ugba 101b chap 1-2

For any year t, let $YtYt​ denote nominal GDP and YtYt​ denote real GDP. The GDP deflator, denoted by PtPt​, can be expressed as

$Yt/YtYt​/Yt​

Which of the following prices will be used when calculating the rate of growth of real US GDP between the year's 2022 and 2023 using the chain method?

. the average of prices in 2022 and 2023

If in year t nominal GDP is $7,200 and real GDP is $6,200, the GDP deflator is ____. (Round your response to two decimal places. Do not multiply by 100)

1.16

Forecasts show that the earth's temp will increase by another--- degrees celsius by the end of the century id we elect to the nothing to stop global warming

3

Suppose a country using the United States' system of calculating official unemployment statistics has 100 million people, of whom 50 million are working age. Of these 50 million, 20 million have jobs. Of the remainder: 10 million are actively searching for jobs; 10 million would like jobs but are not searching; and 10 million do not want jobs at all. Refer to the information above. The official unemployment rate in percentage points is:

33% Explanation: This correctly calculates the unemployment rate based on the working-age population actively looking for work. 10/(10+20) = 33%

In 2021, the top 10% of U.S. wage earners received ____ of total pretax income.

45%

If the GDP deflator in the prior year 1.10, the inflation rate for year t is ____ %. (Round your response to one decimal place.)

5.5

From 1960 to 2019 China's growth rate has averaged ____ per year.

5.6%

Labor income's share in an advanced country is likely to be about

70%.

Suppose you are provided with the following data for your country for a particular month: 200 million people are working, 20 million are not working but are looking for work, and 40 million are not working and have given up looking for work. Your country uses the same standards for calculating unemployment as the US. The official unemployment rate for that month is ____

9.1%

In which year, a year where output growth is 2% or a year where output growth is − 2%, will the unemployment rate rise more?

A year with output growth of -2% will see a higher rise in the unemployment rate because negative growth in output means firms will need fewer workers, which will cause unemployment to rise.

Okun's law stated that when output growth is higher than usual, the unemployment rate tends to fall. Explain why usual output growth is positive.

A. Output is dependent on the overall size of all factors of production (inputs), and an economy's inputs generally increase over time.Choice 2 of 4:B. Overall output is a function of population (labor) and capital in an economy.Choice 3 of 4:C. Output growth is positively related to population as population grows, overall output can increase.Choice 4 of 4:D. All of the above are correct.

One if the reasons macroeconomists have concerns about inflation is that inflation causes

A. wages to rise as fast as prices.Choice 2 of 5:B. real GDP to exceed nominal GDP.Choice 3 of 5:C. nominal GDP to fall.Choice 4 of 5:D. real GDP to rise.Choice 5 of 5:E. none of the above.

Which of the following represents real GDP?

Choice 1 of 4:A. GDP in constant dollarsChoice 2 of 4:B. GDP in base year dollarsChoice 3 of 4:C. GDP in terms of goodsChoice 4 of 4:D. all of above

If the Japanese CPI index is currently 108 and the U.S. CPI index is 104, the Japanese rate of inflation is higher than the U.S. rate of inflation.

False

The Phillips curve is a relation between the level of prices and the level of unemployment.

False

When the economy is functioning normally, the unemployment rate is zero.

False

When the unemployment rate is high, the participation rate is high.

False

An exploration of the factors underlying an economy's capital stock and its level of technology indicates that the relevant time frame is the _ (1) run.

Long Correct. The capital stock and technology factors are generally considered in the long run

The Phillips curve is often portrayed as a line with a negative slope. In the text, the slope is about − 0.17. Is this a "better" economy than one that has a Phillips curve with a large slope, say − 0.5 or a smaller slope, say -0.1?

No, the slope does not indicate whether one economy is better than another; it simply shows how much inflation rises or falls given a change in the unemployment rate.

Which if the following data types do economists generally use to compare GDP across countries?

Purchasing power parity (PPP) numbers

In the United States, which of these persons would be classified as unemployed?

Someone who does not have a job, has recently looked for work, and is collecting unemployment insurance.

Which of these statements is the most accurate wi8th respect to global warming?

There is overwhelming evidence that shows that global warming does exist.

Okun's law shows that when output growth is lower than normal, the unemployment rate tends to rise.

True

Periods of negative GDP growth are called recessions.

True

The rate of unemployment tends to fall during expansions and rise during recessions.

True

The rate of inflation computed using the CPI is a better index of inflation than the rate of inflation computed using the GDP deflator.

Uncertain

The Phillips curve is a relation between the inflation rate and the level of the unemployment rate. Using the Phillips curve, what will happen to the unemployment rate when the rate of inflation is 2%?

Unemployment never falls to zero, as there is always some level of frictional or structural unemployment. C. It will be about 5.5%

Today, the United States and many other nations calculate real GDP using a chained methodology. This is, in part, to remedy a major disadvantage of the old method, which involved using a base year for prices that was changed every five years or so. What was a major disadvantage of using the old method (chose all that apply)

When the base year changed, all of the old measures of real GDP had to be recalculated. The old methodology tended to underweight the real growth of industries growing above average and overweight those growing below average

Which of the following statements about capital income is NOT correct?

Yt (Correct) Explanation: The textbook refers to real GDP using this notation

During the mid 1980s, we observed a significant reduction in oil prices. In the United States, we would expect that this reduction in oil prices would cause

a larger reduction in the CPI compared to the GDP deflator

Which of the following tends to occur when the unemployment rate increases?

a reduction in the labor force participation rate

What was the initial response of most central banks to the Covid-19 pandemic and subsequent lockdowns of most nation's economies?

central banks reduced interes rates to near zero

Overall, inequality acress countries has ____ over the past 40 years.

decreased

Politicians are nery shortsighted and prefer to run deficits rather than increase taxes. This is known as ____

deficit bias

Changes in GDP in the short run are caused primarily by:

demand factors

Suppose nominal GDP increased in a given year. Based on this information, we know with certainty that:

either real output or the price level (GDP deflator) have increased

Prices for which of the following are included in the GDP deflator, but not included in the Consumer Price Index?

firms' purchases of new equipment

The prices for which of the following goods are included in both the GDP deflator and the consumer price index?

goods bought by households.

Since 1960 inequality in the united states has ___.

increased

The Phillips curve describes the relationship between

inflation and unemployment.

A firm's value added in any period equals:

its revenue minus its cost of intermediate goods in that period.

When using the income approach to measure GDP, the largest share of GDP generally consistis of:

labor income

Factors that one might explore to understand the pace at which a country's capital stock and its level of technology are advancing include the (Check all that apply.)

quality of its education system. (Correct) Explanation: A strong education system fosters innovation and helps develop a skilled workforce, which is crucial for role of the government. (Correct) Explanation: Government policies, such as investment in infrastructure and R&D, play a significant role in advancing capital stock and technology. saving rate. (Correct) Explanation: A higher saving rate provides more resources for investment in capital stock and technological improvements.

Economists care about unemployment because it (Check all that apply.)

signifies the inefficient use of human resources. inflicts suffering on those who are unable to find work.

Changes in GDP in the medium run are determined primarily by:

supply factors

During the late 1990s, Japan experienced reductions in the GDP deflator. Given this information, we know with certainty that

the overall price level in Japan decreased during these periods

Hedonic pricing is

the process of adjusting the price of a good for changes in its quality.

The GDP deflator provides a measure of which of the following?

the ratio of nominal GDP to real GDP.

The labor force in the United States is defined as

the sum of individuals who are employed and those who are officially unemployed.

Using official data, U.S. GDP was 47 times higher in 2022 than it was in 1960

true