Exam 20: Unemployment and Inflation

Table 20-12 -Refer to Table 20-12. Consider a simple economy that produces only three products: burritos, flashlights, and golf balls. Use the information in the table to calculate the inflation rate for 2018, as measured by the consumer price index.

Which of the following statements is true about the U.S. economy?

Explain why you would rather be a borrower during a period of unexpected rising inflation, and a lender during a period of unexpected declining inflation.

Most of the unemployment that occurred during the Great Depression was

The labor force participation rate equals the

If the CPI falls from 142 to 140 between two consecutive years, this implies that prices fell by 2% between those two years.

Most economists believe that biases cause changes in the CPI to overstate the inflation rate by ________ percentage points.

The full-employment rate of unemployment is zero.

Which of the following describes actual trends in the U.S. labor force participation rate?

In 2017, Boeing announced that it was laying off 1,800 employees in addition to the 7,000 workers it had cut the year before. The laid-off employees who were eventually able to find jobs at another aircraft manufacturer such as Airbus or Bombardier would have been considered ________ during the time they were out of work.

Table 20-22 -Refer to Table 20-22. Using the above table, calculate real average hourly earnings for 2016, 2017, and 2018. Calculate the rate of growth of real average hourly earnings from 2017 to 2018.

Workers laid off as a result of a recession suffer

The CPI is also referred to as

Jack just received a promotion at work and now works 50 hours per week instead of 35. As a result,

The formula for calculating the CPI is

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

The GDP deflator is the best measure that reflects the prices of goods and services purchased by the typical household.

The inflation rate measures the average prices of goods and services in the economy.

We say that the economy is at full employment if the unemployment rate is equal to

If cyclical unemployment is eliminated in the economy, then