chp7 - Student Instructor Sandra Hadler Assignment MEL...

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Unformatted text preview: Student: Instructor: Sandra Hadler Assignment: MEL Quiz-Set 3 Chapter T Date: Course: EconlOl Spring 3010 Time: Back: Case.-"Fair: Principles of 1\-Iacroec¢.nnnnics 9e 1_ J ohn‘s grandfather was a coal miner in Pennsylvania. After the mines shut down in the 1940's he could not find a job. He was: [:JA. cyclically unemployed. [:1 B. seasonally unemployed. [:1 C. frictionally unemployed. [:1 D. structurally unemployed. Answer: D 2_ Lex graduated from college two months back with an undergraduate degree in Finance. He is now looking for a job in the financial sector. He is currently classified as: [:JA. frictionally unemployed. [:1 B. structurally unemployed. [:1 C. cyclically unemployed. [:1 D. seasonally unemployed. Answer: A 3_ Tamara lost herjob as a cashier in the retail store when the store went out of business due to a downturn in general business conditions. Tamara was: [:JA. frictionally unemployed. [:1 B. cyclically unemployed. [:1 C. seasonally unemployed. [:1 D. structurally unemployed. Answer: B 4_ In the economy of Cycladia, the total unemployment rate is equal to l 1.0 percent, the structural unemployment rate is 2.4 percent, and the frictional unemployment rate is 4.4 percent. Calculate the cyclical unemployment rate. percent (enter your answer to one decimal place). Answer: 4.2 Page 1 Student: Date: Time: Instructor: Sandra Hadler Colu'se: EconlOl Spring 3010 Book: Case.-"Fair: Principles of 1\-Iacroeconolnics 9e Assignment: MEL Quiz-Set 3 Chapter T LII 6. In March, 2006 the labor department of the country of Jobland determined that the size of labor force was 105 million out of which 92 million were employed. In May 2006, the labor department classified 1.0 million people as "discouraged workers". Assuming that no new jobs were created between March and April, calculate the unemployment rate for March and April. Jobland unemployment rate in March = D percent. (enter your responses to one decimal place). Jobland unemployment rate in April = D percent (enter your responses to one decimal place). Answers 12.4 11.5 Suppose that in one month the number of discouraged workers as classified by the Bureau of Labor Statistics increases by 50,000. As a result, CIA. the number of unemployed workers declines by 50,000; the size of the labor force does not change; unemployment rate falls. [:1 B. the number of unemployed workers does not change; the size ofthe labor force falls by 50,000; unemployment rate increases. [g] C. the number of unemployed workers declines by 50,000; the size of the labor force falls by 50,000; unemployment rate falls. [g] D. the number of unemployed workers declines by 50,000; the size of the labor force falls by 50,000; unemployment rate remains unchanged. Answer: C The following information is available for the country of Tappania: 1990 2000 140.0 million 154.0 million 126.0 million 134.8 million Labor Force Employment Calculate the unemployment rates for 1990 and 2000. Unemployment Rate for 1990 = %. (ronnd your answer to one decimal place). Unemployment Rate for 2000 = " 0 {round your answer to one decimaf pface). Answers 10.0 12.5 In the Republic ot‘Priceland, in 2005 the consumer price index was 168.00. In 2006 the index increased to 175.56. Calculate the rate of inflation in Priceland between 2005 and 2006. Rate of inflation = D percent ( enter your answer as a percentage rounded to two decimal! piaces). Answer: 4.50 Page 3 Student: Date: Time: Instructor: Sandra Hadler Colu'se: EconlOl Spring 3010 Book: Case.-"Fair: Principles of 1\-Iacroec«.nnnnics 9e Assignment: MEL Quiz-Set 3 Chapter T 9. 10. 11. 12. The CPI tends to: (DA. estimate inflation correctly. [g] B. overestimate the extent of inflation because it uses a fixed market basket and ignores that when prices ofcertain items increse, individuals substitute usually substitute them by lower priced items. [:1 C. overestimate inflation by excluding the prices of intermediate products. [:1 D. underestimate the extent of inflation when prices increase rapidly. Answer: B Suppose, you are lending money to your friend Julia and you want a real rate of return of 100%, and you expect the inflation rate to be 4.00%. Which of the following interest should you charge? [:JA. 5.50%. CJB. 7.00% [:JC. 11.00% C1D. 3.00% Answer: C Suppose that the inflation rate is higher than expected, which of the following groups is most likely to be adversely affected by this unexpected inflation? [:JA. A mortgage company scheduled to receive a fixed interest rate mortgage payments. [:1 B. A homeowner scheduled to make fixed interest rate mortgage payments. [:1 C. An individual with an adjustable with inflation interest rate savings account. C1D. A college student with a fixed interest rate college loan. Answer: A A labor union wants the union members‘ real wages to go up by 3.5% for the coming year. How much of an increase in wages should the union ask for, given that the inflation rate is expected to be 6.37% for the coming year? [:JA. 10.2 % (DE. 15.0 "/0 [:JC. 3.5% CD. 3.2 % Answer: A Page 3 Student: Instructor: Sandra Hadler Assignment: MEL Quiz-Set 3 Chapter T Date: Colu'se: EconlOl Spring 3010 Time: Back: Case-"Fair: Principles of 1\-Iacroeconolnics 9e 13_ Suppose, you are planning to put away one year $50,000 of your savings. You have the following options. Buy an indexed savings bond that earns 6.50% interest rate for the next year, or a non-indexed savings bond that earns 10.50% interest rate for the next year. The inflation rate for the next year is expected to be 4.00%. Which option will you choose for the next year? [:JA. The non-indexed bond should be chosen as it pays a higher rate of interest. [:1 B. The rate of inflation should not play a role in making this decision. [:1 C. It does not matter whether the indexed or the non-indexed bonds are chosen, since they pay the same real rate of interest. C1D. The indexed bond option should be chosen as it protects from inflation. Answer: C 14_ Ifall wages, salaries, welfare benefits, and other sources of income were indexed to inflation [:JA. inflation may not have negative impacts on people's purchasing power, but it will still have harmful negative effects on the economy by increasing administrative costs and inefficiencies. [:1 B. inflation will benefit the both debtors and creditors. [:1 C. inflation will have no negative effect on the economy. [:1 D. inflation will lower the purchasing power ofpeople on fixed income. Answer: A 15_ The capacity for long-run economic growth for an economy is determined [:JA. by the size of its labor force, its capital stock, and productivity of labor and capital. [:1 B. only by its infrastructure. [:1 C. only by labor and capital productivity. [:1 D. only by technology. Answer: A Page 4 ...
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This note was uploaded on 02/02/2012 for the course ECON 201 taught by Professor Shea during the Spring '08 term at Maryland.

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chp7 - Student Instructor Sandra Hadler Assignment MEL...

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