1. Because of the way discouraged workers and part-time employment are measured,
ID: 1225919 • Letter: 1
Question
1. Because of the way discouraged workers and part-time employment are measured, the official unemployment rate a. overstates the size of the labor force b. truly reflects the level of unemployment c. overstates the unemployment problem d. understates the unemployment problem e. understates the size of the labor force 2. Anticipated inflation causes fewer problems than unanticipated inflation b. a. prevents workers from increasing their purchasing power causes more problems than unanticipated inflation d. c. allows us to eliminate the problems associated with unemployment e. is easy to predict for economists 3. Which of the following is reflected in GDP? the value of house maintenance a· b· the value of leisure time d. costs of cleaning up after pollution e· the value of illegal goods and services 4. Which of the following people would be counted in the labor force? a. Stephanie, who holds a Ph.D. in history, but can only find part-time employment at a fast- food restaurant b. Monique, age 90, who is enjoying her retirement in Montana c. Jordan, who would like to work as a stockbroker but is now a househusband d. Chou, who lost his job and last looked for work three months ago e. Steffan who thinks he could easily earn S100,000 per year, despite the opinion of the psychiatrist at the state hospital where he is a patient 5. Which of the following would not be included in an economist's definition of investment spending? a. the construction of a new office building by the Mountain City Real Estate Company b. the purchase of a new p c. the purchase of robots by Motor Magic Manufacturing d. the purchase of General Motors stock by Donald Trump e. an unexpected rise in inventories at Randle Manufacturing 6. Suppose you received a 3 percent increase in your nominal wage. Over the year, inflation ran about 6 percent. Which of the following is true? a. Both your nominal and real wages decreased. b. Your real wage fell. c. Both nominal and real wages increased. d. Although your nominal wage fell, your real wage increased. e. Your nominal wage fell.Explanation / Answer
Answer 1:
Option D. It understates the unemployment problem.
It does not include discouraged workers as unemployed and consider part time workers as fully employed.Thus, it understates the true unemplyment problem.
Answer 2:
Option A.
This is because wages of the workers are adjusted according to the anticipated inflation. If inflation is unanticipated then it will not be included in the contracts of the workers and according to Rational Expectation Hypothesis, only unanticipated inflation will lead to changes in the real variables in the economy and not the anticipated inflation.
Answer 3:
Option D. Cost of cleaing up after pollution is reflected in GDP.
All the other variables like leisure time, value of illegal goods and services etc are not reflected in GDP.
Answer 4:
Option A.
Though she is working part time and underemployed as compared to her qualifications she will be counted as a part of the labor force.
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