ECON 102 Chapter Notes - Chapter 32: Nominal Rigidity, Marginal Product, Structural Unemployment

1.Assume that there was a 10 per cent increase in the price of all goods in 2010; if the base year is 2009, then the price index in 2010 will be Select one:

a. 1100. b. 200. c. 90. d. 110.

2.The value of your money income, in terms of buying goods and services, is referred to like your money's

a. transaction cost.

b. rigidity factor.

c. staying power.

d. purchasing power.

3. Unemployment that is caused by business recessions is called

a. frictional unemployment.

b. seasonal unemployment.

c. structural unemployment.

d. cyclical unemployment.

4.All of the following are examples of a flow EXCEPT

a. the current unemployment rate.

b. a person who is fired from a job.

c. an individual who voluntarily leaves the labour force.

d. a new entrant into the labour force.

5.Which one of these factors plays a role in determining the extent and duration of frictional unemployment?

a. the ease with which job seekers can obtain information about job openings

b. the degree to which the overall level of business activity fluctuates up and down

c. the extent to which government legislation requires firms to provide health insurance for employees

d. the education and skill levels of labour force participants

6.Since 1950, the labour force participation rate in the United States

a. of men and women both decreased.

b. of men decreased and for women increased.

c. of men increased and women decreased.

d. of men and women both increased.

7.Increases in the duration of unemployment may

a. reflect a general downturn in economic activity that depresses job openings.

b. increase the unemployment rate.

c. All of these.

d. increase the number of discouraged workers.

8. A discouraged worker is someone who

a. is unemployed.

b. has been fired.

c. is not in the labour force.

d. is employed.

9.In the United States, the wage floor legislated by the government below which it is generally illegal to pay workers is known as

a. the going wage.

b. the employment gap.

c. the minimum wage.

d. the wage ceiling.

10. Which of the following is an effect of a minimum wage law that establishes a ceiling wage below the current market-clearing wage?

a. Surplus labour, or unemployment

b. A decrease in the market-clearing wage

c. A decrease in the quantity of labour supplied

d. An increase in the quantity of labour supplied

11. Which group of individuals most likely benefits from rent controls?

a. low-income wage earners who fail to obtain rental housing

b. the unemployed who fail to obtain rental housing

c. single-parent families without savings or other financial assets who fail to obtain rental housing

d. upper-income professionals who rent apartments at the price ceiling rate

Ch 7

2) Suppose that the U.S. noninstitutional adult population is 230 million and the labor force participation rate is 67 percent.

a. What would be the size of the U.S. labor force?

b. If 85 million adults are not working, what is the unemployment rate?

3) Determine whether each of the following would be considered frictional, structural, seasonal, or cyclical unemployment:

a. A UPS employee who was hired for the Christmas season is laid off after Christmas

b. A worker is laid off due to reduced aggregate demand in the economy.

c. A worker in a DVD rental store becomes unemployed as video-on-demand cable service becomes more popular.

d. A new college graduate is looking for employment.

5) When the economy is at full employment, is the unemployment rate at zero percent? Why or why not? How would a more generous unemployment insurance system affect the full employment figure?

7) Here are some recent data on the U.S. consumer price index:

YEAR CPI YEAR CPI YEAR CPI

1992 140.3 1999 166.6 2006 201.6

1993 144.5 2000 172.2 2007 207.3

1994 148.2 2001 177.1 2008 215.3

1995 152.4 2002 179.9 2009 214.5

1996 156.9 2003 184.0 2010 218.1

1997 160.5 2004 188.9 2011 224.9

1998 163.0 2005 195.3 2012 229.6

Compute the inflation rate for each year 1993 – 2012 and determine which were years of inflation. In which years did deflation occur? In which years did disinflation occur? Was there hyperinflation in any year?

Ch 8

1) How do we measure labor productivity? How do changes in labor productivity affect the U.S. standard of living?

5) Supposed that two nation start out in 2013 with identical levels of output per work hour – say, $100 per hour. In the first nation, labor productivity grows by 1 percent per year. In the second, it grows by 2 percent per year. Use a calculate or spreadsheet to determine how much output per hour each nation will be producing 20 years later, assuming that labor productivity growth rates do not change. The, determine how much each will be producing per hour 100 years later. What do your results tell you about the effect of small differences in productivity growth rates?

7) What are some examples, other than those given in the chapter of technological change that has caused unemployment? And what are some examples of new technologies that have created jobs? How do you think you might measure the net impact of technological change on overall employment and GDP in the United States?

Ch 7

2) Suppose that the U.S. noninstitutional adult population is 230 million and the labor force participation rate is 67 percent.

a. What would be the size of the U.S. labor force?

b. If 85 million adults are not working, what is the unemployment rate?

3) Determine whether each of the following would be considered frictional, structural, seasonal, or cyclical unemployment:

a. A UPS employee who was hired for the Christmas season is laid off after Christmas

b. A worker is laid off due to reduced aggregate demand in the economy.

c. A worker in a DVD rental store becomes unemployed as video-on-demand cable service becomes more popular.

d. A new college graduate is looking for employment.

5) When the economy is at full employment, is the unemployment rate at zero percent? Why or why not? How would a more generous unemployment insurance system affect the full employment figure?

7) Here are some recent data on the U.S. consumer price index:

YEAR CPI YEAR CPI YEAR CPI

1992 140.3 1999 166.6 2006 201.6

1993 144.5 2000 172.2 2007 207.3

1994 148.2 2001 177.1 2008 215.3

1995 152.4 2002 179.9 2009 214.5

1996 156.9 2003 184.0 2010 218.1

1997 160.5 2004 188.9 2011 224.9

1998 163.0 2005 195.3 2012 229.6

Compute the inflation rate for each year 1993 – 2012 and determine which were years of inflation. In which years did deflation occur? In which years did disinflation occur? Was there hyperinflation in any year?

Ch 8

1) How do we measure labor productivity? How do changes in labor productivity affect the U.S. standard of living?

5) Supposed that two nation start out in 2013 with identical levels of output per work hour – say, $100 per hour. In the first nation, labor productivity grows by 1 percent per year. In the second, it grows by 2 percent per year. Use a calculate or spreadsheet to determine how much output per hour each nation will be producing 20 years later, assuming that labor productivity growth rates do not change. The, determine how much each will be producing per hour 100 years later. What do your results tell you about the effect of small differences in productivity growth rates?

7) What are some examples, other than those given in the chapter of technological change that has caused unemployment? And what are some examples of new technologies that have created jobs? How do you think you might measure the net impact of technological change on overall employment and GDP in the United States?

Severe unemployment is socially catastrophic. Mark all items below that can occur due to unemployment.

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Question 51 pts

What years was the unemployment rate equal to or great than 10%?

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Question 61 pts

The unemployment rate is understated due to:

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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.

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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.

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Question 91 pts

Mark all that apply. Over time the unemployment rate.....

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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?

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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?

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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?

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Question 131 pts

True or False. An international comparison of unemployment rates across countries can be easily accomplished.

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Question 141 pts

Mark all that apply. Wages are sticky downward due to:

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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?

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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.

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Question 181 pts

True or False. Unemployment benefits in the United States are only federally controlled.

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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.

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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