Macro econ test 2 ch.9

Inflation is best described as a situation in which

the average of all prices are on a sustained rise over a period of time

If the rate of inflation is 5% and the real interest rate is 3%, the nominal interest rate should be

8%

Environmental regulation reduces the demand for Pennsylvania coal and the unemployment rate in Pennsylvania increases. This is an example of

structural unemployment

If the US econ enters a recession, the

unemployment rate tends to increase

Individuals who have stopped looking for work bc they are convinced that they will not find a job are considered

discouraged workers

last year you purchased 20 shirts at $15 a piece, 30 USBs at $12 each, and 5 sweaters at $25 each. this year you buy 20 shirts for $20 apiece, 30 USBS for 12 a piece, 5 sweaters at 20 apiece. If last year’s index was 100, this year’s index is

109.5

if an outdoor vendor loses her job when winter weather comes, this individual is

seasonally unemployed

cyclical unemployment occurs when

a downturn in economic activity decrease employment

the term “unemployment” is best described as the total number of

adult who are looking for work but have not found a job

a price index shows

the cost of today’s goods expressed in terms of the cost of goods in a base year

if a personal is fired for poor performance but possesses skills required to obtain another job after some searching, this person is considered

frictionally unemployment

cyclical unemployment is

a result of business recessions that occurs when AD is insufficient to create full employment

the rate of inflation and the purchasing power of money are

inversely related

the rate of unemployment is calculated as the number of

unemployed divided by the number of people in the civilian labor force

suppose that jason quits a job with Corp A in order to look fro more rewarding employment. Jason would be

counted as frictionally unemployed

an example of a cyclically unemployed individual is

Bonnie,who lost her job as a real estate agent when the housing market declined

an increase in the price of electricity, cetertis paribus indicates that

electricity is relatively more scarce than it was before

by definition, the labor force participation rate is

the percentage of nonintitutionalized working age individuals who are employed or seeking employment

the nominal value of a good is

the price of the good in today’s dollars

unemployment that is caused by business recessions is called

cyclical unemployment

if the current price of a market basket of goods is 600 and the base year price for the same market basket is 500, what is the value of the price index

120

a lifeguard who is out of work in the winter is

seasonally unemployed

many economists would argue that some frictional unemployment

cannot and probably should not be eliminated

which of the following best fits the definition of unemployed

not working but looking for a job

if a person loses her job bc of her abilities and skills are a poor match w/ current requirements of employers, this person is considered

structurally unemployed

bee’s assembly line job has been replaced by robots, and bee lacks abilities and skills required to attain other jobs. she is considered

Structurally unemployed

which of the following would not be considered unemployed

a newly retired worker

under which one of the following situations would you be better off

you borrow $10,000 at 3% to pay for this year’s college expenses and unanticipated inflation is 6% during the year

which one of is classified as structurally unemployed

Johnny lost his job at a Sears store, which had lost considerable business to online shopping services

a recent accounting grad from a major business school is searching for a place to begin his career as an accountant. this individual is

frictionally unemployed

assume the current price of market basket of goods is 5000 and the base year price of the same market basket is 4000. the current price index is

125

unanticipated positive inflation will create

losses for creditors and gains for debtors

who stands to gain as a result of unanticipated inflation

debtors

to be counted in the labor force

a person has to be at least 16 or older, have a job, or if unemployed has to be actively seeking unemployment

a sustained decrease in the average of all prices of goods and services in the economy is known as

deflation

the consumer price index (CPI) measures

level of prices with respect to goods and services purchased by a typical consumer in urban area

according to the bureau of labor stats, if you voluntarily leave your job to search for another job, then you

are classified as unemployed

the real rate of interest is the

nominal rate of interest - anticipated rate of inflation

last year the price of a dozen of eggs was 2, and this year the price is 2.60. which does not express this price change

if this year is the base year, the index number for last year would be 130

which of the following would be considered unemployed

Edna, who lost her job as a teacher and currently searching for a new job

Suppose you borrow $100,000 from a bank to purchase some land and you agree to pay 2% interest on the loan. If the loan must be repaid in 12 months and the inflation rate is 4% during the year then

you will repay the bank with dollars with less purchasing power than it initially loaned you

deflation is defined as a situation in which

the average of all prices of goods and services in an economy is falling

the total civilian labor force is comprised of

the unemployed and employed

the faster the drop in purchasing power of money, the faster the

increase of inflation rate

frictional unemployment will always exist since

some workers will always want to make a job transition