Econ final
If the CPI this year is 240 and the CPI in the previous year was 200, what is the annual inflation rate?
20%
Part-time workers are defined as people who are working
less than 35 hours per week.
The Classical macroeconomic model proposes that
markets work efficiently to produce the best macroeconomic outcomes.
The inflation rate measures the
percentage change in the CPI from one year to the next year.
Structural unemployment is the result of
technology changes or foreign competition.
The CPI market basket
weights the goods and services according to the budget of an average urban household.
The items included in the CPI are
goods and services consumed by the typical urban household.
For the CPI to provide an accurate measure of the prices paid by urban consumers, it is necessary to
have a market basket that is consistent and corresponds to what households actually purchase.
Looking at the historical values for annual inflation in the United States as measured by the Consumer Price Index, it is clear that inflation was
higher on average during the 1970s than during the 1980s.
Which of the following ideas reflect the Monetarist macroeconomic model? i)The Monetarist model supports the Classical model, in general. ii)Decreases in the growth rate of the quantity of money trigger recessions. iii)Government intervention is an appropriate tool to steady the economy.
i and ii
Economists agree that the CPI
is a possibly biased measure of the cost of living.
When the labor market is in equilibrium, real GDP ________ potential GDP.
is equal to
The shape of the productivity curve reflects the
law of diminishing marginal returns.
The CPI overstates inflation because the average consumer buys
less of those goods whose relative price has risen.
The real interest rate equals the
nominal interest rate minus the inflation rate.
The level of real GDP the economy produces at full employment is
potential GDP.
The ________ describes the relationship between the amount of labor employed and real GDP.
production function
If the real wage rate decreases from $14.00 per hour to $13.00 per hour, the
quantity demanded of labor increases.
The supply of labor is defined as the relationship between the real wage rate and the
quantity of labor supplied by households.
Labor productivity is defined as
real GDP per hour of labor.
Which of the following lists gives factors that increase labor productivity?
saving and investment in physical capital, expansion of human capital, and discovery of new technologies
A marginally attached worker is
someone who does not have a job but is available and willing to work but has not made specific efforts to find a job during the past 4 weeks.
The Keynesian macroeconomic model states that
the economy is inherently unstable and government intervention is required to maintain continued economic growth.
The unemployment rate at full employment is
the natural unemployment rate.
Frictional unemployment is the result of
the normal process of jobs being created and destroyed.
The labor market is in equilibrium whenever
the quantity of labor demanded equals the quantity of labor supplied.
If a private wage contract is agreed upon with a cost of living adjustment such that wage hikes are equal to increases in the CPI,
workers benefit because the CPI increases more rapidly than does the cost of living.
If the GDP price index is 137, this value means that prices have increased
37 percent since the base year
If the cost of the CPI market basket at current period prices is $1000 and the cost of the CPI market basket at base period prices is $250, the CPI is
400
Suppose a report from the Bureau of Labor Statistics states that the CPI for the year 2012 was 152. What is the percentage point increase in the prices of the goods and services since the reference base period?
52%
The quantity of labor demanded is the labor hours all
firms plan to hire at a given real wage rate.
If real GDP is $6,460 billion, the population is 184.6 million people, and aggregate hours is 170 billion hours, labor productivity is
$38.00 an hour.
The formula for the CPI is
(Cost of CPI market basket at current period prices ÷ Cost of CPI market basket at base period prices) × 100.
If real GDP was $13.1 trillion in 2013 and $13.3 in 2014, what is the growth rate?
1.5%
The value of the CPI for the reference base period is always
100
The inflation rate between last year and this year was 14 percent. The CPI was 118 this year. What was the CPI last year?
103.5
Suppose in year 1 the CPI is 90, in year 2 the CPI is 100, and in year 3 the CPI is 110. Then, inflation is
11 percent between years 1 and 2.
The reference base period that the BLS uses to measure the CPI is
1982-1984
Over the past 110 years, real GDP per person in the United States has grown at an average rate of about ________ per year.
2%
The highest unemployment rate in U.S. history was about
25 percent in 1933.
Economic growth is defined as
A sustained expansion of production possibilities.
Janae was fired from her job with Microsoft in the 2008-09 recession because Microsoft's sales dipped. Janae's unemployment would be best classified as
cyclical unemployment.
The production function displays
Diminishing returns
Involuntary part-time workers are not working more hours due to
Economic reasons
During an expansion, the unemployment rate generally
Falls
If real GDP grows at a faster rate than does population, then the standard of living, as measured by
Improves
According to the Rule of 70, if a country grows at 2.0 percent per year instead of 1.5 percent per year, how many fewer years will it take to double its level of real GDP?
It will take 11.6 years fewer.
The CPI is calculated by the Bureau of Labor Statistics on a frequency of every
Month
The CPI is a measure of the
average prices paid by consumers for a fixed basket of goods and services.
Cyclical unemployment includes people who become unemployed from
changes in the business cycle
In constructing the CPI, the BLS has to deal with commodity substitution bias, which is defined as
consumers' substitution of cheaper goods for goods whose prices increase.
8) People who are willing and able to work but are not looking for work because they have been discouraged by their previous futile efforts are called
discouraged workers.
In the Current Population Survey, a person is considered unemployed if the person
does not have a job and is actively looking for a job
In calculating the unemployment rate, part-time workers over the age of 16 are counted as
employed
Unemployment benefits in western Europe are more generous than in the United States. As a result, ________ in the United States.
frictional unemployment is lower
Jordan recently quit her job as a marketing consultant in Washington, D.C. and is looking for a better-paying job with an advertising agency in New York. Jordan is considered to be
frictionally unemployed.
Increases in human capital can come
from formal education and on-the-job learning.
Since 1980, the percentage of part-time workers who are part time for economic reasons
generally increased in recessions and decreased in expansions.
Which of the following makes the Consumer Price Index a less accurate measure of the cost of living? i.The monthly price survey conducted to collect information about prices is very unreliable. ii.The existence of a new goods bias in the calculation of the CPI iii.The existence of a quality change bias in the calculation of the CPI
ii and iii
Which of the following statements about the CPI is (are) correct? iThe only significant bias in the CPI is the commodity substitution bias. ii.The CPI probably overstates inflation by 1.1 percentage points a year. iii.As far as the bias in the CPI is concerned, the new goods bias and the outlet substitution biases are irrelevant.
ii only
Since 1960, the labor force participation rate in the United States has
increased for women and decreased for men.
Phillip is a 22-year old who has no job and is available for work, but has not actively looked for a job in the last month. The Current Population Survey identifies Phillip as ________ , ________ the labor force, and ________ the working-age population.
not unemployed; not part of; part of
The labor force is the
number of employed people plus the number of unemployed people.
The Rule of 70, as applied to real GDP growth, can be used to find the
number of years it takes for the level of real GDP to double.
To measure the change in the standard of living, it is best to use the growth rate
of real GDP per person.
After 15 years with Ford Motor Corporation, one summer Cameron loses his job. His boss explained that his position has been downsized after the technological advances in automobile production. Cameron is best considered
structurally unemployed.
