be very important to long-term economic growth.

True

True or False: In the 19th century, countries with the highest per capita GDP were nearly always abundant in minerals and productive farming land.

True

True or False: Over the past two hundred years, improvements in productivity have offset lost productivity reduction due to less land being available.

True

True or False: Tackling climate change issues is likely only to modestly dent long-term economic growth.

True

True or False: When the economy is doing well, a significant share of unemployment is frictional.

True

discourages people from holding money

shoe leather costs

spending time converting money into something that better holds value

shoe leather costs

Identify whether the actions or scenarios would likely increase or decrease the natural rate of unemployment. Reducing workers' collective bargaining rights

decrease

Craig lost his job several months ago. He is having a hard time finding a job that pays him more than unemployment insurance does. Craig is facing

structural unemployment.

The accompanying graph shows the labor market in the country of Harmonia. Assume that the Harmonia labor market is at the market equilibrium before the new minimum wage. The Harmonian government decides to introduce a minimum wage of $6. a. Show the new minimum wage on the graph by shifting the minimum wage line. b. What is the increase in unemployment as a result of the minimum wage? c. Which type of unemployment is affected by the new minimum wage?

a. The new minimum wage increases to $6, so move the horizontal line up. b. 40 Million c. Structural unemployment

James is an architect who has been laid off owing to a slump in the demand for property. He feels he will have to wait until the economy picks up before he can get a new job. James is facing

cyclical unemployment.

Sarah is a recent economics graduate who is entering a difficult labor market, due to a severe recession. She is continuing to look for work but is having a hard time getting interviews. Sarah is facing

cyclical unemployment.

Identify whether the actions or scenarios would likely increase or decrease the natural rate of unemployment. An increase in information about job opportunities

decrease

Identify whether the actions or scenarios would likely increase or decrease the natural rate of unemployment. More funding for government worker training programs

decrease

A significant amount of oil discovered in Texas

is an input

Economic growth is important to understand because

it is closely tied to standard of living.

Any large, sustainable increase in real GDP must be due to steadily increasing

labor productivity

Determine if the people in the example have benefited - i.e., are winners - or have been harmed - i.e., are losers - by unexpected inflation. Herb, who keeps his savings in an old coffee can

loser

Determine if the people in the example have benefited - i.e., are winners - or have been harmed - i.e., are losers - by unexpected inflation. Karen, a retired school teacher who relies upon her fixed pension to pay for her expenses

loser

Determine if the people in the example have benefited - i.e., are winners - or have been harmed - i.e., are losers - by unexpected inflation. Third National, a bank that loaned many people money for home purchases

loser

This group, consisting of individuals who would like to work but have not looked for work during the past four weeks, is included among

marginally attached workers

can lead to stores listing prices in more stable currencies

menu costs

causes costs associated with changing prices in stores

menu costs

How frequently is the survey that determines unemployment released?

monthly

Determine whether each of the individuals is considered unemployed or not unemployed. James quit his job to stay at home with his children and has not worked in 15 years, nor has he looked for work.

not employed

Determine whether each of the individuals is considered unemployed or not unemployed. Laura works 20 hours in a paid position for her local animal shelter.

not employed

Determine whether each of the individuals is considered unemployed or not unemployed. Pete had a knee replacement two weeks ago and will not be available to work at his job as a mechanic for the next three months.

not employed

An increase in the number of company cars impacts

physical capital

An increase in the number of company computers affects

physical capital

When considering economic growth, many policy makers focus on real gross domestic product (GDP) per capita since it takes into account the potentially distorting effects of

population change

Determine if the people in the example have benefited - i.e., are winners - or have been harmed - i.e., are losers - by unexpected inflation. Joy, who borrowed $40,000 to pay for her college education

winner

Determine if the people in the example have benefited - i.e., are winners - or have been harmed - i.e., are losers - by unexpected inflation. The United States federal government, which had almost $15 trillion in debt in 2011

winner


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