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Economics 108 homework. macroeconomics! HELP?!?

PostPosted: Wed Nov 30, 2011 8:38 pm
by collingwood
Multiple Choice

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

d. GNP.

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?

increased bankruptcies

falling profits

falling incomes

falling unemployment

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?

1965-1968, 1981-1984

1965-1968, 1997-2000

1981-1984, 1991-1994

1991-1994, 1997-2000

Table 28-4

Civilian labor force

100 million

Persons unemployed 15 weeks or longer

1.6 million

Job losers and persons who have completed temporary jobs (excludes job leavers)

3.1 million

Total unemployed

6.2 million

Total unemployed plus discouraged workers

7.0 million

Total unemployed plus all marginally attached workers

8.1 million

Total unemployed plus all marginally attached workers plus total employed part-time for economic reasons

9.2 million

Refer to Table 28-4. What is the U-6 measure of labor underutilization?

8.4 percent

9.0 percent

9.2 percent

35.2 percent

Unemployment insurance

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.

Short Answer

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?

Economics 108 homework. macroeconomics! HELP?!?

PostPosted: Wed Nov 30, 2011 8:44 pm
by jaye41
1) nonimal GDP. Because economists are studying the GDP without the price adjustments such as inflation.
2) $40 billion. Real GDP=nonimal GDP times 100/deflator.
3) falling unemployment. The unemployment rate rises in recessions.
4) gasoline
5) housing, transport, food, and healthcare
6) decreases both GDP deflator and CPI. These two things are very closely related.
7) 2%. It's just 6 minus 4.
8) 76.3 and 1.8. To find LFP, take the employed/population times 100. For the unemployment rate, take the unemployed/population times 100.
9) it's either C or D. The Natural Rate of Unemployment is hypothetical. Most economists say this rate is no les than 4%. So while it highly unlikely that the cyclical rate would be less than 4%, it's possible. My gut says C.
10) 1965-68, and 1997-2000. Both of these periods experienced booming economies.
11) I need to see the Table.
12) Unemployment Insurance does all of the above.
13) Creates a 'labor shortage,' i.e. more people want to work than firms are willing to hire. This phenomenon is generally called unemployment.
14) Unions do cause frictional unemployment, but not natural. The natural rate is a hypothetical number based on the state of the economy.

Minimum wage is a price control. Firms have to hire at a specific wage, and this creates shortages and surpluses of workers. The market doesn't create price equilibriums itself, and instead firms have to hire everyone at the minimum wage. A lot more teens would be hired ata lower wage if their wasn't the minimum wage law. Because of it, the firms aren't running as efficiently, and they will hire less teens, especially in an unstable economy like today's.

Well, the natural unemployment rate is hypothetical; there really isn't no exact number. So if the U.S.'s unemployment rate is lower, than the natural unemployment rate is going to be a lower standard.