Question 1

Table 9-20
  Salaries in major league baseball have soared over the last 30 to 40 years.Some of the salary increase is due to inflation.The table above reports the consumer price index and the median nominal salary of the New York Yankees for 1989 and 2009.
Source: USA Today Salaries Database,asp.usatoday.com/sports/baseball/salaries/default.aspx
-Refer to Table 9-20.Calculate the real median salary of the New York Yankees in both 1982-1984 dollars and 2009 dollars.Calculate the percentage increase in the median salary of the Yankees from 1989 to 2009 in both nominal terms and in real terms.

Accepted Answer

The answer of Table 9-20
  Salaries in major league...

Question 2

An advantage of the establishment survey over the household survey of the labor market is that the establishment survey

Accepted Answer

A) is based on actual payrolls,rather than on unverified answers. 
B) includes the number of self-employed persons. 
C) includes persons employed at newly opened firms. 
D) provides an estimate of the number of persons unemployed.

Question 3

Describe the three types of unemployment.

Accepted Answer

The answer of Describe the three types of unemployment....

Question 4

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2013,then the value of your grandfather's salary in 2013 dollars is approximately

Accepted Answer

A) $84,775. 
B) $63,830. 
C) $37,200. 
D) $26,280.

Question 5

To reduce the bias in the consumer price index,the Bureau of Labor Statistics

Accepted Answer

A) updates the market basket every two years,rather than every 10 years. 
B) updates the market basket every 10 years,rather than every two years. 
C) incorporates substitutions by consumers when prices of specific products rise rapidly. 
D) incorporates substitutions by consumers when prices of specific products fall rapidly.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is an example of a worker experiencing frictional unemployment?

Accepted Answer

A) A worker quits his job at the Post Office to find more interesting work. 
B) A computer programmer loses her job because it is outsourced to India. 
C) An employee is laid off because the economy is suffering a recession. 
D) A United Airlines pilot loses her job because of lack of demand for air travel.

Question 8

Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?

Accepted Answer

A) A firm signs a 3-year contract with a union based on a 2 percent anticipated rate of inflation per year,and the actual rate of inflation ends up being 7 percent per year. 
B) A worker receives a raise in salary that is less than the rate of inflation,because management under-predicted inflation. 
C) Firms have to hire an extra worker to change prices in its store because of inflation. 
D) A bank collects a lower amount of interest from a loan because inflation was under-predicted.

Question 9

Labor unions cause unemployment because the union contract wage is set

Accepted Answer

A) below the market wage,causing a shortage of labor. 
B) below the market wage,causing a surplus of labor. 
C) above the market wage,causing a surplus of labor. 
D) above the market wage,causing a shortage of labor.

Question 10

What does the PPI measure?

Accepted Answer

A) the average change in the prices paid for all goods produced in the economy over a given year 
B) the average of the prices received by producers of goods and services at all stages of the production process 
C) the level of production of goods and services generated in the economy in a given year 
D) the difference between the prices consumers pay for goods and services and the prices producers pay for goods and services

Question 11

The Bureau of Labor Statistics counts as employed people who work part-time,but would prefer to work full-time.Suppose the people who had part-time jobs,but wanted full-time jobs,were counted as unemployed.Explain how the unemployment rate and the labor force participation rate would change.

Accepted Answer

The answer of The Bureau of Labor Statistics counts as...

Question 12

A full-time student who is not working is categorized as

Accepted Answer

A) unemployed. 
B) employed. 
C) not in the labor force. 
D) a discouraged worker. 
E) frictionally unemployed.

Question 13

The unemployment rate is higher with a minimum wage law than it would be without a minimum wage law.

Accepted Answer

A) True 
 B)False

Question 14

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.

Accepted Answer

A) also; understate 
B) also; overstate 
C) not; understate 
D) not; overstate

Question 15

The labor force participation rates of men have gradually increased since 1948.

Accepted Answer

A) True 
 B)False

Question 16

Following the recession of 2007-2009,the employment-population ratio

Accepted Answer

A) remained virtually unchanged for the next 36 months. 
B) was even lower four years after the end of the recession. 
C) began to slowly increase back to its pre-recession level. 
D) began to quickly increase back to its pre-recession level.

Question 17

Frictional unemployment is the result of

Accepted Answer

A) a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs. 
B) the search process of matching workers with jobs. 
C) the ups and downs in inflation. 
D) a slowdown in the economy.

Question 18

If the number employed is 190 million,the working-age population is 230 million,and the number unemployed is 10 million,then the unemployment rate is

Accepted Answer

A) 5%. 
B) 5.2%. 
C) 8%. 
D) 10%. 
E) 50%.

Question 19

Table 9-17
 
-Refer to Table 9-17.Looking at the table above,real average hourly earnings in 2010 were

Accepted Answer

A) $3.67. 
B) $5.63. 
C) $10.24. 
D) $11.37.

Question 20

Table 9-22
 
-Refer to Table 9-22.Using the above table,calculate real average hourly earnings for 2011,2012,and 2013.Calculate the rate of growth of real average hourly earnings from 2012 to 2013.

Accepted Answer

The answer of Table 9-22
 
-Refer to Table 9-22.Using the...

Exam 9: Unemployment and Inflation

An advantage of the establishment survey over the household survey of the labor market is that the establishment survey

Describe the three types of unemployment.

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2013,then the value of your grandfather's salary in 2013 dollars is approximately

To reduce the bias in the consumer price index,the Bureau of Labor Statistics

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

Which of the following is an example of a worker experiencing frictional unemployment?

Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?

Labor unions cause unemployment because the union contract wage is set

What does the PPI measure?

The Bureau of Labor Statistics counts as employed people who work part-time,but would prefer to work full-time.Suppose the people who had part-time jobs,but wanted full-time jobs,were counted as unemployed.Explain how the unemployment rate and the labor force participation rate would change.

A full-time student who is not working is categorized as

The unemployment rate is higher with a minimum wage law than it would be without a minimum wage law.

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.

The labor force participation rates of men have gradually increased since 1948.

Following the recession of 2007-2009,the employment-population ratio

Frictional unemployment is the result of

If the number employed is 190 million,the working-age population is 230 million,and the number unemployed is 10 million,then the unemployment rate is

Table 9-17 -Refer to Table 9-17.Looking at the table above,real average hourly earnings in 2010 were

Table 9-22 -Refer to Table 9-22.Using the above table,calculate real average hourly earnings for 2011,2012,and 2013.Calculate the rate of growth of real average hourly earnings from 2012 to 2013.