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Choose the statement that is incorrect.

C. The CPI calculation assumes that everyone shops at discount stores and no one shops at convenience

Choose the statement that is incorrect.

C. The United States and Great Britain were the only countries who suffered the Great Depression

China's real GDP per person was​ 13,165 yuan in 2013 and​ 14,088 yuan in 2014.​ India's real GDP per person was​ 49,516 rupees in 2013 and​ 51,521 rupees in 2014. By maintaining their current growth​ rates, _______.

China will double its standard of living first

Choose the statement that is incorrect.

In the United States in​ 2009, 22 million fewer people had jobs than in 1989.

Choose the statement that is incorrect.

The unemployment rate was lower during the recession in 1982 than it was during the recession of​ 1990-1991.

Choose the statement that is incorrect.

The​ employment-to-population ratio fluctuates less than the labor force participation rate.

When the economy goes into​ recession, the output gap is​ _______.

negative

The labor force is the number of people employed plus the​ _____.

# unemployed

Over the past 100​ years, growth was most rapid during the​ ______ and slowest during the​ ______.

1960s; Great Depression

Over the past 100​ years, the average growth rate of U.S. real GDP per person is _ percent.

2

Suppose that in 2014​ China's real GDP is growing at 7 percent a year and its population is growing at 0.5 percent a year. If these growth rates​ continue, then​ China's real GDP per person in​ ______ will be twice what it is in 2014.

2025

Hyperinflation is an inflation rate of​ _____ or higher that grinds the economy to a halt and causes a society to collapse.

50 percent a month

The Population Survey in Blogsville for the past month is given in the​ table: In Blogsville last​ month, ______ million people were in the labor force and​ ______ million people were in the​ working-age population.

75​; 97

In 2013 and in​ 2014, consumers in Dexter consumed only books and pens. The prices and quantities for 2013 and 2014 are listed in the table. The reference base period for​ Dexter's CPI is​ 2013, and 2013 is also the year of the Consumer Expenditure Survey. The inflation rate in 2014 is​ ______ percent.

76

The real wage rate is​ $_____ when the money wage rate is​ $2,000 and the price level is​ $25.

80

In 2013 and in​ 2014, consumers in Dexter consumed only books and pens. The prices and quantities for 2013 and 2014 are listed in the table. The reference base period for​ Dexter's CPI is 2013 and 2013 is also the year of the Consumer Expenditure Survey. The CPI in 2014 is​ ______.

98.5

Choose the statement that is incorrect.

An unexpected inflation or deflation has no effect on the economy.

The Bureau of Labor Statistics reports six alternative measures of the unemployment rate. Choose the correct statements. a. Upper U dash 5 measures the job losers. b. Upper U dash 3 adds discouraged workers to the official unemployment rate. c. Upper U dash 1 measures those who are unemployed for 15 weeks or more. d. Upper U dash 3 is the official unemployment rate.

B and C

Choose the statement that is incorrect.

B. All unemployment at the natural unemployment rate is structural unemployment.

The natural unemployment rate​ ______.

B. fluctuates because the frictions and the amount of structural change fluctuate

Choose the statement that is incorrect.

D. The bias in the CPI eliminates the need for people to shop in discount stores

An economy is at full employment when​ ______.

D. the unemployment rate equals the natural unemployment rate

Who in the following statements is a discouraged worker​?

Dan is available to work but has not looked for a job in the past eight weeks because of repeated applications but no single offer.

Which of the following statements illustrates structural unemployment​?

Outsourcing resulted in many job losses in the mid 2000s.

Use the data reported by the Current Population Survey in July 2014 to answer the following question. 1. Who does the BLS classify as being​ unemployed, a​ part-time worker, an employed​ person, a discouraged​ worker, and not in the labor​ force? Explain your classification. ​______ are​ unemployed, ______ is a​ part-time worker,​ _____ is a discouraged​ worker, and​ _____ is not in the labor force. How will the labor force change if the following events​ occur? 1. Sarah starts a second job 2. Pat finds a good job and is hired. 3. Mary takes a job at​ McDonald's while she waits to start her new job. How will the unemployment rate change if Sarah quits and starts to search for a​ full-time job? The unemployment rate will​ _____ if Sarah quits and starts to search for a​ full-time job. How will the labor force participation rate change if Kevin starts creating football apps in his garage and they turn out to be very​ popular? The labor force participation will​ _____ Kevin starts creating football apps in his garage and they turn out to be very popular.

Pat and​ Mary; Sarah;​ Kevin; Johnie Events​ 1, 2, and 3 will not change the labor force. rise rise

Choose the statement that is incorrect.

Real GDP per person grows whenever real GDP grows.

Which of the following statements illustrates frictional unemployment​?

Robin is quitting his current job to find another that has better prospects.

Choose the correct statements. 1. The unemployment that arises from normal labor turnover is frictional unemployment. nothing 2. Students who leave school and look for a job are frictionally unemployed. nothing 3. Structural unemployment increases during a recession and decreases during an expansion. nothing 4. Frictional unemployment increases during a recession and decreases during an expansion. nothing

Statements 1 and 2 are correct.

Choose the statement about the Consumer Price Index that is incorrect. CPI​ = ______.

The CPI is defined to equal 1.00 for a period called the reference base period. ​(Cost of CPI basket at​ current-period prices divided by Cost of CPI basket at​ base-period ​prices) times 100

Choose the correct statement.

The inflation rate is the annual percentage change in the price level.

Choose the statement that is incorrect.

The unemployment rate includes all underutilized labor.

Choose the statement that is incorrect.

The unemployment rate is zero when the economy is at a business cycle peak.

The inflation rate in 2014 ​______.

might be​ higher, lower, or the same as in 2013

A person is in the labor force if any one of the following statements is true except that he or she is​ ______.

aged 16 and over and not in​ jail, hospital, or some other form of institutional care

In the United​ States, the CPI basket consists of items that​ ______ . ​______ has the greatest weight in the CPI basket.

an average urban household​ buys; Housing

The growth rate is the​ _____ of a variable​ - the change in the level expressed as a percentage of the initial level.

annual percentage change

The natural unemployment rate is the unemployment rate when the economy is​ _____.

at full employment

The price level is the​ _____.

average level of prices

The reference base period for the CPI is​ 1982-1984. In April ​2014, the CPI was 237.1. This number tells us that the​ ______ of the prices paid by urban consumers for a fixed basket of consumer goods and services was​ ______ .

average; 137.1 percent higher in April 2014 than the average of​ 1982-1984

Cyclical unemployment is the fluctuating unemployment over the business cycle that increases during​ _____ and decreases during​ _____.

a​ recession; an expansion

The four price indexes that are alternatives to the CPI are​ ______. The chained CPI​ ______.

chained​ CPI, personal consumption expenditure​ deflator, GDP​ deflator, and core PCE Your answer is correct.C. overcomes the sources of bias in the CPI by incorporating substitutions and using current and previous period quantities

an electrician who is laid off because of the economy is in a recession experiences ​______.

cyclical unemployment

In February 2017​, the U.S. unemployment rate LOADING... was 4.7 percent. In February 2018​, the unemployment rate was 4.1 percent. Assuming that the labor force remained constant between February 2017 and February 2018​, then unemployment​ _______.

dec

In March 2007​, the U.S. unemployment rate was 4.4 percent. In August 2008​, the unemployment rate was 6.1 percent. Assuming that unemployment remained constant between March 2007 and August 2008​, then the labor force​ ______._.

dec

Real GDP per person is real GDP​ _____.

divided by the population

The Rule of 70 is the number of years it takes for the level of any variable to double. It is approximately 70​ _____ by the annual percentage​ _____.

divided; growth rate of the variable

The unemployment that arises from normal labor turnover long dash from people entering and leaving the labor force long dash and from the ongoing creation and destruction of jobs is ​______ unemployment.

frictional

Read the news​ clip, then answer the following questions. The unemployment rate in May 2008 is​ ______ the estimated natural unemployment rate. This implies that real GDP is​ ______ potential GDP at this time.

greater​ than; less than

A discouraged worker​ ______. An increase in discouraged workers​ ______ the official unemployment rate and​ ______ U-4.

has stopped looking for a job because of repeated failure to find one ​decreases; does not change

The aggregate production function is the relationship that tells us​ ______, when all other influences on production remain the same.

how real GDP changes as the quantity of labor changes

In February 2017​, the U.S. unemployment rate LOADING... was 4.7 percent. In February 2018​, the unemployment rate was 4.1 percent. Assuming that unemployment was constant between February 2017 and February 2018​, then the labor force​ _______.

inc

In March 2007​, the U.S. unemployment rate was 4.4 percent. In August 2008​, the unemployment rate was 6.1 percent. Assuming that the labor force remained constant between March 2007 and August 2008​, then the number unemployed​ _______.

increased

When the unemployment rate​ ______ the natural unemployment​ rate, real GDP​ ______ potential GDP.

is greater than​; is less than

The natural unemployment rate​ _______.

is the unemployment rate at full employment

The unemployment rate is the percentage of the people in the​ _____ who are unemployed.

labor force

Read the news​ clip, then answer the following question. The unemployment rate in​ May, 2008 is​ ______.

lower than the unemployment rates that occurred in recessions since 1980 This is the correct answer.D.

Inflation​ ______ the real wage​ rate, everything else remaining the same. People are more likely to accept a real wage cut that arises from an increase in the price level than a cut in their nominal wage rate because​ ______.

lowers inflation decreases the real wage rate gradually and a cut in the nominal wage decreases the real wage rate suddenly

The unemployment rate is supposed to​ ______. It is an imperfect measure because​ ______.

measure underutilized​ labor; it does not include marginally attached workers and​ part-time workers who want​ full-time jobs

The main sources of bias in the CPI are​ ______. The bias in the CPI is a problem because​ ______ .

new goods​ bias, quality change​ bias, commodity substitution​ bias, and outlet substitution bias it distorts wage agreements linked to the CPI

The table shows three years of CPI data. The bias in these CPI numbers might arise from​ ______. Choose the statement that is incorrect.

new goods​ bias, quality change​ bias, commodity substitution​ bias, and outlet substitution bias The core PCE is a broader measure than the CPI that attempts to overcome biases by placing extra emphasis on food and​ fuel, two goods which are large components of household expenditure.

Read the news​ clip, then answer the following questions. If the only change that occurred was that all the newly hired people had been unemployed in​ October, then the labor force would​ ______ and unemployment would​ _______. If the only change that occurred was that people gave up job​ searching, then the labor force would ​ _______ and unemployment would​ _______.

not have​ changed; have decreased have​ decreased; have decreased

Which of the people described in the table is unemployed because of labor market​ mismatching?

only Tory and David

If the CPI rises from 120 to​ 126, then​ ______.

on​ average, the price paid by urban consumers for a fixed basket of consumer goods and services rises by 5 percent

China was the largest economy for centuries because everyone had the same type of economylong dashsubsistencelong dashand so the country with the most people would be economically biggest. Then the Industrial Revolution sent the West on a more prosperous path. Now the world is returning to a common​ economy, this time​ technology-and information-based, so once again population triumphs. China was the​ world's largest economy until 1890 because​ ______. In​ 1890, the United States surpassed China to become the​ world's largest economy because​ ______.

people in all countries had approximately the same subsistence level of income the benefits of the Industrial Revolution were greater in the United States than in China

Unemployment arises for all of the following reasons except​ ______. Some unemployment is unavoidable because​ ______.

people leave the labor force people are making transitions through the stages of life and businesses are making transitions

The output gap is real GDP minus​ _____ expressed as a percentage of​ _____.

potential​ GDP; potential GDP

The inflation rate is the percentage change in the​ _____ from one year to the next. Deflation is a situation in which the​ _____ is​ _____ and the inflation rate is​ _____.

price​ level; price​ level; falling; negative

The output gap is the gap between​ _______.

real GDP and potential GDP

The aggregate production function is a relationship that tells us how​ _____ changes as the quantity of​ _____ changes when all other influences on production remain the same.

real​ GDP; labor

Over the last several​ decades, the gap between real GDP per person in the United States and Canada ​______. The gap between real GDP per person in the United States and Africa ​______.

remained nearly constant or widened a small​ amount; widened

USe the data reported by the Current Population Survey in July 2014 to answer the following question. 3. How will the unemployment rate change if Sarah quits and starts to search for a​ full-time job? The unemployment rate will​ _____ if Sarah quits and starts to search for a​ full-time job. How will the labor force participation rate change if Kevin starts creating football apps in his garage and they turn out to be very​ popular? The labor force participation will​ _____ Kevin starts creating football apps in his garage and they turn out to be very popular.

rise rise

Read the news​ clip, then answer the following question. Growth rates over the past few decades indicate that gaps in real GDP per person around the world are​ ______.

shrinking between some countries and growing or staying the same between other countries

The core inflation rate is the annual percentage change in the​ _____ price index​ _____ the prices of food and energy.

​PCE; excluding

The region with the highest inflation rate in 2010 is​ ______. The region with the highest inflation rate in 2011 is​ ______. Describe the path of the price level in Japan. The price level​ ______.

the United​ States; the United States decreased in both years

Dress for Less Since​ 1998, the price of the Louis Vuitton​ "Speedy" handbag has more than​ doubled, to​ $685, while the price of Joe​ Boxer's "licky​ face" underwear has dropped by nearly​ half, to​ $8.99. As luxury fashion has become more​ expensive, mainstream apparel has become markedly less so. Clothing is one of the few categories in the CPI in which overall prices have declinedlong dashabout 10 percentlong dashsince 1998. Apparel comprises​ ______ percent of the CPI basket. Although luxury clothing prices have increased dramatically since the late​ 1990s, the clothing category of the CPI has actually declined by about 10 percent because​ ______.

the apparel component of the CPI is weighted more heavily toward​ moderately-priced clothing, and the price of​ moderately-priced clothing has decreased

The price level is​ ______.

the average level of​ prices, and the value of money

Choose the statement that is incorrect.

the congressional advisory commison on the cpi in 1996 said that the cpi overstates inflation

Economic growth is​ _______. Growth rates are calculated in a similar manner for all variables. Real GDP growth rate​ = [(Real GDP in​ ______ yearminusReal GDP in​ ______ ​year) divided by Real GDP in​ ______ year ​] times 100.

the expansion of production possibilities current; previous; previous

When cyclical unemployment increases and other things remain the​ same, ______.

the natural unemployment rate does not change

Read the news​ clip, then answer the following question. The unemployment rate tends to actually underestimate the unemployment​ problem, especially during a​ recession, because​ ______.

the number of marginally attached workers​ increases, but these workers are not included in the official unemployment rate

The CPI tells us​ ______.

the price level in a given period expressed as a percentage of the price level in the base​ period, which is by definition equal to 100

Read the news​ clip, then answer the following question. Choose the statement that is incorrect. If the labor market is working​ properly, there is still unemployment because​ ______.

there are always discouraged searchers

The CPI basket consists of items that __ households buy. The CPI places more weight on​ _______ than on​ _______.

transportation; medical care

If we count marginally attached workers as unemployed​ ______.

unemployment rate rises

An unemployed person​ ______.

wants​ work, has made specific efforts to find a job within the previous four​ weeks, or is waiting to be called back to a job from which he or she has been laid​ off, or is waiting to start a new job within 30 days

The labor force participation rate is the percentage of the​ _____ who are members of the labor force.

working age pop

If real GDP is​ $1,000,000, exports are​ $200,000, imports are​ $300,000, and aggregate labor hours are​ 100,000, labor productivity is​ _____.

​$10 per hour

The personal consumption expenditure deflator is calculated as​ _______.

​(Nominal C divided by Real C​) times 100

Once a​ month, the Bureau of​ ______ Statistics calculates the Consumer Price​ Index, which is a measure of the​ ______ consumers for a fixed basket of consumer goods and services.

​Labor; average of the prices paid by urban

A marginally attached worker is a person who does not have a​ job, is​ _____ and​ _____ to​ work, has​ _____ specific efforts to find a job within the previous​ _____ weeks, but has looked for work sometime in the recent past.

​available; willing; not​ made; four

The Consumer Price Index is a measure of the​ _____ of the prices paid by​ _____ consumers for a fixed market basket of consumption goods and services.

​average; urban

Full employment is when there is no​ _____ unemployment​ or, equivalently, when all the unemployment is​ _____ or​ _____.

​cyclical; frictional; structural

The Rule of 70 states that the number of years it takes for the level of any variable to​ ______ is approximately​ ______. If real GDP per person doubles in 20​ years, then the annual growth rate of real GDP per person is​ ______ percent a year.

​double; 70 divided by the annual percentage growth rate of the variable 3.5

The components of the CPI basket that are experiencing price increases faster than the​ 12-month average include​ ______. And those components that are experiencing price increases below the​ 12-month average include​ ______. The core CPI is the CPI excluding​ ______ prices. Core CPI is a useful measure because​ ______. Core CPI is a misleading measure because​ ______.

​energy, transportation and​ food; clothing food and fuel it smooths out​ short-term fluctuations that arise from the volatility in food and fuel​ prices; it does not include food and fuel prices price rises

Between 1960 and​ 2010, growth rates in real GDP per person in Hong​ Kong, Korea,​ Singapore, and China​ ______ the growth rate of real GDP in the United States. ​China's real GDP per person in 2010 is approximately equal to real GDP per person in Hong Kong in​ ______.

​exceeded; 1976

When the unemployment rate is less than the natural unemployment​ rate, real GDP is​ ______ than potential GDP and the output gap is​ ______.

​greater; positive

The ​working-age population is the total number of​ _____ aged​ _____ years and over who are not in​ jail, hospital, or some other form of institutional care or in the U.S. Armed Forces.

​people; 16

Read the news​ clip, then answer the following question. The 5 million workers who cannot find jobs because of mismatching in the labor market are counted as part of the​ economy's ______ unemployment because​ ______.

​structural; there is a mismatch between their skills and the skills required for the available jobs


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