ECONOMICS QUESTIONS AND GRADED ANSWERS, 100%
GUARANTEE
Recent data for the U.S. reveal the following (all figures in millions).
Total population: 307.0
Under 16 or institutionalized: 69.3
Employed: 139.1
Unemployed: 14.6
1.The size of the labor force.
2.The number classified as "not in the labor force."
3.The unemployment rate. - 1. 153.7 million people
2. 84.0 million people
3. .095, or 9.5%.
Suppose the natural rate of unemployment is 4.5% and the current unemployment rate is 6%.
1. According to Okun's law, what is the size of the GDP gap?
2. If potential GDP is $1,000 billion, how much output is being lost as a result of the economy
being below its potential?
3. Recent data for the U.S. showed an unemployment rate of 9.5%. Suppose the natural rate at
the time was 4.5%. What was the size of the GDP gap?
4. At that time, GDP was $14,592 billion. What was potential GDP? - 1. The GDP gap is
the difference between actual GDP and potential GDP. Okun's law suggests a GDP gap of -2%
for every 1% that the unemployment rate exceeds its natural rate. In this case, the GDP gap is
(6.0 - 4.5) x -2 = -3%.
2. A GDP gap of -3% implies that $1,000 x .03 = $30 billion of output is being foregone.
3. The GDP gap was (9.5 - 4.5) x -2 = 10.0%.
4. By Okun's law, actual GDP of $14,592 billion was 10.0 percent below its potential.
Equivalently, actual GDP is 90% of potential GDP. Potential GDP is then found as $14,592/.90
= $16,213 billion.
, the phrase of the business cycle in which real GDP is at minimum is called - the trough
in which phrase of the business cycle will the economy most likely experience rising real output
and falling unemployment rates - expansion
Alex works in his own home as a homemaker and full-time caretaker of his children. officially
he is - not in the labor force
assuming the total population is 100 million, the civilian labor force is 50 million, and 47 million
workers are employed, the unemployment rate is - 6%
the natural rate of unemployment is the - full-employment unemployment rate
assume that the natural rate of unemployment in the U.S. economy is 5 percent and the actual
rate of unemployment is 9 percent. according to okuns law, the negative GDP gap as a
percentage of potential GDP is - 8%
Suppose that a person's nominal income rises from $10,000 to $12,000 and the consumer price
index rises from 100 to 105. The person's real income will: - rise by about 15 percent
If both the real interest rate and the nominal interest rate are 3 percent, then the: - inflation
premium is zero
a nation has a population of 260 million people. of these, 60 million are retired, in the military,
institutional, or under 16 years old. there are 188 million who are employed and 12 million who
are unemployed. what is the unemployment rate - 6 percent
the unemployment rate in an economy is 7.5 percent. the total population of the economy is 250
million and the size of the civilian labor force is 180 million. the number of employed workers in
this economy is - 166.5 million
GUARANTEE
Recent data for the U.S. reveal the following (all figures in millions).
Total population: 307.0
Under 16 or institutionalized: 69.3
Employed: 139.1
Unemployed: 14.6
1.The size of the labor force.
2.The number classified as "not in the labor force."
3.The unemployment rate. - 1. 153.7 million people
2. 84.0 million people
3. .095, or 9.5%.
Suppose the natural rate of unemployment is 4.5% and the current unemployment rate is 6%.
1. According to Okun's law, what is the size of the GDP gap?
2. If potential GDP is $1,000 billion, how much output is being lost as a result of the economy
being below its potential?
3. Recent data for the U.S. showed an unemployment rate of 9.5%. Suppose the natural rate at
the time was 4.5%. What was the size of the GDP gap?
4. At that time, GDP was $14,592 billion. What was potential GDP? - 1. The GDP gap is
the difference between actual GDP and potential GDP. Okun's law suggests a GDP gap of -2%
for every 1% that the unemployment rate exceeds its natural rate. In this case, the GDP gap is
(6.0 - 4.5) x -2 = -3%.
2. A GDP gap of -3% implies that $1,000 x .03 = $30 billion of output is being foregone.
3. The GDP gap was (9.5 - 4.5) x -2 = 10.0%.
4. By Okun's law, actual GDP of $14,592 billion was 10.0 percent below its potential.
Equivalently, actual GDP is 90% of potential GDP. Potential GDP is then found as $14,592/.90
= $16,213 billion.
, the phrase of the business cycle in which real GDP is at minimum is called - the trough
in which phrase of the business cycle will the economy most likely experience rising real output
and falling unemployment rates - expansion
Alex works in his own home as a homemaker and full-time caretaker of his children. officially
he is - not in the labor force
assuming the total population is 100 million, the civilian labor force is 50 million, and 47 million
workers are employed, the unemployment rate is - 6%
the natural rate of unemployment is the - full-employment unemployment rate
assume that the natural rate of unemployment in the U.S. economy is 5 percent and the actual
rate of unemployment is 9 percent. according to okuns law, the negative GDP gap as a
percentage of potential GDP is - 8%
Suppose that a person's nominal income rises from $10,000 to $12,000 and the consumer price
index rises from 100 to 105. The person's real income will: - rise by about 15 percent
If both the real interest rate and the nominal interest rate are 3 percent, then the: - inflation
premium is zero
a nation has a population of 260 million people. of these, 60 million are retired, in the military,
institutional, or under 16 years old. there are 188 million who are employed and 12 million who
are unemployed. what is the unemployment rate - 6 percent
the unemployment rate in an economy is 7.5 percent. the total population of the economy is 250
million and the size of the civilian labor force is 180 million. the number of employed workers in
this economy is - 166.5 million
