Econ202
structural unemployment is the result of
technological change or foreign competition
full employment occurs when
the cyclical unemployment rate is zero
investment is defined as the purchase of
the purchase of new capital goods and additions to inventories
when economists speak of the CPI bias, they are referring to
the tendency for the CPI to overstate price changes
consumption expenditure includes spending
by households
frictional unemployment is the result of
normal labor market turnover
if the CPI is 231.4 in one year and is 241.2 in the next year, then the inflation rate equals
(241.2 - 231.4) / 231.4 x 100
The labor force participation rate is equal to
(labor force / working-age population) x 100
suppose the population is 300 million people, the labor force is 200 million, the number of people employed is 185 million, and the working-age population is 170 million people. what is the unemployment rate?
7.5 percent
if 160 million people are employed, 15 million people are unemployed, and the population is 280 million people; the unemployment rate is
8.6 percent
the type of unemployment that arises from a decrease in real GDP is called
Cyclical unemployment
Which of the following is true?
To be classified as employed, you must work at lwast 1 hour per week at a paid job or 15 hours or more as unpaid workers in your family business
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
if the number of people in the labor force_______, then____________
increases, the labor force participation rate increases
after calculating net domestic product at foactor cost, to calculate GDP using the income approach, in part we must add
indirect taxes and depreciation
most unemploye workers are
job losers
which of the following are sources of unemplyment
job losers, job leavers, and entrants and reentrants
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 employed, not part of, part of
the labor force is the
number of employed people plus the number of unemployedd people.
if a significant number of part-time workers successfully find full-time employment, then
the unemployment rate will remain unchanged
the income approach to measuring GDP is based on summing
wages, interest, rent, and profits
the value of the CPI for the reference base period is always
100
the CPI was 170 last year and is 190 this year. What is the inflation rate between these two years?
11.8 percent
assume the us population is 300 million. If 200 million people are of working age, 125 million are employed, and 15 million are unemployed, what is the size of the labor force.
140 million
the reference base period that the BLS uses to measure the CPI is
1982-1984
in 2010, the reference based period for the CPI for the nation of Webot, a typical consumer spent $30 on potatoes and $150 on steak. If the price of steak is $15 and the price of potatoes is $1 then there are ____ units of steak and ______ units of potatoes in the CPI market basket
10 units of steak and 30 units of potatoes
gross domestic product equals
Y= C + I + G + NX
Suppose a 23 year old graduate student is looking for a full-time job, but has to take a part-time job instead. He or she will be categorized in the current population survey as __________ when calculating the unemployment rate.
a discouraged worker
the working age population consists of all the people in the population
aged 16 and over who are not in jail, hospital, or an institution or in the us armed forces
a restaurant buys fish to offer as a daily menu special. The pruchase of the fish by the restaurant is
an intermediate good
suppose higher prices lead consumers to switch from shopping at abercrombie & fitch to shopping at Wal-Mart. If the CPI does not reflect this change, it is referred to as
an outlet substitution bias
the labor force includes people who
are actively seeking a job but do not have a job
the value of used goods _________ counted as part of GDP ___________.
are not; because they were counted during the period when they were counted as new goods
how are final goods and services valued when measuring nominal GDP
at current market prices
total expenditure equals total income
because firms pay out everything they receive as income to the factors of production
which of the following is included in Germany's GDP
china produced by the English owned Wedgewood Company at a factory in Berlin, Germany
the formula for the CPI is
cost of CPI market basket at current period prices / cost of CPI market basket at base period prices) x 100
who is cyclically unemployed
david, a new car salesman who lost his job because the economy went into a recession
for the CPI, the market basket of goods and services is modified
each time the Consumer Expenditures Survey is conducted
The working age population includes
employed and unemployed people over the age of 16
the total production within an economy is measured as
gross domestic product
when measuring GDP by the income approach, wage income includes
health-care insurance paid for by the firm for its employees, social security contributions made by the firm, and wages paid during a worker's vacation time
what is the good or service is given the most weight in the CPI
housing
because a third government outlays are linked directly to the CPI, as time passes the CPI bias means that the government's outlays are
larger than needed to keep pace with the cost of living
the more money an average household spends on one specific type of good or service per month, the
larger the relative importance of that item in the CPI market basket
the CPI overstates inflation because the average consumer buys
less of those goods whose relative price has risen
gross domestic product measures the
market value of the final goods and services produced in a given year within a country
when the economy is at full employment, the
natural unemployment rate equals the unemployment rate
adding wages, interest, rent, and profits yields
net domestic product at factor cost
which of the following expenditure components of GDP can be negative or positive
net exports of goods and services
which of the following is a bias in the CPI
new goods bias and commodity substitution bias
the real interest rate equals the
nominal interest rate - inflation rate
the difference between nominal and real is
nominal is measured in current dollars and real is measured in dollars of a given year
if jose is 22 years old, is available to work but does not have a job and made no specific efforts to find a job for the previous month, Jose is classified in the current population survey as
not in the labor force
the unemployment rate equals 100 multiplied by the
number of people unemployed divided by the labor force
if you make dinner for yourself
only the market value of ingredients that you purchased this year is added to GDP
the unemployment rate measures the percentage of
people in the labor force who can't find a job
The consumber price index(CPI) measures the changes of
prices paid by consumers for a fixed market basket of consumer goods and services
To find the cost of the CPI market basket inthe current period we have to multiply the
quantities in the CPI market basket by the current period prices
which of the following is NOT a source of bias in the CPI
quantity change bias
to find the cost of the CPI market basket in the base period prices we have to multiply the
quintities in the CPI market basket by the base period prices
for twenty years, Jim was a customer service representation at a call center in Minnesota. In order to save money, his form moved the call center to India and laid off Jim two years ago. Jim has been unable to find a similar job anywhere. Jim's unemployment is best classified as
structural
if the price of a soda was 15 cents in 1970, when the CPI was 50, and 50 cents in 2007 when the CPI was 172, then the real price of
the 1970 soda in 2007 dollars is 52 cents
in 1998, Pablo earned $200 per week at his job. In 2008, Pablo earned $240 per week. If the CPI in 1998 was 100 and the CPI in 2008 was 152, then
the 2008 wage measured in 1998 dollars is $157.89
the consumer price index market basket contains
the goods and services pruchasedc by an average urban household
when the value of nominal GDP increases from one year to the next, we know that one or two things must have happened during that time
the nation produced more goods and services and/or prices rose for goods and services
if the CPI is 170 at the beginning of the year and 181 at the end, and a bank is paying a nominal interest rate of 6 percent, we see that
the real interest rate is negative
in 2009, real GDP in the US was below potential GDP. This fact definitely meaqns that
the unemployment rate was above the natural unemployment rate
to calculate GDP it is necessary to
use the market price to place adollar value on each good produced.
net exports of goods and services are defined as the
value of exports minus the value of imports
which of the following is true regarding the measurement of GDP
wages and profit income are used in the income approach to GDP
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 reapidly than does the cost of living
discouraged workers
would increase unemployment rate if they were added to the number of unemployed workers
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
