Exam 9: Unemployment and Inflation

The natural rate of unemployment is the amount of unemployment

During a deflationary period,

If the number of unemployed workers is 200 million,and the number in the labor force is 500 million,what is the unemployment rate?

When actual inflation is less than expected inflation,

If you want to earn a real interest rate of 3% on money you lend,and you expect that inflation will be 2%,what nominal rate of interest will you charge?

When the price of gasoline rises,some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars.The fact that the CPI does not fully account for such changes in consumer behavior is called

You agree to lend $1,000 for one year at a nominal interest rate of 10%.You anticipate that inflation will be 4% over that year.If inflation is instead 3% over that year,which of the following is true?

What are the three main kinds of unemployment?

Suppose that the labor movement has a revival in the United States and the majority of workers join labor unions.As a result we would expect

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.The CPI over that year rises from 180 to 200.What is the real interest rate you are paying?

List three different price indices and explain how they differ in terms of the market basket on which they are based.

Suppose you obtain a fixed rate mortgage during a period of relatively high inflation.During the next ten years,inflation falls.Are you a winner or a loser due to inflation? Explain why.

If you have trouble finding a job because of a slowdown in the overall economy,we would say that you are

Monthly expenditures for a family of 4 in 2012 averaged $1,400.In 2013,the cost of the same purchases was $1,500.If 2012 is the base year,what was the CPI in 2013?

Why would a firm pay efficiency wages?

When the actual inflation rate turns out to be greater than the expected inflation rate,who gains - the borrower or the lender - and who loses? Explain why.

If your nominal wage rises faster than the price level,we can say your real wage has ________ and the purchasing power of your income has ________.

The Bureau of Labor Statistics does not count discouraged workers as unemployed.Suppose discouraged workers were counted as unemployed.Explain how the unemployment rate and the labor force participation rate would change.

If the BLS counted persons that are on active military service in the totals for employment,the labor force,or the working-age population,this would

We say that the economy is at full employment if the unemployment rate is equal to