Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 15, Problem 5CQ
(a)
To determine
Identify the impact of a stable
(b)
To determine
Identify the impact of an increase in the anticipated inflation rate.
(c)
To determine
Identify the impact of expansionary
(d)
To determine
Identify the impact of a fall in the inflation rate.
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Economics: Private and Public Choice (MindTap Course List)
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- Look at the following data: The frictional unemployment rate is 3 percent, the natural unemployment rate is 6.5 percent, and the cyclical unemployment rate is 2.4 percent. The structural unemployment rate is __________ percent Select one: A. 3 B. 3.5 C. 0.6 D. 5.4 Suppose that the consumer price index (CPI) in a country was 120 in 2007 and 144 in 2008. The inflation rate between those two years was Select one: A. 12 percent. B. 14 percent. C. 20 percent. D. 25 percent Construction workers laid off from their jobs as the result of a recession are considered Select one: A. structurally unemployed. B. cyclically unemployed. C. frictionally unemployed. D. seasonally unemployed.arrow_forwardOn the way into school you hear the following report on the radio: "inflation for the month of February was 0.4%. Over the year inflation was 2.2%." Which of the following options best explains what these figures mean? Select one: a. Inflation in February was much slower than it was in other months from the past year. b. The prices of household necessities, excluded household luxuries, increased by 2.2%, compared to 12 months ago. c. The prices of the things a typical urban consumer buys, as estimated by the Bureau of Labor Statistics, increased on average 2.2%, compared to 12 months ago. d. The government increased prices by 2.2% over the past year in order to keep pace with production costs.arrow_forwardIf 2 million people are unemployed and 8 million people are employed, calculate the unemployment rate. Put your answer in percent (but leave off the percent sign).arrow_forward
- a. Suppose that in a small nation the adult population is 6 million, the number of employed is 3.8 million, and the labor force participation rate is 70%. What is the unemployment rate? b. Explain why unemployment rate can never be zero. C. Explain the differences between frictional unemployment and structural unemployment.arrow_forwardIdentify how each of the following individuals is influenced by unexpected inflation. a. A sales representative paid a set percentage commission based on the dollar value of her sales is (Click to select) due to unexpected inflation. b. A financial investor who lives off income made from buying and selling mortgaged commercial property is (Click to select) due to unexpected inflation. c. A retiree who lives on interest payments from his bank deposits is (Click to select) due to unexpected inflation. d. A storekeeper whose costs and revenues both rise by inflation is [ (Click to select)) due to unexpected inflation. e. A person who lives off income made buying and selling items on online auction sites is (Click to select) due to unexpected inflation. f. A worker with a union contract that incorporates partial indexation of her wage i ✓ (Click to select) due to unexpected inflation. unaffected better off worse offarrow_forwardThis is a two-part question dealing with the unemployment rate. Explain how and why it might be possible for the unemployment rate to fall during the worst part of a recession. Secondly, explain how and why it might be possible for the unemployment rate to rise when the economy is in the early stages of recovery.arrow_forward
- In which phase of the business cycle does inflation grow quickly? A)Expansion B)Peak C)Recession D)Trougharrow_forward1) Whether you gain or lose during a period of inflation depends on: a) how the price increases affect government purchases of goods. b) whether the economy is expanding or contracting. c) whether you save or not. d) whether your income rises faster or slower than prices of the things you buy. 2) A real wage that does not keep pace with inflation implies: a) a decrease in purchasing power. b) a decrease in nominal wages. c) a decrease in nominal wages after inflation. d) an increase in the inflation adjusted real wage.arrow_forwardQ24 The natural rate of unemployment is generally assumed to be Select one: a. the rate of unemployment at which the expected inflation rate is zero b. the rate of unemployment at which the expected inflation rate is equal to the actual inflation rate c. the rate of unemployment at which the actual inflation rate is zero d. very close to zero percent since everyone who wants to work is already workingarrow_forward
- For each of the following events, choose whether the unemployment rate increases, decreases, stays the same, or whether the effect is unknown. a. Individuals that were employed quit their jobs but do not look for new jobs. The unemployment rate increases. The unemployment rate decreases. The unemployment rate stays the same. The effect is unknown. b. Unemployed workers stop receiving employment benefits because they have been unemployed for too long. The effect is unknown. The unemployment rate increases. The unemployment rate decreases. O The unemployment rate stays the same.arrow_forwardSuppose there are 180 million employed people and 20 million unemployed people. a) What is the unemployment rate? b) Suppose that 5 million unemployed people give up their search for jobs and become discouraged workers. What is the new official unemployment rate?arrow_forwardWhich of the following is the positive impact of inflation? A) Inflation causes the real value of saving for a saving person to eroded. B) Inflation makes debtors pay less in real return. C) Fixed-income people have the same income but a high cost of living. D) lender will not have the option to earn interest.arrow_forward
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