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Econ - Chapter 8 & 9

Terms in this set (19)

The unemployment rate measures:
Unemployed workers as a percentage of the labor force.
Reginald looked for work for six months but could not find a job to his liking. He now spends his time at the beach. For purposes of employment he is considered:
Out of the labor force.
Frictional unemployment is:
Unemployment that is due to normal turnover in the labor market.
The type of unemployment that occurs because of a recession is called:
Cyclical unemployment.
______________________ argues that the productivity of workers will increase if they are paid more, and so employers will often find it worthwhile to pay their employees somewhat more than market conditions might dictate.
Efficiency wage theory.
Each month the Census Bureau carries out the Current Population Survey (CPS) (which has been carried out every month since 1940). A total of __________ households are contacted every month.
60,000
The labor force consists of:
All adults who are working or actively seeking work.
The unemployment rate may underestimate the true extent of unemployment if:
Many part-time employees would like to work full-time, but are unable to get the additional work.
Suppose that everyone who has looked for a job for more than six months gave up in despair and stopped looking. What would happen to the unemployment rate?
It would fall.
Inflation effects:
Goods, services, wages and income levels
If the price of milk rises from $2 per gallon in 1990 to $3.50 in 2015, what is the overall inflation rate?
75%
Why would a rise in the price of a fixed basket of goods over time overstate the rise in a consumer's true cost of living?
Substitution bias.
The Producer Price Index is based on prices paid for supplies and inputs by:
Producers of goods and services.
Which index is based on the prices of imported/exported merchandise?
International Price Index.
In the early 1990's extremely high inflation rates of 2500% were common in Russia. During that time, we can say that as a result of those inflation rates, Russia was experiencing ___________________.
Hyperinflation.
Which of the following is the name of the broadest measure of inflation?
GDP Deflator.
What is another name for negative inflation?
Deflation
When a price, wage, or interest rate is adjusted automatically with inflation, it is said to be __________.
Indexed
In economics, what distinguishes the real value from the nominal value?
Adjusting for inflation.
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