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ECON 201 EXAM | Questions with Answers 100% Verified Correct| Already Passed
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ECON 201 EXAM | Questions with Answers 100% Verified Correct| Already Passed
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ECON 201 EXAM | Questions with Answers 100%Verified Correct| Already Passed
Nominal GDP is - ✔✔GDP valued at prices of that year
The working-age population is defined as the number of - ✔✔people over the age of 16 who
are not in jail, hospital, or other institution
The labor force is the sum of the - ✔✔number of employed people and the number of
unemployed people
Who is considered NOT to be considered in the labor force? - ✔✔a person who is not
working and who has not tried to find a job
The unemployment rate equals - ✔✔(number of people unemployed/labor force) x 100
Full employment occurs - ✔✔only if the unemployment rate is equal to the natural rate of
unemployment
Cyclical unemployment - ✔✔fluctuates over the business cycle
Structural unemployment is the result of - ✔✔technological change, absolute job skills, or
foreign competition
Full-time students and prisoners are ______ - ✔✔not in the labor force
From 1961 to 2005, the labor force participation rate of women in the US ______ at a _______
rate than the labor force participation rate of men ______. - ✔✔increased; faster; decreased
, The unemployment rate is at the natural unemployment rate when - ✔✔cyclical
unemployment equals zero
When the unemployment rate is below the natural unemployment rate, - ✔✔real GDP is
greater than potential GDP
The Consumer Price Index is a measure of the average of the prices paid by _______ for a fixed
basket of consumer goods and services. - ✔✔urban consumers
Because of the biases in calculating the CPI, actual inflation is - ✔✔less than the measure
inflation rate by about 1 percent per year
Deflation represents: - ✔✔a reduction in the aggregate price level
The currently used method for calculating the CPI - ✔✔probably overstates inflation by
about 1 percentage point
As currently calculated, the CPI tends to overstate the true inflation rate because - ✔✔it fails
to correctly measure quality changes for some products
Suppose the CPI last year is 121 and the CPI this year is 137. The correct method to calculate
the inflation rate is - ✔✔[(137-121)/121] x 100 = 13.2
Substitution bias in the CPI refers to the fact that the CPI - ✔✔takes no account of the
substitution of goods by consumers when relative prices change
An example of "investment" in computing real GDP using the expenditure approach is the
purchase of - ✔✔a new set of tools by an auto mechanic, for use in repairing cars
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