Exam 9: Unemployment and Inflation

Nominal income is equal to real income if the CPI is less than 100.

Table 9-14 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 9-14.The real average hourly earnings for 1965 in 1982-1984 dollars equal

How would the unemployment rate and the labor force participation rate change if discouraged workers were counted as unemployed rather than counted as not in the labor force? Show using the formula for both measurements.

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.The CPI over that year rises from 180 to 200.What is the real interest rate you are paying?

Workers laid off as a result of a recession suffer

Inflation redistributes income to a greater extent when the inflation is unanticipated compared to when the inflation is anticipated.

If the federal government implements programs so that the unemployed are more quickly matched with jobs,then

Fill in the missing values in the table of data collected in the household survey for December,1996.The working-age population,employment,unemployment,and labor force are measured in thousands.Show your work.

The unemployment rate tends to be higher in the European Union as compared to the United States.

If cyclical unemployment is eliminated in the economy,then

The increase in quality bias in the consumer price index refers to the idea that price increases in the CPI reflect pure inflation,but ________ quality increases.This causes the CPI to ________ the cost of the market basket.

If inflation is anticipated,some effects of inflation on the redistribution of income can be avoided.

Table 9-22 -Refer to Table 9-22.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.

The unemployment rate is

There are no costs to inflation if it is fully anticipated.

Most of the unemployment that occurred during the Great Depression was

Figure 9-1 -Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage of $8 per hour is imposed,which of the following will result?

The United States has ________ social insurance programs,and generally has a ________ unemployment rate,as compared to Canada and Western Europe.

Inflation that is ________ than what is expected benefits ________ and hurts ________.

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2018,then the value of your grandfather's salary in 2018 dollars is approximately