Exam III review 131

The definition of market equilibrium states that at the _______________, the quantity of labor demanded by employers will equal the quantity supplied.

• efficiency wage

• equilibrium wage

• sticky wage

• natural rate of unemployment

Cyclical unemployment arises when:

• the agriculture sector completes the cycle of planting, cultivating, and harvesting the nation's food supply.

• labor unions strike for higher wages.

• the business cycle enters an expansionary phase.

• business activity in the macroeconomy declines.

Karen chooses to go to university fulltime rather than to work. Karen:

• is not part of the labor force.

• is part of the labor force and what economists call a discouraged worker.

• is part of the labor force, but not actively seeking work.

• is considered employed.

A welder who quits his job and moves from Pittsburgh to Madison to try to get a better welding job is said to be:

• frictionally unemployed.

• underemployed.

• cyclically unemployed.

• structurally unemployed.

If the number of employed persons in a country equals 24 million, the number of unemployed persons equals 8 million, and the number of persons over age 16 in the population equals 40 million, the unemployment rate equals:

• 32%

• 25%

• 20%

• 8%

Another term used to describe negative inflation is:

• counter inflation

• deflation

• hyperinflation

• GDP deflator

Which of the following is the name used to describe the price index that consists of intermediate goods and finished goods?

• Producer Price Index

• Consumer Price Index

• Employment Cost Index

• Processing Price Index

The effects of inflation are seen in:

• goods and services only

• wages and income levels only

• services and wages only

• goods, services, wages and income levels

Inflation implies that the level of all prices _____________________.

• decrease

• stay the same

• increase

• none of the above

Alex wants to measure the nominal 1998 GDP of $993 billion in 2008 dollars. From the data he gathered, he knows the deflator for 1998 is 30 and for 2008, it is 74, and that real interest in those years was 6.23% and 3.21% respectively. If he avoids making a misleading calculation, what will the value be?  

• $430 billion

• $835 billion

• $2,063 billion

• $2,449 billion