Inflation
Resources
Business Cycle
Wage Determination
Un-employment
100
What is the definition of Inflation?
Rise in the general (overall) price level
100
Marginal Revenue Product measures...
A: amount by which the addition of one more worker increases a firms total revenue
B:Decline in product price that a firm must accept to sell the extra output of one more worker
C: Increase in total resource cost resulting from the hire of one extra unit of a resource
D: increase in total revenue resulting from the production of one more unit of a product
A: amount by which the addition of one more worker increases a firms total revenue
100
The phase of the business cycle in which real GDP declines is called
A recession
100
A recession is a decline in
a:the inflation rate that lasts six months or longer.
b: the unemployment rate that lasts six months or longer.
C: real GDP that lasts six months or longer.
d: potential GDP that lasts six months or longer.
C: real GDP that lasts six months or longer
100
What is the definition of Unemployment
people who do not have a job, are available to work, and have actively searched for work in the last 4 weeks
200
What are the 3 goals of macroeconomics?
Economic growth, price stability, full employment
200
The MRP curve for labor...
A: intersects the firm's labor demand curve from above
B: is the firms labor demand curve
C: lies below the firms labor demand curve
D: Lies above the firm's labor demand curve
B: is the firms labor demand curve
200
In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?
Expansion
200
if the nominal wages of carpenters rose by 5 percent in 2013 and the price level increased by 3 percent, then the real wages of carpenters
increased by 2%
5-3=2
200
Which two types of unemployment will always exist?
structural and frictional
300
Helped or Hurt
Banks lend out small business loans at a fixed-interest rate.
Hurt, bank will receive money paid back in the future that is worth less
300
Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 80 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is...
48
(80-72)/1=8*6=48
300
3 workers
300
Unemployed 7
Total Population 145
Employed 95
Discouraged Workers 3
The table contains information about the hypothetical economy of Scoob. All figures are in millions. The labor force in Scoob is
102
--Labor force= Employed and Unemployed
300
Suppose the current unemployment in the Asartaland is 4.3%, and the nation’s natural unemployment rate is 5%. In what stage of the business cycle is this nation operation?
An expansion or growth stage, actual unemployment is below natural unemployment
400
A retired couple lives entirely on income from a pension the woman receives from her former employer that includes a cost of living adjustment (COLA). This year, she received a 5% increase in her COLA.
Helped, increase in COLA is greater than inflation rate,
Real income will increase by 1% = 5% – 4%
400
An employer hiring in a competitive labor market should hire additional labor as long as
MRP>wage rate
400
24$
400
What is the equation to calculate CPI?
(Market Value Basket2/Market Value of Basket1)*100
400
The population of the Republic of Butters is 165. Of these 140 individuals are in the working age population, 130 are in the labor force, and 25 are unemployed. What is the labor force participation rate in the Republic of Butters?
LFPR= (130 / 140)*100= 92.9%
500
Is this person hurt or helped by inflation?
Your friend buys a home with an adjustable-rate mortgage. Currently, the interest rate on the mortgage is 4.75%.
Helped, Current interest rate on loan is more than inflation rate,
Real interest rate is 0.75% = 4.75% – 4%
500
Harry owns a barbershop and charges $6 per haircut. By hiring one barber at $10 per hour, the shop can provide 24 haircuts per eight-hour day. By hiring a second barber at the same wage rate, the shop can now provide a total of 42 haircuts per day. The MP of the second barber is
18 haircuts
MP=change in TP/change in Q
(42-24)/1=18
500
The industries or sectors of the economy in which business cycle fluctuations tend to affect output most are
A: military goods and capital goods
B: services and nondurable consumer goods
C: clothing and education
D: capital goods and durable goods
D: capital goods and durable consumer goods
500
What is the equation to calculate inflation?
Percent change in CPI
(CPInew-CPIold)/CPIold
500
Suppose the current unemployment in the Republic of Butters is 8.2%, and the nation’s natural unemployment rate is 6%. In what stage of the business cycle is this nation operation?
An recession or contraction stage, actual unemployment is above natural unemployment