Macro Economics Chapter 9
total product oscillations.
stagnant productivity growth.
rising real GDP.
the long-run increase in the relative importance of durable goods in the U.S. economy.
the long-term expansion or contraction of business activity that occurs over 50 or 100 years.
fluctuations in business activity that average 40 months in duration.
fluctuations in business activity that occur around Christmas, Easter, and other major holidays.
military goods and capital goods.
services and nondurable consumer goods.
clothing and education.
capital goods and durable consumer goods.
cost-push inflation is present.
nominal domestic output falls.
demand-pull inflation is present.
real domestic output falls.
Government is unable to respond by changing the amount of money in circulation.
Changes in total spending cause supply shocks that cause cyclical variation.
Prices are sticky in the short run.
Prices are flexible in the long run.
Refer to the given information. The labor force in Scoob is:
Refer to the given information. The unemployment rate in Scoob is:
Refer to the given information. If the natural rate of unemployment in Scoob is 5 percent, then:
structural unemployment is about 3 percent.
frictional unemployment is about 2 percent.
cyclical unemployment is about 2 percent.
hidden unemployment is about 5 percent.
about 4-5 percent of the total population is unemployed.
90 percent of the labor force is employed.
about 4-5 percent of the labor force is unemployed.
100 percent of the labor force is employed.
not a member of the labor force.
higher than the full-employment rate of unemployment.
lower than the full-employment rate of unemployment.
that rate of unemployment occurring when the economy is at its potential output.
found by dividing total unemployment by the size of the labor force.
employed workers and persons who are officially unemployed.
employed workers but excludes persons who are officially unemployed.
full-time workers but excludes part-time workers.
permanent employees but excludes temporary employees.
not in the labor force.
in the labor force.
understate unemployment because individuals receiving unemployment compensation are counted as employed.
understate unemployment because discouraged workers are not counted as unemployed.
include cyclical and structural unemployment but not frictional unemployment.
overstate unemployment because workers who are involuntarily working part time are counted as being employed.
unemployed and therefore the official unemployment rate may overstate the level of unemployment.
unemployed and therefore the official unemployment rate may understate the level of unemployment.
fully employed and therefore the official unemployment rate may overstate the level of unemployment.
fully employed and therefore the official unemployment rate may understate the level of unemployment.
ratio of unemployed to employed workers.
number of employed workers minus the number of workers who are not in the labor force.
percentage of the labor force that is unemployed.
percentage of the total population that is unemployed.
increase in the short run but eventually decline.
not officially a member of the labor force.
a part of structural unemployment.
a part of cyclical unemployment.
a part of frictional unemployment.
Frictional and cyclical unemployment.
Structural and frictional unemployment.
Cyclical and structural unemployment.
Frictional, structural, and cyclical unemployment.
the official unemployment rate will fall.
the official unemployment rate will rise.
the official unemployment rate will remain unchanged.
the size of the labor force will increase.
Bureau of Labor Statistics.
Bureau of Unemployment.
Bureau of Economic Analysis.
Bureau of Economic Research.
the economy achieves its potential output.
there is only a relatively small amount of cyclical unemployment.
only frictional unemployment exists.
only structural unemployment exists.
NDP and GDP.
NI and PI.
actual GDP and potential GDP.
nominal GDP and real GDP.
an excess of imports over exports.
a low rate of unemployment.
a high rate of unemployment.
a sharply rising price level.
the Coase theorem.
all prices are rising, but at different rates.
all prices are rising and at the same rate.
prices on average are rising, although some particular prices may be falling.
real incomes are rising.
inflation of 4 percent.
inflation of 3.33 percent.
deflation of 3.33 percent.
deflation of 4 percent.
occurs when prices of resources rise, pushing up costs and the price level.
occurs when total spending exceeds the economy’s ability to provide output at the existing price level.
occurs only when the economy has reached its absolute production capacity.
is also called cost-push inflation.
the GDP gap.
the inflation premium.
a decline in per unit production costs.
a decrease in wage rates.
a negative supply shock.
an increase in resource availability.
dividing nominal income by 70.
multiplying nominal income by 1.03.
dividing the price index (in hundredths) by nominal income.
dividing nominal income by the price index (in hundredths).
dividing the price level by nominal income.
inflating nominal income for inflation.
dividing the annual rate of inflation into the number “70.”
deflating nominal income for inflation.
fall by about 20 percent.
fall by about 2 percent.
rise by about 15 percent.
rise by about 25 percent.
reduces real output.
increases real output.
reduces the unemployment rate.
raises the natural rate of unemployment.
invalidate the “rule of 70.”
apply only to demand-pull inflation.
increase the gap between nominal and real income.
tie wage increases to changes in the price level.
creditors gain because their loans are repaid with dollars of higher value.
people tend to hold goods rather than money.
income is redistributed away from borrowers.
the real value of the national currency rises.
arbitrarily redistributes real income and wealth.
invariably leads to hyperinflation.
usually is accompanied by declining real GDP.
reduces everyone’s standard of living.