Exam 5: Monitoring Jobs and Inflation

What is the relationship between the natural unemployment rate, the unemployment rate, potential GDP, and actual GDP?

Suppose there are currently 100 people unemployed, 1,500 people employed, 1,600 people in the labor force, and 2,000 people in the working age population. The unemployment rate equals 100 times

Frictional unemployment increases when

-The labor force participation rate is calculated as the

If this year the price level is 135 and last year it was 125, the inflation rate is

The percentage of the people of working age who have jobs is called the

Is the CPI a biased measure of the inflation rate? Explain your answer.

Which population category equals the sum of employed and unemployed people?

The natural unemployment rate increased significantly during the 1980s and the 1990s.

Consider the following scenario. Initially the economy has 90 million people working, 10 million people unemployed, and 20 million people not in the labor force. Then prospects for the economy improve. Five million people who previously were not in the labor force now join the 10 million previously unemployed in looking for work. For now, the economy remains with 90 million workers. What happens to the unemployment rate?

Which of the following most likely would decrease frictional unemployment?

A typical household in Orangeland consumes only orange juice and shorts. Last year, which was the base year, the household spent $400 on juice and $120 on shorts. In the base year, juice was $2 a bottle and shorts were $10 a pair. This year, juice is $3 a bottle, shorts are $12 a pair, and a typical household has bought 180 bottles of juice and 14 pairs of shorts. a) What is the basket used in the CPI? b) Calculate the CPI in the current year. c) Calculate the inflation rate in the current year. d) Is the inflation rate that you've calculated likely to be biased? Why or why not?

Structural unemployment is

If the CPI basket costs $35 in the base period but costs $42, what is the CPI in the next period?

Which of the following statements would be true regarding different measurements of inflation in the U.S. since 2000?

The Consumer Price Index is a measure of the average of the prices paid by ________ for a fixed basket of consumer goods and services.

Frictional unemployment is

From 1980 to 2000 the employment-to-population ratio generally ________ and from 2000 to 2015 the ratio generally ________.

When the economy moves into and out of recessions and expansions, the unemployment rate fluctuates around the

Suppose the CPI last year is 121 and the CPI this year is 137. The CORRECT method to calculate the inflation rate is