Exam 20: Unemployment and Inflation

Table 20-17 -Between 2017 and 2018, the CPI of a small nation rose from 182 to 185. If household incomes rose by 3% during that period of time, which of the following is true?

Table 20-23 -Refer to Table 20-23. The table above lists the actual minimum wage and CPI in 1974 and in 2017. Using the above table, calculate the real minimum wage for 1974 and 2017. Calculate the rate of growth of the real minimum wage from 1974 to 2017. Are workers better off in terms of the purchasing power of a dollar in 1974 or 2017? Explain why.

The real rate of interest is

Which of the following describes a situation in which the person is hurt by inflation?

Suppose 180,000 people are employed, 20,000 people are unemployed, and 50,000 people are not in the labor force. Calculate the labor force participation rate.

Which of the following individuals would be most negatively affected by anticipated inflation?

An efficiency wage

The increased generosity of unemployment insurance programs in Canada as compared to the United States should

If inflation is unanticipated, no redistribution of income can occur.

If the minimum wage is set above the market wage

Table 20-14 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 20-14. The real average hourly earnings for 1965 in 1982-1984 dollars equal

The Bureau of Labor Statistics does not count discouraged workers as unemployed. Suppose discouraged workers were counted as unemployed. Explain how the unemployment rate and the labor force participation rate would change.

Suppose you borrow $1,000 at an interest rate of 12 percent. If the expected real interest rate is 5 percent, then the rate of inflation over the upcoming year that would be most beneficial to you would be a rate of inflation

Except for recessions, the duration of unemployment for the typical person lasts

If your nominal wage rises more slowly than the price level, we can say your real wage has ________ and the purchasing power of a dollar has ________.

The nominal interest rate minus the inflation rate equals the real interest rate.

Sarah is a full-time student who is not looking for work. What kind of unemployment is Sarah experiencing?

Paying efficiency wages are a way for a company to cut costs and become more efficient, and are therefore lower than market wages.

The economy has gone into a recession. You have majored in computer science and, because of the recession, have difficulty in finding a job. According to the information in the chapter, should you go back to school and get a second major?

If the CPI changes from 125 to 120 between 2017 and 2018, how did prices change between 2017 and 2018?