Exam 6: Measuring Inflation and Unemployment

An economy has 100,000 residents. There are 46,000 people with full-time jobs, 14,000 people with part-time jobs, and 4,000 unemployed people who are actively looking for work. The unemployment rate for this economy is 6.3%.

In the United States, people are considered unemployed if and when they

Explain the following statement: Even if an economy is healthy, it will never have an unemployment rate of zero.

Emilio is saving for college by putting his summer earnings into a fixed-rate savings account. If inflation unexpectedly increases, then so too will Emilio's summer earnings.

The Weekly Jobs Report contains an estimate of the number of persons filing for unemployment benefits for the first time.

If the inflation rate is 4% and Social Security payments automatically rise by 4%, this adjustment is authorized by an

Other things equal, if a recession gets worse, the number of discouraged workers _____, and the number of those in the labor force _____.

Jasmine works in her family's boutique 16 hours a week and is considered an unpaid family member. Since she is not paid for her services, she is not in the labor force.

Suppose Lucy's contract specifies that her salary will be increased annually with inflation, as measured by the consumer price index (CPI). Suppose the CPI rose from 110 to 121 last year. By how much would her income go up? How does accelerating inflation affect the purchasing power of her money?

_____ unemployment is the result of changes in the business cycle.

Use of the GDP deflator allows economists to estimate the real rate of growth of the economy.

What is Mike's new salary if he earned $40,000 last year, the consumer price index increased from 120 to 125, and his salary is adjusted by the rate of inflation annually?

Hyperinflation is usually caused by

Hyperinflation is usually caused by the government running extremely high deficits and then increasing the money supply to finance such deficits.

In the United States, the Census Bureau computes the unemployment rate from

Like the consumer price index, the personal consumption expenditures price index is based solely on household surveys.

The natural rate of unemployment

Which activity would NOT qualify a person as being in the labor force?

In 2009, a market basket of goods and services cost $100 in Merryland while the same basket cost $200 in Berryland. In 2010, the cost in Merryland was $150 and in Berryland, the cost was $225. Based on the given information, which statement is TRUE?

Technological innovations in consumer products make it difficult to compare market baskets over time.