Q.1 Briefly define the following terms:
a. Unemployment rate (be sure to give the definition of the unemployment rate)
b. Natural rate of unemployment
c. Frictional unemployment
2. Calculate the unemployment rate based on the following data:
a. 90 million employed workers, 10 million unemployed workers.
b. 126 million employed workers, 14 million unemployed workers.
3. Calculate the inflation rate based on the following data:
a. Price level last year = 90, price level this year = 99.
b. Price level last year = 120, price level this year = 126.
4. The price level in 2007 is 100. In 2008 the price level is 110. In 2009 the price level is 121. Calculate the inflation rate for 2007 to 2008 and 2008 to 2009.
|
Year
|
Real GDP
|
Nominal GDP
|
Price level
|
|
2004
|
1,000
|
1,100
|
1.10
|
|
2005
|
1,100
|
1,331
|
_____
|
|
2006
|
_____
|
1,690
|
1.30
|
|
2007
|
1,400
|
_____
|
1.40
|
|
2008
|
1,600
|
2,400
|
_____
|
|
2009
|
3,200
|
4,800
|
_____
|
5. The table above gives real GDP, nominal GDP, and the price level for the nation of Macroland. Fill in the blanks.
Answer the following multiple choice questions.
6. Which of the following people is considered unemployed?
a. A part-time worker who wishes to work full-time.
b. A person who gave up looking for a job because he or she was discouraged about his or her job prospects.
c. A person who has been searching for work, but turns down a job paying a lower wage rate than desired.
d. A person who is working but expects to be laid off at the end of the month.
7. If the number of people unemployed is 100, the number of people employed is 1000, and the working-age population is 1400, then the labor force is
a. 1000.
b. 1100.
c. 1400.
d. 1500.
8. Recessions and expansions affect most strongly which type of unemployment?
a. Frictional unemployment
b. Structural unemployment
c. Cyclical unemployment
d. Seasonal unemployment
9. At the natural rate of unemployment, ____ unemployment equals zero.
a. frictional
b. structural
c. cyclical
d. all types of
10. The price level is 120 in 2008 and 150 in 2009. What is the inflation rate between these two years?
a. 2.5 percent.
b. 20 percent.
c. 25 percent.
d. 30 percent.
11. Which of the following relationships is correct?
a. Nominal GDP = (GDP Deflator/Real GDP) ´ 100
b. Real GDP = (Nominal GDP ´ GDP Deflator)/100
c. GDP Deflator = (Nominal GDP/Real GDP) ´ 100
d. Real GDP = Nominal GDP ´ 100