1. What are the three key macroeconomic variables?
2. What are the three macroeconomic objectives?
3. Define GDP? What it omits to avoid multiple counting? What does it fail to capture?
4. What are the three approaches to the measurement of GDP?
5. Differentiate between Real and nominal GDP.
6. What are CPI, PPI, GDP deflator?
7. What are the methods to measure the rate of inflation?
8. What is the application of the rate of inflation?
9. What are the weaknesses of CPI as a measure of the change in the cost of living over time?
10. Explain Purchasing power parity adjustment.
11. What is economic growth?
12. Define Rule of 70.
13. Labor Force: Define it. Who is included and who is excluded from the labor force?
14. What is the difference between the unemployment rate and labor force participation rate?
15. What are the different types of unemployment?
16. What is a natural unemployment rate?
17. What are the factors that cause natural unemployment?
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There are probably a thousand macroeconomic indicators, some measure the overall national economy, but some are more limited in scope. The three most often quoted and publicized are the Gross Domestic Production Index (GDP), the Consumer Price Inflation Index (CPI), and the Unemployment Index. Please complete the short answer questions regarding these three indicators:
A. Use the table below:
Table 6-1
Value (in billions) |
|
Personal consumption expenditures |
$1,000 |
Gross private domestic investment |
$500 |
Net exports |
$300 |
Imports |
$180 |
Government purchases of goods and services |
$280 |
Transfer Payments |
$90 |
a. What is the value of GDP?
b. In each of the following cases indicate if GDP is affected,+ under what category, and what happens to GDP. Be sure to explain why or why it is not included.
- You buy a used textbook from one of your classmates.
- You buy a new umbrella.
- Ella, a French tourist, has a haircut in a salon in San Francisco.
- Oklahoma cleans up after a devastating tornado.
- A pension payment to a retired military person.
B. Why do some people gain and other people lose from inflation and deflation?
C. Define the natural rate of unemployment. Identify three factors that may cause the natural rate to change over time.
D. What is structural unemployment? State the various reasons due to which it can arise in an economy.
Severe unemployment is socially catastrophic. Mark all items below that can occur due to unemployment.
Increased Spending |
Increased work hours for other family members |
Increased Savings |
Uninterrupted schooling |
Increased Stress |
Postponed medical care |
Utilities cut off |
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Question 51 pts
What years was the unemployment rate equal to or great than 10%?
1929-1933, 1937-1938, 1981-1982, 2007-2009 |
1928-1932, 1936-1937, 1980-1981, 2008-2010 |
1929-1933, 1936-1937, 1980-1981, 2007-2009 |
1928-1930, 1937-1938, 1981-1982, 2008-2010 |
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Question 61 pts
The unemployment rate is understated due to:
None of the above. |
Part-time workers being counted as unemployed |
Discouraged workers not counted in the labor force |
Underemployed workers being counted an unemployed |
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Question 71 pts
True or False. The Labor force participation rate is the percentage of adults in an economy who are either employed or who are unemployed and looking for a job.
True |
False |
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Question 81 pts
True or False. The Bureau of Labor Statistics reports the percentage of labor force unemployed utilizing the current population survey.
True |
False |
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Question 91 pts
Mark all that apply. Over time the unemployment rate.....
does not fluctuate over time |
an upward or downward trend in unemployment rates is apparent |
never falls all the way to zero |
the timing of rises and falls in unemployment do not match the timing of upswings and downswings in the overall economy |
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Question 101 pts
According to the graphs presented by the author in this chapter, which group had the highest unemployment rate in 2010?
Hispanic |
Black |
Asian |
Whites |
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Question 111 pts
According to the information presented by the author in this chapter, which group had the highest unemployment rate in 2015?
New entrants |
Re-entrants |
Job Losers: non-temporary |
Job Leavers |
Job Losers: temporary |
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Question 121 pts
According to the information presented by the author in this chapter, which group had the highest unemployment rate in 2015?
5 to 14 weeks |
Over 27 weeks |
15-26 weeks |
Under 5 weeks |
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Question 131 pts
True or False. An international comparison of unemployment rates across countries can be easily accomplished.
True |
False |
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Question 141 pts
Mark all that apply. Wages are sticky downward due to:
Implicit contract |
Insider-outsider model |
Efficiency Wage Theory |
Adverse selection of wage cuts argument |
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Question 151 pts
Match the word to the correct definition.
Cyclical
[ Choose ] unemployment that occurs as workers move between jobs unemployment that occurs because individuals lack skills valued by employers or the Geographic distribution of jobs changes unemployment closely tied to the business cycle, like higher unemployment during a recession
Frictional
[ Choose ] unemployment that occurs as workers move between jobs unemployment that occurs because individuals lack skills valued by employers or the Geographic distribution of jobs changes unemployment closely tied to the business cycle, like higher unemployment during a recession
Structural
[ Choose ] unemployment that occurs as workers move between jobs unemployment that occurs because individuals lack skills valued by employers or the Geographic distribution of jobs changes unemployment closely tied to the business cycle, like higher unemployment during a recession
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Question 161 pts
A financial analyst who quits his/her job in Chicago and is pursuing similar work in Arizona. What type of unemployment occurred?
Structural |
Cyclical |
Frictional |
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Question 171 pts
True or False. With productivity low, average levels of unemployment will tend to be somewhat higher on average.
True |
False |
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Question 181 pts
True or False. Unemployment benefits in the United States are only federally controlled.
True |
False |
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Question 191 pts
True or False. The natural rate of unemployment will never be zero due to cyclical and frictional unemployment.
True |
False |
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Question 201 pts
True or False. Public policies to assist the unemployed as it relates to the supply side of the labor market affect how eager people are to find work
True |
False |