Macroeconomics Questions

The type of inflation that is a greater problem to society isA.anticipated inflation because the purchasing power of the dollar falls very rapidly.B.unanticipated​ inflation, since it causes greater redistribution of income between those making payments and those awaiting payments in the future.C.unanticipated​ inflation, since it has some costs associated with​ it, such as menu costs.D.anticipated​ inflation, since people have to pay taxes on the higher nominal income even though the real income has not changed.

Consider the effect of each of the following on the unemployment​ rate:a. The minimum wage lawA.increases cyclical unemployment in the economy.B.has a significant effect on the unemployment rate since a large part of the labor force earns the minimum wage.C.has only a small effect on the unemployment rate since only a small part of the labor force earns the minimum wage.D.increases the unemployment rate among highly skilled workers.

The payment of government unemployment insurance reduces the severity of recessions byA.prolonging the job search period for unemployed workers.B.adding to the level of frictional and structural unemployment.C.preventing a huge drop in income and spending for the unemployed.D.giving extra income to everyone and thus increasing consumption spending.

Based on these​ numbers, can you determine which city had the most expensive homes in November 2020​?A.DallasB.It is not possible to determine this with the information provided.C.New YorkD.San DiegoE. Phoenix

Which one of the following is not a measure of the price​ level?A.Government Price​ Index: an average of the prices paid by the government for goods and services used only by different government agencies.B.GDP​ Deflator: broadest measure of the average price level as it includes prices of every final good and service.C.Consumer Price​ Index: an average of the prices of goods and services a typical family of four would purchase.D.Producer Price​ Index: an average of prices received by firms for goods and services at all stages of production.

What happens if we measure GDP by adding up the value of every good and service produced in the​ economy?A.This is the correct measure of real GDP but not nominal GDP.B.GDP is overestimated because of double counting.C.GDP is underestimated because of double counting.D.This is the correct measure of nominal GDP but not real GDP.

Disposable personal income is equal toA.the income households have to​ consume, save, and pay taxes.B.personal income minus government transfer payments plus personal tax payments.C.personal income minus Social Security payments.D.personal income minus personal tax payments.

Two important trends in the labor force participation rates of adults aged 20 and over in the United States since 1948 are the​ _________ labor force participation rate of adult women and the​ __________ labor force participation rate of adult men.

b. The effect of labor unions on overall unemployment is _______ since only a _______ percentage of the labor force outside the government is unionized.

The BLS collects price statistics from traditional​ full-price retail​ stores, which do not reflect the prices some consumers pay by shopping at discount stores or on the Internet.This is a description of which​ bias?A.the outlet biasB.the substitution biasC.the new product biasD.the increase in quality bias

An article in the Economist states that​ "the appeal of GDP is that it​ offers, or seems​ to, a summary statistic of how well an economy is​ doing."​Source:​ "The Euro-Area​ Economy: Speeding​ Up," Economist​, May​ 6, 2017.In what sense does GDP offer a summary statistic of how well an economy is​ doing?A.GDP can measure happiness among citizens—that ​is, the more goods an economy​ produces, the happier its people are—thus indicating​ well-being.B.Since GDP accounts for​ crime, pollution, and other social​ problems, it can be used as a rough measure of​ well-being.C.Since GDP measures how much an economy produces during a period of​ time, it may also indicate​ well-being.D.GDP is able to provide a summary of the goods and services consumed by a typical​ person, thus indicating​ well-being.

Government unemployment insurance tends toA.increase the unemployment rate by lowering the opportunity cost of job search.B.have no direct effect on the unemployment rate.C.increase the unemployment rate by increasing the opportunity cost of job search.D.decrease the unemployment rate by lowering the opportunity cost of job search.

An increase in the number of job quits would suggest that it is becomingA.more difficult to find jobs because employees who leave voluntarily are less confident of finding another one.B.neither easier nor more difficult to find a job.C.easier to find jobs because employees who leave voluntarily are confident of finding another one.D.more difficult to find jobs because people are unsatisfied with their work.

The price index which is used to measure changes in the cost of living is theA.GDP Deflator.B.Producer Price Index​ (PPI).C.Consumer Price Index​ (CPI).D.Retail Price Index.

Changes in the CPI overstate the true inflation rate due to four​ "biases." If apple prices rise rapidly during the month while orange prices​ fall, consumers will reduce their apple purchases and increase their orange purchases.Which of the four biases is concerned with this consumer​ behavior?A.the new product biasB.the substitution biasC.the increase in quality biasD.the outlet bias

Discuss the likely impact of the following event on the unemployment rate. If the length of time workers are eligible to receive unemployment insurance payments doubles​, then the unemployment rate will:

Why does inflation make nominal GDP a poor measure of the increase in total production from one year to the​ next?A.When nominal GDP increases from year to​ year, the increase is due partly to changes in prices and partly to changes in quantities.B.GDP is a measure of production in quantity terms.C.Nominal GDP separates increases in GDP as a result of price changes from increases in GDP as a result of quantity changes.D.All of the aboveE.A and B only

The headline on an article in the Wall Street Journal​ was: "Why Ice Cream is More Important Than Bacon When Tracking​ Inflation."​Source: Sarah​ Chaney, "Why Ice Cream is More Important Than Bacon When Tracking​ Inflation," Wall Street Journal​, April​ 17, 2017.Considering how the CPI is​ constructed, why would ice cream be more important than bacon in calculating​ inflation?A.Ice cream would be more important if consumers spent a higher fraction of their budgets on ice cream than on bacon.B.Ice cream would be more important because consumer biases for bacon will tend to understate the true inflation rate.C.Ice cream would be more important because the consumption of ice cream is more constant over time.D.Ice cream would be more important since it is more representative of a typical market basket for a family of four.

Most economists agree that the​ above-market wage paid in unionized industries significantly increases the unemployment rate in the United States.A.TrueB.False

Which of the following do we subtract from GDP to obtain national​ income?A.investmentB.the production of fixed capitalC.consumptionD.depreciation