Exam 7: Unemployment and Inflation

The table given below reports the consumer price index in a country for four different years. -Refer to Table 7.1. By how much did consumer prices rise between 1980 and 2003 (rounded to the first decimal place)?

Frictional and structural unemployment are always present in a dynamic economy.

In the business cycle, a trough marks the end of a(n) _____ and the beginning of a new _____.

Scenario 7.1?Of 1,350 people surveyed, 318 are not working.?The status of those not working is as follows:?122 full-time students?29 discouraged workers?18 in long-term-care facilities?21 seeking employment and aged 16 or older?50 retirees?63 under age 16 15 working in the underground economy and not looking for a "real" job?Eight of those working were under 16 years of age. -Refer to Scenario 7.1. If any two individuals who were actively looking for a job, got tired of not finding one and decided to become full-time students, then:

Some economists say that "full employment" exists in an economy when:

The cost-of-living adjustments that are included in the wage contracts protect:

Why do the European countries like France, Germany, Italy and Spain have higher unemployment rates than other industrialized nations?

Demand-pull inflation is more likely to occur when the economy is producing at maximum capacity.

If the average price level in 1991 was 1.20 relative to the base year in 1986, then a dollar in 1991 bought 20 percent more goods and services than a dollar in 1986.

If the nominal interest rate is less than the rate of inflation, the real interest rate:

During the off season, a fruit picker did not work, so he should be considered:

Assume you borrow $1,000 on credit cards at an annual interest rate of 10 percent. If the inflation rate is 12 percent during the year and the debt has to be paid back in 12 months, then:

Scenario 7.2?Suppose it has been recently predicted that in the year 2020, the total number of residents in the United States will be 315.5 million, the number of residents under 16 years of age will be 85 million, the number of institutionalized adults will be 17 million, the number of adults not actively looking for work will be 39 million, and the number of unemployed will be 21.5 million. -Refer to the data in Scenario 7.2. What will be the size of the labor force in the United States in the year 2020?

Institutionalized adults are not considered to be a part of the labor force by the Bureau of Labor Statistics.

Leading and lagging indicators show the effects of economic fluctuations but coincident indicators do not.

Which of the following statements about the GDP gap is not true?

What is another name for the natural unemployment rate?

During a period of economic expansion, we would expect increasing levels of employment.

Scenario 7.2?Suppose it has been recently predicted that in the year 2020, the total number of residents in the United States will be 315.5 million, the number of residents under 16 years of age will be 85 million, the number of institutionalized adults will be 17 million, the number of adults not actively looking for work will be 39 million, and the number of unemployed will be 21.5 million. -Refer to the data in Scenario 7.2. What is the predicted unemployment rate in the United States for the year 2020?

Which of the following statements regarding the unemployment rates in the U.S. between 1971 and 2002 is true?