Macro Mid-Term
If nominal GDP increases by 5 percent a year and the GDP price index rises by 2 percent a year, then real GDP increases by _______.
3 percent a year
The natural unemployment rate ______.
is the unemployment rate at full employment
The following statements about the business cycle are correct except ______.
it is a regular predictable cycle in real GDP around potential GDP
In the market for cell phones, which of the following events increases the supply of cell phones?
New technology that lowers the cost of making a cell phone
Gross domestic product is the market value of all the ______ in a given time period.
final goods and services produced by all firms located in the United States
Saving equals ______.
income minus consumption expenditure minus net taxes
The full-employment quantity of labor _______.
increases if labor becomes more productive
The natural unemployment rate _______.
increases if unemployment benefits become more generous
Job rationing _______.
increases the natural unemployment rate
A minimum wage set above the market equilibrium wage rate ______.
increases unemployment and decreases employment
The CPI bias arises from all of the following items except _______.
the goods and services bought by poor people
Households' labor supply decisions are influenced by all of the following except _______.
the number of full-time jobs available
The BLS counts Jody as being unemployed if she _______.
wants a job and is willing to take a job but after searching last week cannot find a job
U.S. potential GDP is the value of the goods and services produced in the United States _______.
when the U.S. economy is at full employment
When the price level is rising at _______ and the real interest rate is 1 percent a year, the nominal interest rate is 3 percent a year.
2 percent a year
Looking at some travel magazines, you read that the CPI in Uruguay in 2008 was 319 and in Russia, it was 224. You do some further investigating and discover that the reference base period in Uruguay is 2000 and in Russia it is 2001. The CPI in Russia in 2000 was 82. By what percentage did the CPI in Uruguay rise between 2000 and 2008? By what percentage did the CPI in Russia rise between 2000 and 2008. The CPI in Uruguay rose ______ percent between 2000 and 2008. The CPI in Russia rose ________ percent between 2000 and 2008.
219.0; 173.2
The BLS reported that in July 2009, the labor force was 154.5 million, employment was 140.0 million, and the working-age population was 235.9 million. The BLS also reported that 24 percent of all employment in July 2009 was part time and that 9.1 million people worked part time for economic reasons. How many people worked part time for noneconomic reasons?
24.5 million
An economy produces only two final goods: fish and berries. The table shows the quantities produced and the prices of these final goods in 2013 and 2014. The base year is 2013. In 2013 I: Fish Q: 110 P: $1 I: Berries Q: 40 P:$5 In 2014 I: Fish Q: 80 P: $5 I: Berries Q: 70 P:$9 By what percentage did real GDP change in 2014?
GDP change by 38.7%
The table shows some data for an economy. If the base year is 2013, calculate the economy's nominal GDP and real GDP in 2014. In 2013 I: Apples Q: 60 P: $0.50 I: Oranges Q: 80 P:$0.25 In 2014 I: Apples Q: 160 P: $1.00 I: Oranges Q: 220 P:$2.00
Nominal: $600 Real: $135
The table sets out the CPI for the United States and for four regions of the United States in May 2008 and May 2009. Region 2008 2009 Midwest 207 203 Northeast 230 228 West 221 218 South 210 207 United States 217 214 In May 2009, the price level was highest in the __________. Between May 2008 and May 2009, the price level in the ___________ fell by more than the U.S. average. The fall in consumer prices was the smallest in the ________.
Northeast Midwest and the South; Northeast
Of the alternative measures of the price level, _______ overcomes the bias of the CPI and is a better measure of the cost of living because it _______.
PCE price index; uses a current basket of all consumption goods
The Bureau of Labor Statistics reported that in July 2009, the labor force in Michigan was 4,864 thousand and employment was 4,134 thousand. Calculate the unemployment rate in Michigan in July 2009.
The employment rate in Michigan in July 2009 is 15%
When the economy goes into recession, the biggest increase in unemployment is _______.
cyclical because jobs are lost in many industries as they cut production
In the market for jeans, which of the following events increases the demand for a pair of jeans?
The price of a denim skirt (a substitute for jeans) rises.
U.S. potential GDP per worker per week is greater than that in Europe because _______.
U.S. workers are more productive per hour of work and they work longer hours than Europeans
The expenditure approach to measuring U.S. GDP equals ______.
all expenditure on final goods and services produced in the United States in a given time period
A ______ is a final good and ______ is an intermediate good.
tank of gasoline bought by you; jet fuel bought by Southwest Airlines
An efficiency wage results in all of the following situation except _______.
an increase in the full-employment quantity of labor
Other things remaining the same, a rise in the price of a good will ______.
decrease the quantity demanded of that good
Other things remaining the same, a fall in the price of peanuts will ________.
decrease the quantity supplied of peanuts
When the CPI increases from 200 in 2010 to 210 in 2011 and the nominal wage rate is constant at $10 an hour, the real wage rate _______.
decreases by 5 percent
Real GDP ______.
does not accurately measure leisure time, environment quality, or political freedom and social justice
A marginally attached worker is a person who _______.
doesn't work, is available and willing to work, but hasn't looked for a job recently
When the unemployment rate_______ the natural unemployment rate, real GDP is _______ potential GDP and the output gap is ________.
exceeds; below; negative
The demand for a good decreases by 10 percent and the supply of the good decreases by 8 percent. The price of the good _______ because _______.
falls; demand decreases by more than supply decreases and when demand decreases the price falls
Europeans could be induced to work the same hours as Americans by _______ taxes and _______ unemployment benefits.
lowering; lowering
Real GDP per person is not an accurate measure of the standard of living because it ______.
omits the goods and services that people produce for themselves
When the price level _______ the inflation rate _______.
rises rapidly; is high
When floods wiped out the banana crop in Central America, the equilibrium price of bananas ______ and the equilibrium quantity of bananas ______.
rose; decreased
A rent ceiling creates a ______ of housing if it ______ the equilibrium rent.
shortage; is less than
The economy is at full employment when all unemployment is _______.
structural and frictional
During 1994, Brazil experienced severe frosts, which wiped out many coffee plantations. New plantations in Brazil began to produce coffee beans in 1999. During the early 2000s, countries such as Vietnam started to produce coffee beans and coffee shops such as Starbucks started to spring up across Europe. Use these events to explain why the price rose during the late 1990s, fell during the early 2000s, and rose again after 2003. The price rose during the late 1990s because the ______. The price fell during the early 2000s because the ______. The price rose again after 2003 because the ______.
supply of coffee decreased; supply of coffee increased; demand for coffee increased
The BLS reported that the CPI in July 2010 was 226. This news tells you that _______.
the prices of consumption goods and services have risen, on average, by 126 percent since the base year
The demand for labor curve shows the relationship between _______.
the quantity of labor businesses are willing to hire and the real wage rate
The supply of labor is the relationship between _______.
the real wage rate and the quantity of labor supplied
Potential GDP is the value of real GDP when _______.
the unemployment rate equals the natural unemployment rate
If the BLS included all marginally attached workers as being unemployed, the _______ would be _______.
unemployment rate; higher
The CPI measures the average prices paid by _______ for _______.
urban consumers; a fixed basket of consumption goods and services
A decrease in the demand for chocolate with no change in the supply of chocolate will create a ______ of chocolate at today's price, but gradually the price will ______.
surplus; fall