When studying changes in the economy over time, economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services. In other words, economists want to study
a. nominal GDP .
b. real GDP .
c. the GDP deflator
If in some year nominal GDP was $20 billion and the GDP deflator was 50, what was real GDP ? a. $2.5 billion
b. $10 billion
c. $40 billion
d. $100 billion
Recessions are not associated with which of the following?
For purposes of calculating the CPI, the transportation category of consumer spending includes the cost of
both subways and gasoline.
neither subways nor gasoline.
Categories of U.S. consumer spending, ranked from largest to smallest, are
housing, food & beverages, education & communication, and transportation.
education & communication, housing, food & beverages, and transportation.
food & beverages, housing, transportation, and medical care.
housing, transportation, food & beverages, and medical care.
A decrease in the price of large tractors imported into the United States from Russia
a. leaves the GDP deflator unchanged but decreases the consumer price index.
b. decreases the GDP deflator but leaves the consumer price index unchanged.
c. decreases both the GDP deflator and the consumer price index.
d. leaves both the GDP deflator and the consumer price index unchanged.
If the nominal interest rate is 6 percent and the rate of inflation is 4 percent, then the real interest rate is
a. -4 percent.
b. 2 percent.
c. 4 percent.
d. 8 percent.
The Bureau of Labor Statistics reported in 2005 that there were 53.23 million people over age 25 who had at least a bachelor’s degree, 40.59 million of whom were employed and 0.98 million of whom were unemployed. What were the labor-force participation rate and the unemployment rate for this group?
76.3% and 1.8%
76.3% and 2.4%
78.1% and 1.8%
78.1% and 2.4%
Which of the following is correct?
In the U.S. the natural rate of unemployment is frequently near 2%.
The natural rate of unemployment fluctuates more than the cyclical rate of
The cyclical rate of unemployment is sometimes below the natural rate of
None of the above is correct.
Which list contains two periods when the U.S. unemployment rate was below the natural rate of unemployment?
Civilian labor force
Persons unemployed 15 weeks or longer
Job losers and persons who have completed temporary jobs (excludes job leavers)
Total unemployed plus discouraged workers
Total unemployed plus all marginally attached workers
Total unemployed plus all marginally attached workers plus total employed part-time for economic reasons
Refer to Table 28-4. What is the U-6 measure of labor underutilization?
may improve the ability of the economy to match workers with appropriate jobs.
reduces the job search efforts of the unemployed.
increases the amount of frictional unemployment in the economy.
All of the above are correct.
When the wage is above the equilibrium level,
the labor market is functioning more efficiently than it otherwise would function.
there is a shortage of labor.
the quantity of labor supplied exceeds the quantity of labor demanded.
job search is the primary explanation for the unemployment that is observed.
Unions contribute to
frictional unemployment but not the natural rate of unemployment.
the natural rate of unemployment but not frictional unemployment.
both frictional unemployment and the natural rate of unemployment.
neither frictional unemployment nor the natural rate of unemployment.
Teenage unemployment is higher than unemployment of people ages 20 and over. Explain why economists would attribute at least part of this difference to minimum-wage laws.
Since unemployment rates are consistently higher in Canada and some Western European countries than in the United States, it appears that the natural rate of unemployment is lower in the United States. What might explain this difference?